Arizona’s landmark fair elections, free speech law on HOA governance

On Sept. 25, 2022, Arizona’s new HOA reform law (Session Law Ch, 125; HB2158),  bringing substantive free public speech on HOA governing issues and establishing a fair elections procedure, will become effective.

This is a major step forward to the application of Constitutional equal protection of the laws and proper due process as guaranteed to all US citizens. Under this bill, effective and meaningful opportunity for Arizona members to participate fairly and in an equal manner in the governance of an HOA.

It starts with the ability to campaign and discuss governing issues with the members on the same level playing field. All the members seeking change have to do is to get involved knowing they won’t be “fighting city hall” without legislative support. The “tools” are there for members to stand up and fight for their rights. No one else will do it for you! Especially your board of directors.

As James Madison wrote in The Federalist Papers #51: “If angels were to govern men, neither external nor internal controls on government would be necessary.” HOA boards for the most part have demonstrated that they are indeed not angels.

I congratulate the bill sponsor, Rep. John Kavanagh, and all advocates who supported this bill and the Arizona Legislators coming to understand the need to stop board of director’s abuse under authoritarian private agreements.

The intent and purpose of this law are highlighted below :

“‘association-specific political sign’ means a sign that supports or opposes a candidate for the board of directors or the recall of a board member or a condominium ballot measure that requires a vote of the association unit owners.

The details specify the rights of members and prohibitions on the BOD regarding these signs. Furthermore,

“association may not prohibit or unreasonably restrict a unit owner’s ability to peacefully assemble and use common elements of the condominium [or HOA];

“group of unit owners may assemble to discuss matters related to the condominium [or HOA], including board of director elections or recalls, potential or actual ballot issues or revisions to the condominium documents, property maintenance or safety issues or any other condominium matters . . . .”

Relevant sections of HB 2158

The relevant sections of the new law can be read here: HB 2158;  Ariz. Sess. Law Ch 125 (2022). An audio version on Spotify can be heard here: https://spotifyanchor-web.app.link/e/mqz2Fe4Dytb

Democracy Is Not Guaranteed in HOA-Land

For the past 58 years, the HOA model of local community government has been “an extremism that threatens the very foundations of our republic.” This model of government rejects democratic principles and constitutional protections, depriving members of their fundamental rights.[1]

HOAs have been permitted to operate and function as such by the support, cooperation, and promotion of state legislatures. HOAs are based on intentional misrepresentations of authoritarian private contracts to unsuspecting buyers. Even today the self-proclaimed leading educator on the  HOA model and operation will not address questions of constitutionality that have authoritative legal support.

In my earlier commentaries I wrote about the similarities between the social and political  culture on the national level and that of the HOA declaration of covenants, conditions, and restrictions (CC&Rs). I wrote that CC&Rs rejected democratic principles in the pursuit of enforcement in order to coerce compliance.[2]

President Biden, in his Thursday speech to the nation, reminds Americans that,[3]

“Democracy Is Not Guaranteed. “We have to defend it. Protect it. Stand up for it. Each and every one of us. . . . regardless of your ideology.”

“We just need to remember who we are. “There’s nothing more important, nothing more sacred, nothing more American”  than preserving democracy. “That’s who we truly are. And that’s who we must always be.

There is an old truism: “there cannot be change without change.” If we are to preserve democratic institutions in HOA-Land, then the members must unite across the country and organize  to preserve democracy; there’s nothing more American. Members of HOAs are citizens of America, and that’s who we truly are and that’s who we must always be.

Learn more about unconstitutional CC&Rs and the rights and freedoms as Americans unknowingly taken from you when you entered HOA-Land. Take time to read the articles provided under Notes below.

Notes:


[1] See The intent of the HOA “bible”, the Homes Association Handbook (March 2020).

 [2] See in general, George K. Staropoli, StarMan Publishing (making references to Donald Trump).

[3] Read the Full Transcript of Biden’s Speech in Philadelphia – The New York Times (nytimes.com)

Homeowners do not have HOA ‘eminent domain’ protection

You all know about public domain eminent domain protection: the government cannot take your property for public use – public benefit — without fair market compensation, which you can negotiate and take to court if necessary. Acquiring your property is a “taking.” 

According to the courts,  it is not well known that the government’s denial of a natural use of your property is considered an informal taking, and compensation must be paid. I am surprised to learn that almost any personal property owned by the homeowner can be subject to a taking by the government. (Investopedia).

As an HOA member you do not have an equivalent HOA government taking protection whereby you are compensated for any takings or modifications demanded by the HOA. While HOA government takings per se are rare except for foreclosure rights, the HOA does demand that the homeowner replace or remove approved  landscaping trees or shrubbery, additions like sheds, playsets,  repaint the exterior, etc. At the homeowner’s expense!

I’ve found many times that corrective action is delayed until after completion of the approved homeowner improvements, and the HOA demands that it be torn down by the homeowner. Grossly unjust and unfair: it’s the incompetence of the HOA failing to act within a reasonable time while construction begins.

