How authoritarianism operates in an HOA

The HOA legal structure and scheme is basically authoritarian in nature: strong central power, limited political freedoms, no accountability, and under the rule of man, not law. 

CCHAL[1] argues be careful of   “’rules’ put in place in the name of ‘health and safety.’  Yes, some – but not all – may be necessary, but the pandemic creates an environment for putting in place some repressive rules too.” And reading the Golden Rain proposed rules, yes, in my opinion also, they are repressive.

 1. Pay a $500 deposit to get the ball rolling;

2. Apply for a permit at least three days before a planned protest;

3. Pick a maximum one-hour time slot during the day for the demonstration;

4. Ensure all participants social distance and stay out of roadways;

5. Plan on paying for any damage and cleanup costs;

6. Host protests only in an area bounded by three roads.

Proposed only rule 4 can be argued as in the interest of members health, safety and welfare as the GR CEO stated to the East Bay Times “This comes back to safety.”[2]  Rule 5 comes across as intimidation as this topic is already contained within the governing documents, and assumes violence will occur. According to the article, indicating another overly broad sweep at restrictions, GR’s intent was directed at dealing with protestors, as occurred in May in regard to BLM, yet the rules apply to any gathering of members. Rules 3 and 6 appear to be arbitrary restraint on free speech.

Rule 1 is punitive and is in violation of California law enacted in 2017, SB 407,[3] as pointed out by CCHAL. In general, the GR board/trustees seem to have ignored the law and cannot say that they didn’t know the law.

According to East Bay, “Golden Rain CEO Tim O’Keefe told the committee that the Davis Sterling Act doesn’t apply here because the foundation is a private organization, not a ‘common interest’ area like a homeowner’s association.”  That’s an unbelievable and irresponsible falsehood by the GF CEO!  In the 2017 directly involving Golden Rain, the appellate court held,

The court found that GRF is an ‘association’ subject to the Davis-Stirling Common Interest Development Act (Civ. Code, § 1350 et seq.) (the Davis-Stirling Act). fn. 1 We agree, and affirm.”  (Golden Rain Foundation v. Carol Franz, 163 Cal.App.4th 1141 (2008). (Plaintiffs were Leisure World members).

HOA members should understand that the common defense of BODs is “upon advice of attorney,” and in this case we hear that “the proposed rules had been reviewed by the organization’s attorney.”[4]  Are you aware of attorney rules of professional conduct?  You would be surprised what they have been getting away with as I inform readers in my post.[5]

Two things stand out in my mind, from years of studying and analyzing BOD motivations and defenses, many times supported by the HOA attorney’s opinion: these HOA boards/trustees are rogue BODs functioning with complete disregard of the laws.  HOA members BEWARE of your BOD and the opinions of its attorney!

Relevant sections of SB 407 include:

4515.  (a) It is the intent of the Legislature to ensure that members and residents of common interest developments have the ability to exercise their rights under law to peacefully assemble and freely communicate with one another and with others with respect to common interest development living or for social, political, or educational purposes.

(c) A member or resident of a common interest development shall not be required to pay a fee, make a deposit, obtain liability insurance, or pay the premium or deductible on the association’s insurance policy, in order to use a common area . . . .

(d) A member or resident of a common interest development . . . may bring a civil or small claims court action to enjoin the enforcement of a governing document.  The court may assess a civil penalty of not more than five hundred dollars ($500) for each violation.

There is no legitimate justification for GF’s proposed rule changes except to assert its power and control over the members. In general, including GR, HOA boards are authoritarian and supported by too many members who are authoritarian followers.  In order to successfully deal with the unjust powers and authority of BODs,  the legislators, the public, and HOA members in particular  need to read and understand the social and political culture of HOAs. Visit my posts on authoritarianism in HOA-Land.[6]

References


[1] Marjorie Murray, email letter of July 26, 2020,  Center for California Homeowner Association Law (info@calhomelaw.org).

[2] Annie Sciacca, “Want to protest at Rossmoor? Schedule it during business hours,” East Bay Times, July 10, 2020.  

[3] Chapter 236, California Revised Code (2017), SB 407. http://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180SB407

[4] Id.

[5] See my post,  A lesson in professional conduct for HOA attorneys (2020).

[6] George K. Staropoli, HOAs undermine principles of democratic America (2020); Authoritarianism in the HOA-Land Nation (2020).

 

Rigged HOA elections create a false democracy

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]  There is no better example of HOA independence than prejudiced HOA election procedures.  In 2013 I wrote,

“HOA members have been repeatedly told that they can change things in their HOA by voting for board members and even by changing the governing documents; that HOAs are democratic because members can vote to make these changes happen. . . . Without fair elections procedures that contain enforcement against HOA board wrongful acts, including retaliatory acts and intimidation by the board, voting in an HOA is a mockery of democracy.[ii]

CAI, on the other hand, maintains in its Public Policy statement that,

“Community associations are one of the most representative and responsive forms of democracy in America today. Residents of a community freely elect neighbors to serve on the board of directors of the community.[iii]

Let me give a prime example of far these pro-HOA procedures can go to deny members a fair and just voting process, one that subtly favors the HOA Board.  In this large scale HOA in Arizona with over 9,000 homes and some $20 million in revenues, amendments to the CC&RS and bylaws are needed to be approved by 67% of the membership.

