Goldwater Institute: separate and unequal constitutions for HOAs

In reply to my Arizona Capitol Times Commentary of December 12th, Constitutional Center Director Nick Dranias believes HOAs are bona fide consensual relationships and regulating homeowners associations would “stand the Constitution on its head.”  (See Goldwater Institute: regulating HOAs “stands Constitution on its head”).

In the late 1950s the Southern states enacted a Poll Tax and instituted certain “tests” in order for citizens to be eligible to register to vote.  No federal or state laws were violated, since the states were permitted to determine the methods for registering citizens, so long as it was not based on race (15th Amendment).  Of course, the tax was set at a level very few Blacks could afford to pay, and among the test questions were such gems as (LBJ: Master of the Senate, Robert A. Caro, p. x, 2002).
Name all of Alabama’s 67 county judges.
What was the date that Oklahoma was admitted to the Union?
How many bubbles in  bar of soap?
While legal, these state laws were intended to keep Blacks from voting, and were plainly an unjust and unfair vehicle to support the will of the local power groups.  Today, we can ask about the intentions and use of privately developed HOA restrictive covenants, and the arguments by the legal-academic aristocrats promoting the supremacy of servitude laws over constitutional law:
Can private, contractual governments be used to  circumvent Constitutional protections?  If so, then what becomes of the Constitution?  Can the people opt-out of the Union?  President Lincoln didn’t think so, and Americans paid dearly to make that point.
The Goldwater Institute’s continued dialog on HOAs and the Constitution reflects the view of HOAs as independent principalities existing outside the Constitution, and thus establishing a new order for Americans, a New America of HOA-lands.

California’s Davis-Stirling Act creates CIDs as state actors

Dear California Legislators,

While civ: 1352 of the Davis-Stirling Act (please note that this Act has been placed under the Civil Code and not the Business and Profession Code) declares how a CID is created, “This title applies and a common interest development is created whenever a separate interest coupled with an interest in the common area or membership in the association ….”, 1363(a) mandates a homeowners association, to be known as a community association and not a CID association, “A common interest development shall be managed by an association that may be incorporated or unincorporated. The association may be referred to as a community association.” Yet this imposition of a private government lacks any homeowner protection as with a Homeowner Bill of Rights, nor does this provision require approval by a state agency or legislature, as would be required if the CID were attempting to form an incorporated community within the state structure.

The operative word is “shall” and constitutes a delegation of legislative powers to the community association. Under common interpretations of the US Constitution, this makes the association a state actor and subject to the 14th Amendment prohibitions as any other government body.(1) This state of affairs subjects these CIDs to meeting the recognized standards of proper due process equal application of the laws protections under the 14th Amendment.

While paragraph 1363(g) seems to provide proper notification of “crimes against the CID” by requiring that a schedule of violations be adopted and provided to each homeowner, much like in the public sector where criminal law requires that a crime must be contained in some statute, “[T]he board of directors shall adopt and distribute to each member, by personal delivery or first-class mail, a schedule of the monetary penalties that may be assessed for those violations . . . .”

However, paragraph 1363(h) only requires,

When the board of directors is to meet to consider or impose discipline upon a member, the board shall notify the member in writing, by either personal delivery or first-class mail, at least 10 days prior to the meeting. The notification shall contain, at a minimum, the date, time, and place of the meeting, the nature of the alleged violation for which a member may be disciplined, and a statement that the member has a right to attend and may address the board at the meeting.

This provision does not meet the accepted standards of due process that demands an impartial hearing where the accused may confront the accusers and present and examine witnesses. The homeowners are being short changed.

Under Article 4 of SB551 we have a very good move toward providing for this independent tribunal as a very good attempt to meet established requirements for due process. It’s unfortunate that the bill does not provide a mechanism to insure that the proposed bureau will indeed be there to serve justice for all. A “a pay as you go” procedure, as adopted in Arizona and as we have in the public sector, is a more appropriate approach to attaining this justice.

1. See generally, Brentwood Academy v. Tennessee Athletic School ,531 US 288 (2001) (tests for state action); Steven Siegel, The Constitution & Private Govt, W & M Bill Rts J 461 (Summer 1998).

HOA statutes create state actors and actions

[The message of this letter to the Arizona Legislators is valid in regard to the legislation and statutes of many other states. The corporate form of HOA governance needs and relies on its unjust power to deny homeowners their constitutional rights in order to coerce obedience. The special interests, especially CAI, prefer that these valid arguments not be exposed to the public, legislators or the media. This is just what we must do if we are to obtain fair and equitable treatment under the laws].

April 30, 2005

Dear Arizona Senators:

Please do not pass this Homeowner Association bill, HB2154. It will further entangle Homeowner Associations as state actors.

The amendments to ARS 33-1260 & 33-1806 read, in part,

(h) A statement that provides “I hereby acknowledge that the declaration, bylaws and rules of the association constitute a contract between the association and me (the purchaser).

I believe this would be challenged in court as violating other statutes on contract law that require a meeting of the minds and a signature by the homeowner. There is no explicit waiver of constitutional rights. The above wording is suitable for a government agency or some municipal government entity, but not for a private contractual arrangements.

For example, creating or modifying HOA Rules do not require the homeowner’s signature, or even a vote of the members. Adding this paragraph further strengthens the close nexus between the state and the HOA, and further solidifies the status of the HOA as a state actor(1).

The Arizona Constitution, Article II, Section 2, reads (my emphasis):

“All political power is inherent in the people, and governments derive their just powers from the consent of the governed, and are established to protect and maintain individual rights.

The provisions of HB2154, and ARS 33-1256 and 1260; 33-1803, 1806 and 1807; 42-13402 (common area valuation), collectively support the validity of arguments that HOAs are state actors and, thus, subject to the 14th Amendment protections of due process and the equal protections of the laws. Realizing that these statutes will soon be challenged, passing this bill should be carefully reexamined.

A short presentation of supporting constitutional arguments can be found below under Note 2.


George K. Staropoli
Citizens For Constitutional Local Government

1. This appears that this is the only bill out of 22 HOA bills that will be sent to the Governor, Other aspects that interfere with the homeowners rights inlcude: removal of disclosure of loss of homestead exemption (don’t tell the buyer); adds reasonable collection fees to HOA liens (actually, more fees to attorneys since attorney fees are already included); revises board removal procedures; replaces proxy voting with secret ballots without any protections relating to the counting and verification process, and any meeting “new business” leaves homeowner out on the cold.

2. Constitutional arguments, supported by case law, from Nowak & Rotunda, Constitutional Law §§ 12.3, 12.4, (6th Ed., West Group 2000) (my emphasis).

· Cases in which alleged wrongful activity . . . have a connection to state legislation present the widest scope of factual situations.
· When state legislation commands a certain activity, or officially recognizes its legitimacy, there is no question but that state action present whenever someone follows the guidelines of the statute [as demonstrated by the above mentioned statutes].
· Again the reason . . . is that the alleged wrongdoing appears to be connected to activities of the state in such a way that it can be said to be a denial of rights by the state itself.
· When judges command private persons to take specific actions which would violate the Constitution if done by the State, state action will be present in the resulting harm to constitutionally recognized rights [property and liberty rights].