Regulatory agency enforcement of HOA violations

There has always been a secondary mechanism for enforcing civil law violations that homeowners have been told very little about. In fact, the national ‘educational’ business trade organization has fought against this method from time immoral.

The enforcement of civil law can be found in such state (and federal) regulatory agencies as real estate, banking, medical, registers of contractors, bars, hair salons, etc. Except for HOAs.  Why not?

While state legislatures have intentionally avoided explicit delegation of authority to HOAs, their abdication of their constitutional responsibilities by a do nothing, hands-off attitude is an implicit delegation of authority. This failure to protect HOA members has caused much harm and injury to   individual homeowners, and has caused much divisiveness and disharmony within HOA communities. The various state HOA acts are devoid of any effective supervision, control, or oversight and should be declared unconstitutional.  A regulatory HOA agency solves both the constitutional and civil enforcement defects.

Read the complete paper at HOA regulatory enforcement.

Published in: on June 16, 2015 at 7:52 am  Comments (3)  
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HOAGOV EDUCATION SERIES: understanding the real lives of HOA members

My purpose for the Education Series, taken from a collection of my Commentaries (WordPress blog), is to present the other side of the HOA legal concept that has been intentional kept hidden from the public, the media, and the legislators.  Homeowners associations (HOAs) — generic for POAs, CIDs, planned communities, and condominiums — have become an institution and are unquestionably accepted as “that’s the way it is.”

Over the years, the general public has heard only the benefits of HOA regimes, but has heard nothing the about the means to achieve these benefits. The rationale, I suppose, is that the end justifies the means. This quiet acceptance of the HOA private government regime came to be as a result of aggressive lobbying by the HOA special interests, also known as HOA stakeholders (homeowners not included). The media, that was granted 1st Amendment freedom of speech rights in order to ensure a properly informed electorate, failed its obligations by remaining silent.  Nothing bad, seriously bad, about HOAs is publicized by the media. As you can read in my post on George Orwell’s 1984, the Ministry of Truth (a 1984 agency) parallels Goebbels’ Ministry of Public Enlightenment and Propaganda:

The Ministry of Truth uses control over the education system and the communications media to keep the masses in a state of ignorance and incapable of perceiving the facts of their manipulation. By controlling all sources of information, and playing one ignorant group off against the other, they ensure that effective opposition does not arise. While the masses attempt to make sense of the false reality fed to them in the schools and on the telescreens, the elite manipulators that write the scripts laugh at their confusion.  (Freedom is Slavery, The Modern History Project, April 24, 2015).

The Commentaries listed below present a broad picture of the current conditions, culture and environment relating to living in an HOA controlled home.  Violations of the Constitution’s equal protection of the laws and inadequate due process protections, pro-HOA state laws, legislative support for HOAs, the national business lobbying organization misleading the public that it is an unbiased educational organization, and the HOA attorneys and managers are all presented and discussed in these posts.

For readers who are interested in the history of how HOAs came to be can read my 121 page analysis, with references and legal authorities: The Foundations of Homeowners Associations and the New America.

Become informed.   Please read on.

 READING MATERIALS (click on links to access posts)

 A.    Constitutional issues

  1. HOA Common Sense: rejecting private government (complete series as PDF)
  2. CC&Rs are a devise for de facto HOA governments to escape constitutional government
  3. HOAs violate local home rule doctrine and are outlaw governments
  4. The unconstitutional delegation of implied rulemaking powers to HOAs
  5. Unconstitutional delegation of power to HOAs
  6. HOA reforms needed to guarantee U.S. Constitutional protections
  7. model HOA regulatory agency bill

  B.   HOA oppression

  1. Why do people harm others in HOAs?
  2. George Orwell’s 1984 is alive and well in HOA-Land

  C.   Community Associations Institute (CAI)

  1. Misrepresentation:  CAI comes with unclean hands
  2. Will the real CAI standup: its contradictory beliefs, pronouncements and goals
  3. CAI: the HOA form of government is independent of the US Constitution
  4. HOA constitutionality will cause the collapse of CAI

SB 1008, Virginia’s ‘HOA Bill of Rights': an illusion of justice

The Virginia Legislation passed SB 1008 that modified the Code of Virginia adding a “Statement of Lot/Unit Owner Rights,” sections 55-79.72:3 and 55-509.3:1.  It sounds like a Bill of Rights, but the 5 items merely repeat existing law without meaningful and effective enforcement.

