The “end of denial” of unconstitutional HOAs

Ibram X. Kendi’s article, “The End of Denial,” appears in the September 2020 Atlantic Monthly. While Kendi argues that the upsurge in the denial of racism is a major step to ending racism in America, I can expand upon this mindset shift, this reorientation,  to ending the denial of the unconstitutionality of the HOA legal scheme and model of local government. This mindset shift will produce the broad, substantial reforms to the current prejudicial view favoring authoritarian,  private government HOAs.

Applying Kendi’s view to HOA constitutionality, Kendi urged “The American people [to] give policy makers an ultimatum: Use your power to radically reduce inequity and injustice, or be voted out”; and that “the American people [must] demand equitable results, not speeches that make them feel good about themselves and their country.”[1]

I have proposed a plan to accomplish this HOA mindset shift,

“Restructuring the HOA-Land Nation  requires a cultural change in in the way of life of members; and an appropriate change in attitude by  state legislatures, the people and the home buying public.”[2]

and describe the underlying HOA social and political culture,[3]

“This HOA-Land Nation Within America white paper challenges, confronts, and exposes the self-interest bias by pro-HOA stalwarts, and contains authoritative documentation and evidence as well as statements used in this indoctrination process.”

The question that I posed to the policymakers, the constitutional pundits, and Arizona Legislature as far back as 2006 remains long unanswered:

“Can private parties enter into contractual arrangements, using adhesion contracts and a constructive notice consent, that serve to regulate and control the people within a territory (an HOA), to circumvent the application of the Constitution?”

Following Kendi’s lead, it is well beyond time for the denial of unconstitutional HOAs to end. It remains in the hands of Americans to demand that the state and local governments, the policymakers, and the constitutional pundits restore full citizenship to Americans living in authoritarian, private governments functioning outside the Constitution.

References


[1] “Ibram X. Kendi on ‘The End of Denial’”, Press Room, The Atlantic Monthly, August 5, 2020.

[2] George K. Staropoli,  A Plan Toward Restoring the HOA Model of Governance, StarMan Publishing (2019). Amazon.com: https://www.amazon.com/dp/b089yvpcwp.

[3] George K. Staropoli, The HOA-Land Nation Within America, StarMan Publishing (2019). Amazon.com: https://www.amazon.com/dp/b07r6xc1yt.                               

HOAs deny opposition free speech

This morning on CNN Michael Smerconish discussed the question of free speech with respect to disagreeing with a position.  In this highly sensitive environment too often a disagreement with a position evokes an angry demand to remove or not publish the statement. That is not free speech but, as Smerconish said, “my-speech.”  It is not asking for agreement but free speech – let the other person have his say. Let a dialogue ensue which is a must for a healthy democracy.

In the culture of the HOA-Land Nation, any opposition to, or criticism of, the HOA or its board of directors is too often met with angry condemnation, character assassination, ostracization, and the non-publishing of the opposition voice. Some HOAs give the appearance of concern but  only provide token  Q & A dialogues with no real exchange of the issues. This open opposition to free speech is endemic to the HOA-Land culture and reflects an undemocratic, authoritarian cult-like environment.

Problems with HOAs, as we are all aware of, cannot be resolved when member criticism and opposition is squelched as a matter of policy.  Until the members say, “enough is enough” and demand constitutional reforms the problems will continue unresolved.

Resurrecting the argument for a homeowners bill of rights

This demand for a homeowners bill of rights by homeowner rights advocates had its play back in the 1997 – 2008 period, some 10 years ago. There was:

  • the AHRC’s 1997 bill,[1]
  • Lois and Samuel Pratt’s 1999 bill,[2]
  • my 2000 address to the AZ Legislature[3],
  • the 2006 AARP bill of rights,[4]
  • and my 2008 “Members Bill of Rights” amendment to CLRC.[5]

And there are undoubtedly others that I missed. Deborah Goonan recently re-posted a 2015 article[6] speaking of no Bill of Rights and constitutional violations of the 14th Amendment.  In 2017 the California Legislature adopted a limited bill of rights dealing with member political free speech.[7]

A new look at homeowner rights is needed, one that takes a down-to-earth approach and focuses on the common CC&Rs covenants and bylaws that read like,

  1. If there are conflicts between the provisions of Arizona law, the Articles, the Declaration, and these By-Laws, the provisions of Arizona law, the Articles, and the By-Laws (in that order) shall prevail.
  2. these By-Laws [Declaration] may be amended only by the affirmative vote or written consent, or any combination thereof of Members representing at least 51% [67%] of the . . . votes in the Association.
  3. no amendment may remove, revoke, or modify any right or privilege of Declarant . . . without the written consent of Declarant

Over the years I’ve discovered that the courts have universally upheld the broad amendment covenant as generically stated in (2) above.  The basis of their decisions is the very dangerous and overly broad interpretation that homeowners agreed to be bound[8] by the CC&Rs and bylaws.   Note that (3) above carves out an exception for the Declarant that requires his explicit consent, while accepting the majority rule principle in regard to the members. But, this “acceptance” to be bound by majority rule violates a fundamental right of citizens in regard a governmental “taking” or eminent domain action.

