HOA ethics: the end justifies the means

Depending on what side of the fence you’re sitting on in a controversial issue, you may be arguing that the end justifies the means, Yes or NO. It is a moral and ethical decision and raises the question as to when and how.  In a culture where its values have been deteriorating over the years to, what’s in it for me, greed is good, and I want it now, a valid and acceptable “means” has consequently also deteriorated.

In general, this end-means assertion is introduced as a defensive justification for some course of action being challenged by others. It usually involves a discretionary decision by some authority entity, like a town council, board of directors, management, etc.  Not surprisingly, we find this defensive reaction in many HOA-Land situations; I discuss one such incident based on real events.

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Mgmt case study #1 – update3


Management Case Study #1 update3 — BOD good faith conduct

George K. StaropoliJanuary 16, 2022

This study will proceed to a climax late this month with the board elections.  The BOD has remained silent with respect to the allegations and the members have also remained silent. However, the BOD has handled their problem with a campaign of propaganda.

I challenged the BOD and the members in a post to the SCG FB private member group, stating in part:

PROPAGANDA. I have studied the recent weekly posts, releases, enotifications, “news of the day” etc. from the BOD. My  conclusion was that I was witnessing a very slick and effective propaganda campaign.  (“Propaganda” is false statements, half-truths, omission of facts, and misrepresentations designed to produce a favorable attitude and mindset in the targets). What has been presented to the membership has been happy, smiling faces, eating good food at the Café, enjoying the club and sports amenities, and beautiful pictures of the landscaping. A picture of happy land and playing to the wishes, desires, and wants of the members.

All designed to elicit “what a great place this” and “what a great job the BOD is doing.”  I agree!  Meanwhile they have failed and continue to fail to address documented criticisms and charges of violations.  Completely ignoring these serious aspects of BOD duties and obligations under state law and the governing documents.  Will the new BOD follow in suit?  “For they are all, all honorable men.”

* * * *

Please feel free to provide posts on this open SCG member FB group: any  feedback, your views, any questions about me, who I am, what I stand for, or what I wish to accomplish. 


Management Case Study #1 – update1

Events at the HOA featured in this study continue to unfold. The board has been silent since the Dec. 16 email from the president. A question was addressed to the Executive Administrator of CAM asking whether or not she was in charge. The general manager (GM) had quit and there was no announcement whatsoever as to the status of CAM. She was listed on the staff of CAM, without any statement regarding the status of the GM.

In 2 days of this writing, Dec. 30, the SCG will hold a planned Q & A session where members can ask the BOD questions, sort of a townhall meeting. Would you advise the BOD to hold the meeting? If so, how should it deal with hard questions concerning its past performance?

January 2022 will see the campaign and election of board directors, and the right of members to write-in names of members not approved or subject to the SCG election and voting process. The BOD controls and approves the selection of “candidates” and regulates their campaign procedures — can they speak at clubs, what can be said, failure to attend a meeting disqualifies a potential candidate, etc.

A majority of the directors will be elected at this time, as a result of resignations, permitting an organized membership to gain control of the board. As in the case of our national politics, should the old BOD deny the results — as it seems to be the posture it is taking — or accept the reality of the vote?

AZ Senate protects HOA misconduct rejecting HB 2052

The Arizona Senate is still sitting on HB 2052 since a month ago, March 1st,  a bill providing for member participation in HOA governance.  The bill  explicitly states, since the CC&Rs is seen as a contract, what the HOA cannot do and must allow for fair elections and meaningful  participation in HOA governance.

In the past I’ve addressed this constitutional question of fair elections in the HOA model of an authoritarian,  business form of governance.  I’ve provided examples of incidents and court cases reflecting this denial of fair elections, which exist in the public domain, as if the HOA is afraid of the democratic voice of its members.

In this writing I will call to your attention how an upscale, over 1,000 member HOA board — as a representative example of such HOAs — refuses to accept the facts laid before it that provide valid cause to conduct a due diligence examination; and to validate its positions in regard to its fiduciary obligations of good faith conduct and obedience to the governing documents.

Below I’ve copied parts of its application package provided to all candidates for  a director’s position. The package material clearly shows the BOD’s awareness of its fiduciary obligations and its required treatment with respect to the membership.

Obligations  and liabilities of directors

“Directors have a fiduciary duty to the Association and to each member.

“The duty of loyalty requires that:   Directors act in good faith  pursuant to a free, honest exercise of judgment not influenced by considerations other than the best interest of the Association.