However, it’s understandable and acceptable if the governing documents specify, for example, that exteriors just be repainted every 15 years, or roofs inspected for necessary repairs every 20 years or so, etc.

The argument used by the HOA generally falls into keeping with the image  of the properties and maintain property values, for the benefit of the members, the HOA ‘public.’  As it stands, the owner/ member has no right to demand compensation and is another instance of constitutional protections lost in HOA-Land.

State supreme court cases favor member rights and freedoms over HOA

I would like to thank Deborah Goonan on her post[1] covering two especially important state supreme court HOA cases, and her excellent reporting and analysis of the issues. My review and comments follow.

WDIS, LLC v. Hi-Country Estates Homeowners Ass’n, Phase II, 2022 UT 17 (Utah 2022)

Raised in this landmark case, but not directly addressed, is the constitutional validity of the CC&Rs that contain implicit waivers and surrenders of fundamental rights and freedoms that are available to and protect all Americans under the Constitution. At issue, as stated by the Utah SC in WDIS,

“More relevant to this case, future owners of parcels or homes within the jurisdiction of any HOA are not required to formally sign onto the restrictive covenants when they are first created. Instead, consumers (be they buyers, heirs, or lenders) are merely entitled to a take-it-or-leave-it option to accept ownership of the property, subject to whatever covenants and restrictions are on file in County records. By taking possession of the property, an owner is presumed to have accepted the restrictions as valid and enforceable.”

The “Landowners” raised the especially prominent issue of freedom of contract, raising the charge of CC&Rs as an unconstitutional contract. The Utah Supreme Court concluded:

“The protective covenants at issue were not contractual” because “they did not involve two parties agreeing to perform acts in relation to each other. We conclude that applying the presumption is appropriate.”

“The freedom to contract is implicated because the question we are resolving is whether parties “of full age and competent understanding” are free either to accept or reject those covenants later on. And there are other reasons, beyond the freedom of contract, to apply the presumption.”  

* * * *

Belmont Ass’n v. Farwig,  No. 214A21, 2022 NCSC 64 (N.C. 2022)

First, with respect to outwardly friendly HOA member legislation let me point out what we see here,  the bill/law usually contains an offsetting exception or exclusion that renders the homeowner benefits questionable or negates them under practical application. Obviously, anybody seeing solar panels on roofs know that they will be seen by the public. How can a court ignore that?

Also, watch out for Rules that cannot be supported by the CC&Rs and are invalid as the SC pointed out regarding an ARC rule. HOAs cannot add restrictions or conditions not specified or prohibited by the CC&Rs without a CC&Rs amendment.

Second, as I’ve repeatedly stated, state legislatures favor the HOA over member rights and constitutional protections. Thank God there are some courts who do seek justice like the NC  Supreme Court in this case that saw, in plain English, the subterfuge of “friendly” HOA member law.

Read the full post here:

  1.  HOA Lawsuits: Property owner challenges to HOA boards (Part 2) – Independent American Communities, Deborah Goonan, Aug. 5, 2022.

CA bill AB 1410 –  a step backwards for HOA homeowner rights

In 2018, California Civil Code §4515 was a major step in restoring fundamental protections for free speech by members with respect to HOA governing issues.

“(a) It is the intent of the Legislature to ensure that members and residents of common interest developments have the ability to exercise their rights under law to peacefully assemble and freely communicate with one another and with others with respect to common interest development living or for social, political, or educational purposes.”

AND JUSTICE FOR ALL

Now, AB 1410 seeks to restrict these rights under the guise, it seems, that the HOA website is private and therefore it can adopt restrictive rules legally. In a typical “what you see is not what you get” maneuver, the bill would grant the HOA the power to moderate message content in strict opposition to legal holdings — that content based free speech is protected and any editing must be unbiased.

The bill sections start with §4515,

“(b)  The governing documents, including bylaws and operating line 4 rules, shall not prohibit a member or resident of a common interest line 5 development from doing any of the following:”

But watch out, what is granted is now removed under (b)(6) subparagraphs (B) and (C), and especially (D). In a “flip-flop,” designed in my view to confuse the average homeowner, it then informs the homeowner that he is still protected because the HOA must follow the rules it is attempting to circumvent. (pp. 93-94).

What’s the point? To make  it difficult for homeowners to understand the legislation and their rights all well knowing that those in power will only cite the pro-HOA points and omit the pro-homeowner protections.

GOTCHA AGAIN! Don’t fall for it!

This attempt by Rep. Rodriquez feels like an anti-slapp move if it were in the courts — an action to stifle free speech. Marjorie Murray presents 2 instances of where an anti-slapp motion can and should be used against the HOA. Contact Murray (info@calhomelaw.org) for more information.

Center for California HOA Law opposes the bill and urges Californians to contact their representatives and Judiciary Chair by phone. The committee will hear this bill this week.