In many instances the courts have required 100% consent when the amendment adds new covenants, covenants not found in the CC&Rs, the most notable being changing from a voluntary HOA to a mandatory HOA.  This would be inconsistent with (1) above that holds that the law of the land prevails, and which of course, the buyer also agreed to. But, CAI comes to the rescue and prevails in the courts that the CC&Rs and bylaws contain valid waivers and surrenders of fundamental rights, even to the extent of accepting implicit (not stated but presumed consent) waivers and surrenders as valid.

Hold on! It is long held legal doctrine that the surrender and waiver of these rights must be explicit, one by one. And that, under contract law, there must be a meeting of the minds with full consent and no misrepresentation in the buying process. I have concluded that,

Public policy today rejects constitutional government for HOAs allowing them to operate outside the law of the land. The policy makers have failed to understand that the HOA CC&Rs have crossed over the line between purely property restrictions to establishing unregulated and authoritarian private governments.

The point I wish to make is that the absence of any meaningful bill of rights that genuinely protects the rights of HOA members is ab initio (from the beginning) a rejection of democratic norms and institutions.  The HOA cannot, therefore, be considered democratic by any means regardless of the propaganda by CAI and other pro-HOA supporters.

Community associations are not governments — many years of legislation and court rulings have established that fact beyond a reasonable doubt. Yet they are clearly democratic in their operations, electing their leadership from among the homeowners on a periodic basis.

. . . .

The solution to that problem is not to replace democracy with tyranny, royalty, or some other form of government, but to work to make the democratic process better and to hold those elected accountable.[9]

Simply unbelievable!  (In face of subsequent advocate criticisms, CAI began speaking of HOAs as a business, and we are seeing more and more statements that when a homebuyer signed his real estate contract, he was actually investing in a business.  Unbelievable!  Shades of George Orwell’s NewSpeak from his novel, 1984, where people are indoctrinated to hold 2 opposing views at the same time, and be at peace.)

What is intentionally absent — yes, intentionally otherwise the renowned CAI layers would have to claim incompetency regarding the law – is a Homeowners Bill of Rights.  Can you imagine that if the HOA framers, those stakeholders, of the HOA concept had actually met and discussed with knowledgeable and informed public that there would be protections for homeowners?  Can you imagine?

What the absent, yet informed public, would have added was a Preamble to an Amendment to the CC&R that would have been like that found in the Bill of Rights:

 Preamble to the US Bill of Rights

“THE Conventions of a number of States, having at the time of adopting the Constitution, expressed a desire, in order to prevent misconstruction or abuse of its powers, that further declaratory and restrictive clauses should be added: And as extending the ground of public confidence in the Government, will best insure the beneficent ends of its institution:”

The basis for the BOR was a distrust of government and the need to further protect the people.  Regarding the HOA documents, the 9th and 10th Amendments, as applied to the HOA legal scheme, would prevent the broad interpretations that have been and are continuing being held by the courts.  No more generalities, except in favor of the members.  If it was good for America over 230 years, it must be good for HOA-Land!

Amendment IX

The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.

Amendment X

The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.

The 9th Amendment simply says that if it ain’t specified – enumerated — in the governing documents, it belongs to the membership.  No more broad interpretations of waivers and surrenders of rights.  The 10th Amendment simply says that if the members did not explicitly agree to certain HOA powers (delegated to), it belongs to the membership.

This is the argument and approach needed to get a Homeowners Bill of Rights accepted by state legislatures.  It should be a national campaign by all advocate groups in all states for their next legislative session.  There is time to organize and prepare.

 

References

[1] See “Short History” in co-opting the HOA “homeowners bill of rights”, Elizabeth McMahon, 1997.

[2] See A BILL OF RIGHTS FOR HOMEOWNERS IN RESIDENTIAL COMMUNITY ASSOCIATIONS (1999).

[3] Statement to AZ Legislative Homeowners Association Study Committee, 2000.

[4] A Bill of Rights for Homeowners in Associations, AARP HOA Bill of Rights, David Kahne 2006.

[5] Supra, n. 1. “CLRC” is the California Law Review Commission.

[6] Let’s Get Some National Attention on HOA, Housing Issues, Deborah Goonan, 2015 original post.  

[7] A California true HOA Bill of Rights (SB 407).