“Failure to discharge the fiduciary duty can subject the Association to liability and subject the Director to personal liability. A Director can also be liable for illegal or tortuous acts of the Board of the Association if he/she participates in the decision to authorize the acts or knowingly fails to take steps to avoid the action. “[Emphasis added].

HOA control of the candidate process and campaigning

Getting down to the specific application of HB 2052, the relevant HOA’s candidacy procedures follow, with the opening line stating: “The Campaign and Election Policies have been carefully developed to provide a fair and clean process for candidates and all members.

While the specific policies are not clearly stated as whether prohibited or permitted, the overall tone is definitely of a prohibitive nature. The 14 points are shown as Exhibit 1 below. In sum, they include not using email listings; association facilities or agencies, clubs, etc. websites; no right to hold Q & A sessions independent of HOA;  no right to campaign through social media —  Facebook, Instagram, etc.; all advertising must be HOA approved; distributing flyers outside restaurants, presumably those within the HOA, or on common areas.

The policies of this HOA, and many other large-scale HOA are similar but not so detailed, demonstrate the failure of the board directors to act in good faith and as a fiduciary for the members.  For the HOA to argue that “The ends justify the means and we determine what’s good for the members, but the HOA entity comes first” is unsatisfactory and irrelevant. These policies reflect an authoritarian government that accepts the rejection of fundamental member democratic rights and privileges because they can hide behind the questionable legality of the CC&Rs.

There can be no excuse for HOA directors not being aware of the voluminous materials available for conducting their due diligence with respect to democratic, fair elections and member participation in HOA governance. They have been given plenty of notice, which subjects them to personal liabilities and prevents them from hiding behind “my attorney said it was OK,” or from acts of omission – doing nothing. 

This representative HOA’s policy so informs them of their liability. Yet, nothing is done to correct these violations of good faith. And still the directors, officers, and managers all demand respect! It’s shameless!

What is going on, you may ask?  Well, the board is setting policy for the acceptance of candidates without a vote of the membership. In other words, unless the proposed candidates are accepted by the BOD, the members have lost a candidate of their choosing. They have lost a meaningful participation in the governing of the HOA; they cannot disagree with the establishment!  So, if you thought your HOA was democratic, forget about it! 

Also, the BOD controls how candidates acceptable to them can campaign, placing severe restrictions not found in the fair public elections procedures.  See Exhibit 1 below. Again, members have lost their right to fair and free elections in HOA matters.

AZ Senate’s rejection of HB 2052

It is easily seen that  the AZ Senate supports these undemocratic polices as represented by this HOA’s practices. 

I have maintained 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.”

See, CC&Rs are a devise for de facto HOA governments to escape Constitutional government; Reorienting the HOA board – fair elections; HOA Common Sense, No. 6: Fair and just hearings

And furthermore, “CIDS [HOAs] currently engage in many activities that would be prohibited  if they were viewed  by the courts as the equivalent of local federal amd Arizona governments.”  … Privatopia (1994), Evan McKenzie.

It is not too late for the Senators to meet their obligations to uphold the federal and Arizona Constitutions by passing HB 2052 into law.

Exhibit 1. HOA BOD campaign policies.

  1. Using email listings, electronic or websites of Neighborhood Representatives and Alternates, Charter Clubs, Interest Groups, community and specialty groups.
  2. Addressing a formal . . . Group (e.g., Neighborhood Representative, Charter Club, Interest Group, specialty group meetings, sports venues, etc.). However, a person’s right to free speech in casual conversations shall not be restrained.
  3. Participating in formal Q&A sessions and programs other than those sponsored by the . . . Election Team.
  4. Using Association facilities for campaign events for individual candidates.
  5. Removing other candidates’ campaign flyers from approved locations.
  6. Using the official . . . website, Facebook or Instagram social media accounts to promote your campaign or to use your personal social media accounts to defame or incite defamation of candidates, engaging in unkind innuendoes / slander / harassment at any time or in any setting.
  7. Posting campaign flyers on street signs, trees, light poles, motor vehicles, golf cars, lawns, windows, auto windshields, or in commercial buildings.
  8. Defacing approved campaign flyers.
  9. Using balloons, buttons, t-shirts, marked-up election ballot, etc. as campaign tools.
  10. Using advertising of any type (other than approved campaign statement and/or approved personal correspondence).
  11. Using multiple versions of campaign flyers at the same time.
  12. Placing flyers in mailboxes (against the law).
  13. Distributing campaign flyers outside the entrance of or in the restaurants.
  14. Distributing campaign flyers in common areas except as noted.