Consider that Virginia has a constitutional Bill of Rights, Article 1, that contains section 14,

Government should be uniform. That the people have a right to uniform government; and, therefore, that no government separate from, or independent of, the government of Virginia, ought to be erected or established within the limits thereof. 

It seems that HOA private governments violate Virginia’s Constitution.

Furthermore, take the first 2 clauses of Section 11, “That no person shall be deprived of his life, liberty, or property without due process of law; that the General Assembly shall not pass any law impairing the obligation of contracts.”  Compare the “fine print” of SB 1008 that adds, “the right of due process in the conduct of that hearing(my emphasis), referring to the section on enforcement of rules, (Sec. 55-513 or 55-79.80:2).  The enforcement section specifies the hearing in accordance with the [governing] documents, the member shall be given an opportunity to be heard and to be represented by counsel before the board of directors or other tribunal specified in the documents.”  Does that mean that the counsel is restricted to seeing that the homeowner is allowed to be heard, or is there more?

I have not come across a governing document that calls for hearings that allow presentation of documents and witnesses and the questioning of this evidence, or that the tribunal be an independent body. My point is, What does due process meaning in the context of SB 1008?  Is it under the constitutional bill of rights meaning, or constrained by the CC&Rs and bylaws private contracts?  Sounds like same ol’, same ol’.

Legislation without effective enforcement through monetary penalties is merely a recommendation that relies on the good faith of the parties, namely the board and its attorney and manager advisors.  But, we know all about the good faith acts of many of these responsible parties, especially those of rogue boards that ignore the laws and governing documents or knowingly violate them with impunity.

It would have been so much simpler to have these details spelled out in this one page bill if, indeed, justice for homeowners was sought.

Published in: on February 22, 2015 at 9:40 am  Leave a Comment  
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CC&Rs are a devise for de facto HOA governments to escape constitutional government

This commentary takes a long look at the validity of HOA covenants and the need for judicial enforcement in order to invoke state action with respect to fundamental rights and freedoms.   It informs the reader that such enforcement depends upon the member’s voluntary agreement to be bound by the declaration, and raises issues of the lack of genuine agreement.  The agreement requirement is not analyzed under contract law, but under HOA law that has been designed to protect the HOA and position the declaration as the supreme law of the HOA community.

Long ago in 1994 Professor McKenzie wrote, “HOAs currently engage in many activities that would be prohibited if they were viewed by the courts as the equivalent of local governments.[i]

Two years after Marsh v. Alabama[ii] — the 1946 Supreme Court opinion setting the misguided “public functions” test for a municipality — the Court specifically dealt with the question of the constitutionality of restrictive covenants.  The issue in Shelly v. Kraemer[iii] was “that judicial enforcement of the restrictive agreements in these cases has violated rights guaranteed to petitioners by the Fourteenth Amendment.”

With respect to restrictive covenant enforcement the Shelly court said:  “That the action of state courts and of judicial officers in their official capacities is to be regarded as action of the State [‘state action’] within the meaning of the Fourteenth Amendment, is a proposition which has long been established by decisions of this Court. . . . The federal guaranty of due process extends to state action through its judicial as well as through its legislative, executive, or administrative branch of government.”   The Court held “that in granting judicial enforcement of the restrictive agreements in these cases, the States have denied petitioners the equal protection of the laws and that, therefore, the action of the state courts cannot stand” (my emphasis).

Unfortunately, the Court chose a narrow view of this issue limiting it to that involving racial discrimination.  A more expansive application of the 14th Amendment can easily be applied to any covenant that violates a member’s rights, freedoms or privileges and immunities as a citizen, but that has not been the case.

The 1976 Florida case, Brock v. Watergate Mobile Home,[iv] directly addressed the question of an HOA declaration and its actions under the Declaration.  It used the Marsh “public functions” test and the additional “close nexus” test (HOA action is closely resembles government action). No state action was found.  The HOA was not like a company town and the state’s involvement, as occurred in the limited context of the case, was not a close nexus.

Please understand that CC&RS and covenants are not automatically invalid or unconstitutional.  It requires a court to declare them so, at the expense of a homeowner lawsuit.  