[8] For a summary of the issues regarding the agreement to be bound position, seeConsent to be governed, No. 4, HOA Common Sense: rejecting private government.  The notes contain very important authorities on this issue.  (In only one case did a court reject this position because it felt that the amendment exceeded the reasonable expectations of the homeowner.  For example, having part of their assessments go toward a private entity unrelated to the HOA).

[9] CAI CEO Skiba in his April 2, 2008 Ungated blog entry.

Supreme Court says corporations cannot be used to evade Constitution

The recent non-HOA decision by the US Supreme Court in DOT v. Assn American Railroads[i] has a direct bearing on the constitutionality of the HOA legal scheme.   This case dealt with the legal status of AMTRAK — is it or is it not a government entity — and was there an unconstitutional delegation of legislative authority.  While I have argued that HOAs are de facto private governments based on their powers, authority and functions, I now make the argument that as a de jure (according to the law) private corporation, HOAs have been unconstitutionally delegated legislative powers. “[R]ecognizing that the power to fashion legally binding rules is legislative.”[ii]

Implicit delegations of legislative powers are described in The Restatement Servitudes[iii] and numerous state statutes carry implicit delegations of legislative powers.[iv]

With respect to violations of the Constitution, the Supreme Court decision in DOT  held 1) that private parties cannot draft agreements to circumvent the Constitution by declaring that an entity, specifically a corporation, is a private organization, 2) that such a determination is made by the courts based on the corporation’s functions, powers and authority, and 3) that in order for a private entity’s delegation of legislative authority to be constitutional, there must be control, supervision and accountability to the state.

I have presented my case that, in the absence of explicit enabling acts, there is implicit unconstitutional delegation of legislative power to private HOAs, particularly in regard to legally binding rules, without accountability.

Read the complete paper at Delegation.

[i] Dept. of Transportation v. Assn American Railroads, 135 S.Ct. 1225 (2015)

[ii] Supra 1, p. 17.

[iii] Restatement Third, Property (Servitudes), Susan F. French, Reporter, p. ix (American Law Institute 2000).

[iv] For a sample of implied rulemaking statutes by state, see:  Arizona: ARS 33-1803(A) and (B) for HOAs; 33-1242(A)(1) for condos. California: Civil Code §§ 4340-4370 (Part 5, Chapter 3, Article 5, Operating Rules). Florida HOAs:  Title XL, § 720 et seq. do not explicitly address rules per se, but speak to enforceable “guidelines” and “standards”; Florida Condos:  Title XL, § 718 et seq. (in particular, § 718.1035, the general statement on “association rules”). Nevada: “NRS 116.31065  Rules.  The rules adopted by an association” (with 5 “musts” imposed on the HOA).

HOA constitutionality will cause the collapse of CAI

Ever wonder why CAI so vehemently fights the view that HOAs are indeed mini-governments, or quasi-governments?  Its amicus curiae brief in Dublirer v. 200 Linwood Avenue[1]  is a meritless, desperate attempt to prevent the NJ Supreme Court from coming to the conclusion that as a government, the HOA election process must be constitutionally protected.  It failed. The Court upheld constitutional rights to a member’s free speech especially in regard to HOA campaigning.

CAI argued that HOAs are businesses and that business owners don’t have constitutional protections.  It practically begged the Court not to allow open public discussions of political issues, because the HOA would lose its privacy rights. Isolationist mentality!  It argued that constitutional protections are not needed because other mechanisms, like the business judgment rule, would handle disputes.  And, that election rights are not protected by the state constitution, but by the pro-HOA statutes and adhesion CC&R contracts.  To paraphrase a line from the movie, The Treasure of the Sierra Madre, We don’t need no stinkin’ constitutional protections!

Such statements made in court filings are astonishing!  It is a complete refutation and about face to CAI’s propaganda material made for public consumption.[2]  It repudiates our democratic system of government and the US Constitution!

What would cause CAI to argue such statements without merit before a state supreme court?  Maybe because CAI knows that if HOA constitutionality is accepted and HOAs are seen as state actors or made to become state entities, it would no longer control and dominate the industry.  All would be lost!

HOAs would not be lost as CAI has argued from time to time.  CAI would be lost!  It would have to rethink its public policies, its Best Practices, it training seminars, etc.  It would need to include such courses, which are not and never have been in the CAI vocabulary, understanding the Constitution and Bill of Rights, good local government, best city management practices, etc.

The path to substantive HOA reform legislation has always been on the basis fundamental principles, democratic principles of government, and the US Constitution.  The courts are beginning to see the error of their way.  And CAI cannot prevent the inevitable from happening — it’s just a matter of how soon!

References

1.    See CAI: the HOA form of government is independent of the US Constitution.

2.    See Misrepresentation: CAI comes with unclean hands and Will the real CAI standup: its contradictory beliefs, pronouncements and goals.