Traitors and turncoats: HOA directors as CAI members

In every state HOA directors have a fiduciary duty to the HOA, to act in good faith, and as a prudent person would (as he would spend his own money).  Why then, are HOA directors also CAI members?  CAI is a vendor, a business trade organization formed to support the business interests of its members, mainly attorneys and managers.  To say that the vendors and the consumers share the same goals is to question the speaker’s mental state.

It’s understandable for consumers to seek assistance from vendors, as happens in many different industries, but to join and support a vendor organization?  The usual procedure is for the vendors to become associate or affiliate members of the consumer organization, which in our case would be an HOA organization.  (Those HOA associations of associations, like ECHO in California and SCOHA in Arizona, are just fronts for a CAI controlled entity.)

How and why did this occur?  It began at the very start with the  initial 1974 composition of CAI that had HOAs as a member category, although not quite explicitly stated.  Each of the 5 categories was to be equally represented in governing CAI: 1) builders and developers, 2) homeowner leaders of associations, 3) association managers, 4) public officials, and 5) other vendors.[i]  At that time, CAI was a 501(c)3 educational organization and not a trade group.  But this changed in the period of 1989 – 1993.

At the 1989 CAI retreat, controversy emerged on just who CAI represented given the fact that HOAs were consumers, not vendors. According to the CAI “historian”  Donald R. Stabile, “One participant commented that the CAI . . .  builder and developer group viewed CAI as a consumer organization teaching consumers how to sue the builders” to which another responded, “CAI is a professional organization and not a consumer group; that it was never intended to be a consumer group”. [ii]

Stabile continues discussing this important turnabout period in CAI history when it felt the need to become a business trade group, yet still retain the homeowners as members. In regard to homebuyers and residents, “To be sure, getting them interested in CAs [HOAS] was an important element in enhancing the popularity of this new form of housing” [read, mass marketing of HOAs]; and, “The advice they [the buyers] received from CAI was consistent with what [CAI developers and managers] needed consumers to be hearing”.[iii] 

As to the thoughts of the 1973 Founders of CAI at this juncture, Stabile adds that they “deemed it important for attaining legitimacy for the  CAI as a voice for the entire industry[iv] and to relate “positive aspects to the public especially regarding public policy issues”.[v]  (They have since dropped that line).  Concern centered that a “more consumer-oriented organization” would supplant CAI, and that “other citizens’ associations, which were consumer motivated, might become the national representative.[vi]

It seems that the roots of a great con started in that 1993 period that altered the purpose and mission of CAI, when lobbying for their members predominated under the guise of promoting vibrant and harmonious communities.   In 2005, some 13 years later, CAI finally dropped the façade of representing HOAs – HOAs were no longer members. All through this period CAI, and many of its attorney members, had addressed legislatures saying that they represented homeowners and HOAs.  And still today this claim appears quite frequently in CAI public statements.

What we have today is the faithful follower Team Players and the dogmatic True Believers (see The HOA Privatization Scale) simply denying reality like the Emperor in the fairytale, The Emperor’s New Clothes.[vii]  When a little boy cried, “He has no clothes,”  the Emperor realized that he had been duped. Yet, he continued to believe in his delusion since he could not admit having being wronged by con men.

For whom does the HOA director – CAI member serve?  Isn’t this an outright conflict of interest?   Does he serve as a “patriot” for the HOA, under legal requirements and dictates?  Or, for  the CAI business trade group as a “turncoat” to his HOA?   HOA members must reject board memberships in CAI that are paid for by member assessments.  These directors/officers are traitors, turncoats, and fifth columnists, all believing that they are doing good for the HOA.


Further reading:

For a detailed, non-CAI history of HOAs and CAI, see The Foundations of Homeowners Associations and the New America.



[i] Community Associations: The Emergence and Acceptance of a Quiet Innovation in Housing, Donald R. Stabile, (Greenwood Press 2000)  p. 117.

[ii] Id, p. 129. (CAI became a 501(c)6 business trade group in 1992).

[iii] Id, p. 133.

[iv] Id.

[v] Id, p.131.

[vi] Id., p. 129.

[vii]  The Emperor’s New Clothes, Mindfully.org (http://www.mindfully.org/Reform/Emperors-New-Clothes.htm), June 7, 2012.