Also, it is important to note that the court question was not about the validity of a restrictive covenant itself, but the court enforcement of that covenant. (This requires a lawsuit in which the court upholds the covenant and a subsequent lawsuit charging a violation of the 14th Amendment.)  The Shelly court’s view was that as the 14th Amendment applied “only to governmental action, as contrasted to action of private individuals, there was no showing that the covenants, which were simply agreements between private property owners, were invalid.”   Furthermore, “[The 14th] Amendment erects no shield against merely private conduct, however discriminatory or wrongful” (my emphasis).  In Arizona, today, the appellate court is to decide whether a CAI attorney amendment to Terravita’s CC&Rs that directly contradicts state law will be held valid.[v]  Behold the power of private contracts!

In view of the above we can ask, what makes a valid agreement?  Fortunately, a condition was attached to this view, which is never ever mentioned by pro-HOA supporters including those renowned CAI attorneys: “So long as the purposes of those agreements are effectuated by voluntary adherence to their terms. Sadly the courts have unquestionably accepted the validity of the CC&Rs as a voluntary agreement and this consent to be bound has become legal doctrine. For example, in Midlake v. Cappuccio the PA appellate court upheld a valid consent to agree by the buyer at time of purchase: “The Cappuccios contractually agreed to abide by the provisions in the Declaration at the time of purchase, thereby relinquishing their freedom of speech concerns regarding placing signs on this property.”[vi]   There have been numerous other cases where the court has upheld a valid consent to agree per se and a waiver/surrender of constitutional rights under said holding.

But, is there a genuine consent to agree?  I have written several commentaries about the lack of a genuine consent to agree as a result of misrepresentation, fraud, half-truths and hidden factors not fully disclosed to homebuyers.[vii]  Certainly not according to contract law 101 with its requirements for full disclosure, a meeting of the minds, and absence of fraud.

Unfortunately, once again, HOA declarations and covenants are seen as a law unto themselves that is based on a cutting and pasting of various laws, including constitutionality law, to provide for the protection and survival of HOAs.  We have pro-HOA statutes in every state and a Restatement of Servitudes[viii] (covenants) that was written to promote and protect HOAs. “Therefore this Restatement is enabling toward private government, so long as there is full disclosure[ix] (my emphasis).

The Restatement advises judges — and is regarded as precedent — that its collection of laws known as HOA law dominates all others.   Section 6.13, comment a, states: “The question whether a servitude unreasonably burdens a fundamental constitutional right is determined as a matter of property law, and not constitutional law”. Section 3.1, comment h, states: “in the event of a conflict between servitudes law and the law applicable to the association form, servitudes law should control.”

And we have CAI, the national HOA lobbying organization, repeatedly making it clear that the HOA is a city-state, an independent principality, and the decisions of the HOA are the supreme law of the community.[x]  It is easily concluded why CAI has vehemently denied and opposed any reference or declaration that HOAs are de facto governments — mini or quasi-governments — and argue that HOAs remain free from constitutional restrictions on government entities.

HOAs have been institutionalized under this state of affairs, this public policy, and unquestionably accepted as this is the way it is.  Nothing will improve the conditions to which HOA residents are subject unless HOA public policy changes. Public policy today rejects constitutional government for HOAs and allows HOAs to operate outside the law of the land.

The policy makers fail to understand that the terms and conditions of the HOA CC&Rs cross over the line between purely property restrictions to establishing unregulated and authoritarian private governments.

 

References

[i] Evan McKenzie, Privatopia: Homeowners Associations and the Rise of Residential Private Governments, Yale Univ. Press, 1994.

[ii] Marsh v. Alabama, 326 U.S. 501 (1946). The holding was that a company town was no different from a municipal town.

[iii] Shelly v. Kraemer, 334 U.S. 1 (1948).

[iv] Brock v. Watergate Mobile Home, 502 So. 2d 1380 (Fla. 4th Dist. App. 1987). This case was a civil rights violations case based on 42 US 1983 as a result of various acts by the HOA.

[v] Brown v. Terravita, 1 CA-CV 14-455. See Will Arizona allow HOA covenants to dominate state laws? and  Does the Constitution support the will of the HOA no matter what?

[vi] Midlake  v. Cappuccio, 673 A.2d 340 (Pa.Super. 1996) (PA appellate court). .

