HOA-Land Nation “Did you know?” Part 2

HOA-Land Nation “Did you know?”

Release No. 2 —  July 4, 2019

As an HOA member, did you know that:

 ·         Your HOA board (BOD) is unaccountable under state laws with trivial, if any, penalties or punishments for violations of state laws or the governing documents?  Without meaningful enforcement to hold BODs accountable and to serve as a detriment to continued violations, you are forced to sue just to get compliance.

 ·         The much touted HOAs are democratic because members can vote is utterly without merit?  Fair elections protections, as compared with those in the public arena, do not exist under a corporation law.  Members do not have equal access to HOA newsletters, website, member lists, and use of common amenity meetings rooms, among other denials.  

 ·         To bring about equal protection of your rights, the HOA attorney sides with the BOD, his client and not you, the membership.  And as a CAI member, lobbies the legislature to maintain conditions as they are – authoritarian HOA government.

 ·         You still retain your rights, privileges and immunities as a citizen but are denied these rights under the private HOA legal scheme, functioning outside constitutional protections.

 Discover the truth about HOAs!  The truth shall set you free!  Read The HOA-Land Nation Within America exposé on sale at Amazon.com. 


CA SB323 a model on fair elections for all states

California’s SB 323 seeks to introduce fair elections procedures for HOAs, addressing one of my 6 substantive defects in the HOA legal scheme.[i]  Deborah Goonan’s excellent discussion of this bill[ii] brought to my attention a second defect in the HOA legal scheme, the lack of enforcement of the law[iii].

The bill modifies California’s Civil Code, Section 5145(a), inter alia, mandating a court to void any election found to violate the law. The court no longer has discretion, as many have been found to favor the HOA over the member, and insures that justice be served. “A member of an association may bring a civil action for declaratory or equitable relief for a violation of this article by the association.”

Section (b) is modified to read, “A member who prevails in a civil action to enforce the member’s rights . . . the court may impose a civil penalty of up to five hundred dollars ($500) for each violation.”

In all fairness, the bill requires the violation to be intentional and material to the outcome to avoid frivolous suits.  With CAI “experts” in HOA law involved in many of these cases, it’s hard to view the violation as accidental.  There is an instance in Arizona at this time where this bill is sorely needed.[iv]

Without fair elections, all this pro-HOA clamor by CAI and other staunch HOA backers that HOAs are the epitome of democracy where members can vote, and should get elected and involved in the affairs of their HOA becomes meaningless tripe!

California’s SB 323 must be made law not only in California, but in all the states as well!

References

[i] See HOA Common Sense: rejecting private governmentDemocratic elections, No. 5.

[ii] See “California HOA elections bill update (March 2019)”, Independent American Communities.

[iii] Supra, n. i, HOA Boards can do no wrong, No. 7.

[iv] For example, see “Non-conforming HOA voting procedure”,  HOA Constitutional Government.

California’s SB 323 seeks to introduce fair elections procedures for HOAs, addressing one of my 6 substantive defects in the HOA legal scheme.[i]  Deborah Goonan’s excellent discussion of this bill[ii] brought to my attention a second defect in the HOA legal scheme, the lack of enforcement of the law[iii].

The bill modifies California’s Civil Code, Section 5145(a), inter alia, mandating a court to void any election found to violate the law. The court no longer has discretion, as many have been found to favor the HOA over the member, and insures that justice be served. “A member of an association may bring a civil action for declaratory or equitable relief for a violation of this article by the association.”

Section (b) is modified to read, “A member who prevails in a civil action to enforce the member’s rights . . . the court may impose a civil penalty of up to five hundred dollars ($500) for each violation.”

In all fairness, the bill requires the violation to be intentional and material to the outcome to avoid frivolous suits.  With CAI “experts” in HOA law involved in many of these cases, it’s hard to view the violation as accidental.  There is an instance in Arizona at this time where this bill is sorely needed.[iv]

Without fair elections, all this pro-HOA clamor by CAI and other staunch HOA backers that HOAs are the epitome of democracy where members can vote, and should get elected and involved in the affairs of their HOA becomes meaningless tripe!

California’s SB 323 must be made law not only in California, but in all the states as well!

References

[i] See HOA Common Sense: rejecting private government, Democratic elections, No. 5.

[ii] See “California HOA elections bill update (March 2019)”, Independent American Communities.

[iii] Supra, n. i, HOA Boards can do no wrong, No. 7.

[iv] For example, see “Non-conforming HOA voting procedure,  HOA Constitutional Government.

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.

See Model AZ regulatory agency bill and AZ Model regulatory HOA agency fact sheet.

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.

On stopping HOA bullies and rediscovering lost values

Excerpts of guest blogs by George Staropoli on Ward Lucas’ blog, Neighbors at War!

 

Rediscovering Values

For a society, a community, to function in an orderly manner there must be not only rules, but a firm belief in the need to enforce just and fair rules and laws. Political philosophy says that where laws are unjust and unfair, then the democratic government is not legitimate, cause the reason for forming a social contract and surrendering freedoms is just that.

On Stopping Bullies

Proposed HOA reforms must include necessary and sufficient detriments to put an end to HOA bullying and abuse. People do not become angels when they become a board member, like our astute, politically savvy legislatures would like you to believe.

 If angels were to govern men, neither external nor internal controls on government would be necessary.  James Madison, The Federalist Papers, # 51.