[vii] See “Consent to be governed, No. 4,HOA Common Sense: rejecting private governmentProposed “consent to be governed” statute, the “Truth in HOAs” bill; and court examines consent and surrender of rights in HOA CC&Rs.

[viii] Restatement Third, Property: Servitudes (American Law Institute 2000).

[ix] Id., From the Forward: “Professor Susan French [Reporter (chief editor/contributor) for this Restatement] begins with the assumption . . . that we are willing to pay for private government because we believe it is more efficient than [public] government  . . . . Therefore this Restatement is enabling toward private government, so long as there is full disclosure . . . .”

[x] See CAI: the HOA form of government is independent of the US Constitution;  Misrepresentation: CAI comes with unclean hands and Will the real CAI standup: its contradictory beliefs, pronouncements and goals.

Will Arizona allow HOA covenants to dominate state laws?

Jan. 3, 2015 Dear Arizona Senate President Andy Biggs,

You have always been a firm supporter of OAH adjudication of HOA disputes, and I find myself asking, once again, for your support to maintain the integrity of the Office of Administrative Hearings.  The opposition of CAI (“The Community Associations Institute (CAI) is OPPOSED to [the 2014] Senate Bill 1334 (HOAs; hearings; attorney fees).)” to this bill is appalling and unconscionable since the bill attempted to prevent HOAs from taking a giant step toward the status of an independent principality not subject to state laws. (See Establishing the New America of Independent HOA Principalities, 2008)

In its effort to silence Bill Brown, an outspoken critic of his Teravitta HOA government’s policies and actions, CAI attorney firm Ekmark & Ekmark redrafted the CC&Rs in disregard to state law and judicial holdings, as I believe he so informed you.  As occurred with the 2006 OAH enabling act, which was repeatedly attacked by the CAI member firm of Carpenter, Hazelwood, CAI has taken the position that a private contract can override state laws. I am not talking about a surrender or waiver of rights and privileges, but state law!  This is a slippery slope to a more firm status of HOAs independent principalities indeed, without any government oversight.

Such an audacious slap at Arizona’s constitutional system of government cannot be allowed to stand! It is an act violating the constitution as the supreme law of the land. Today, the courts have allowed HOAs to modify municipal ordinances without any state oversight and approval. It is long held doctrine that HOA covenants that are unconstitutional or violate public policy, or that are unreasonable or arbitrary and capricious are invalid and notwithstanding (See Sec. 3.1, Restatement of Property: Servitudes). Now, this doctrine has been intentionally and deliberately challenged and ignored by attorneys of the business trade entity, CAI. This brazen act, placing Arizona on a dangerous slippery slope, is in defiance of the Arizona Constitution and state laws and cannot be allowed to stand.

 The bill can be resubmitted as is with a small change to the last paragraph.

 “41-2198.01.

“J. NOTWITHSTANDING ANY PROVISION IN THE CONDOMINIUM DOCUMENTS AS  DEFINED IN SECTION 33-1202 OR THE PLANNED COMMUNITY DOCUMENTS AS DEFINED IN SECTION 33-1802, THE ADMINISTRATIVE HEARING OFFICER AND THE DEPARTMENT MAY NOT MAKE AN AWARD OF ATTORNEY FEES TO THE ASSOCIATION  ANY PARTY IN ANY MATTER FILED7 PURSUANT TO SUBSECTION B OF THIS SECTION.”

(Link to SB 1334 (2014): http://www.azleg.gov/legtext/51leg/2r/bills/sb1334s.pdf.)

FYI, I provide the following links to materials and supporting documents of CAI’s hypocrisy, saying one thing to the policy makers and another to the public.  Please read them, for they reveal CAI’s policy that HOAs should be treated as independent principalities while seeking legislative support for this secession from the State of Arizona.

  1. CAI: the HOA form of government is independent of the US Constitution
  2. Will the real CAI standup: its contradictory beliefs, pronouncements and goals
  3. Misrepresentation: CAI comes with unclean hands

Please sponsor this modified SB 1334 in the name of justice and the Constitution of the State of Arizona. I thank you for your earlier support of HOA reform bills. Respectfully, George K. Staropoli

Published in: on January 4, 2015 at 11:14 am  Comments (3)  
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