The governing documents have an unusual, non-standard voting procedure that allows for “consent” by the members, in addition to an actual vote, which constituts a vote and are counted in the approval requirement. Members just have to fill out a form and submit it.  Surprisingly, in contrast to the public voting procedures, this procedure contains

  • no mention of a “cutoff date,” the date that the Consent Form needed to be received by the election committee. A start date, date form first distributed, is mentioned and currently is 5 months ago.
  • no opportunity for a “no” vote, just the wording that not submitting the form would be seen as choosing “ not to consenting to the documents.”
  • A biased, pro-HOA “advertising” on the form itself without any mention of opposing views. “ Moving Forward to the Future.” Other advocacy by the Board is prominent.
  • An annual membership meeting scheduled some 6 months after the ability to submit a Consent Form, but the agenda was silent on actual voting for these amendments instead of submitting a Consent Form, or announcing the results of the “vote.”

This method of voting by the HOA would not pass muster in the public realm.  So much for democracy in action. This election process is rigged in favor of approval, is unjust and negates any choice by the members who may wish to submit a NO vote.  It’s a no-lose approach for the Board since the Form does not allow for NO votes!  It would never fly under the public realm’s fair elections requirements.

In Wittenburg v. Beachwalk HOA,[iv] the California appellate court held that a board is engaged in advocacy when it supported and  urged an approval vote in its materials and communications. The Court’s view was that opposing parties must be given equal opportunity to advocate against the proposition, which is being denied in the above instance, by not allowing a no vote and the open-ended voting process of form submissions with only YES votes.

The Court held that the relevant statute was in the public interest and it sought to

“provide substantial new voting protections” to members of homeowner associations designed to “guarantee that basic democratic principles are in place during elections,” which had previously been “contaminated by manipulation, oppression and intimidation of members, as well as outright fraud.”[v]

Yet, overwhelmingly, according to the CAI surveys, HOA members standby their HOA even though it operates outside of constitutional protections and the laws of the land.  They seem to believe that, like a King, their board can do  no wrong; that, contrary to James Madison’s view that “If angels were to gvern men, neither internal  nor external controls on government would be necessary,” their board must consist of angels.

The HOA legal scheme as set forth in the governing documents and pro-HOA state laws, does not contain a fundamental principle of our constitutional system of government:  checks and balances. The HOA board basically has, for all practical purposes, a free hand to function as an authoritarian government.

By: George K. Staropoli

 

References

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

[ii]Democratic Elections No. 5,” George K. Staropoli, HOA Common Sense: rejecting private government.

[iii] Section 8 in An Introduction to Community Association Living (2006).

[iv] Wittenburg v. Beachwalk HOA,  217 Cal.App.4th 654 (2013).

[v] Id.

NJ Supreme Court upholds constitution against HOA free speech electioneering violations

Those familiar with rogue HOAs have seen this occur time after time – board control of the electioneering process.   In, Dublirer, a NJ Supreme Court case, [1]

The [condo] Board, citing a ‘House Rule’ that barred soliciting and distributing any written materials, denied the request. On prior occasions, though, the Board had distributed written ‘updates’ under apartment doors throughout the building, which criticized the Board’s opponents. The resident filed a lawsuit and claimed that the House Rule was unconstitutional.”

Finally, a state supreme court said enough is enough and free speech in elections for members dominates the governing documents, and the state constitution prevails (This case was not filed under federal laws).

Under that approach, we find that the Board’s policy violates the free speech clause of the State Constitution. The important right of residents to speak about the governance of their community, which presents a minimal intrusion when a leaflet is placed under a neighbor’s apartment door, outweighs the Board’s concerns. We therefore affirm the judgment of the Appellate Division.

The panel [appellate decision] noted that Dublirer’s expressional activity was ‘political-like speech’ because it related to the management and governance of the common-interest community. The panel found that the restriction left Dublirer without reasonable alternative means to convey his message.”

Thus, even though Dublirer did not run for public office, his message was akin to and should be treated as political speech, which is entitled to the highest level of protection in our society. . . . If anything, speech about matters of public interest, and about the qualifications of people who hold positions of trust, lies at the heart of our societal values.

Essentially, members – and speaking with respect to member-owners — must be given equal access to the membership as long as the campaign does not excessively disrupt the “tranquility” of the community. Suitable means must be given to members to allow for free speech expressions. The HOA had argued, beyond technicalities that were dismissed, that members had no free speech rights.  Imagine that!  CAI’s description of HOAs as democracies was just contradicted!

The Court held,

“On balance, we find that the restriction on Dublirer’s right to disseminate his written materials to neighbors is unreasonable. Dublirer’s right to promote his candidacy, and to communicate his views about the governance of the community in which he lives, outweigh the minor interference that neighbors will face from a leaflet under their door. In short, Dublirer’s right to free speech outweighs the Board’s concerns about the use of the apartment building. We therefore find that the Board’s House Rule violates the free speech guarantee in New Jersey’s Constitution.”

It appears that this Court believes that HOAs are akin to public governments and the election of board members is tantamount to a local public election and must be constitutionally protected.  To ensure that local community government works for the member-owners, don’t due process protections and the equal protection of the laws under the 14th Amendment require judicial enforcement against HOA violations?  And that these rights deserve supremacy over privately drafted contracts that have as their objective the dismissal of constitutional protections?  I think so!  So should state legislators!

As for CAI’s amicus brief, it denied free speech rights to homeowners, declared HOAs are businesses and members are like stockholders during board elections, and other non-constitutional methods were available so forget about applying constitutional law.  Sounds like a belief that HOAs are indeed independent principalities (See Establishing the New America: a new book).

CAI cannot allow HOAs to be treated as equivalent to state entities.  See Commentary posted here.

Note 1.  “BRIEF OF PUTATIVE AMICUS CURIAE COMMUNITY ASSOCIATIONS INSTITUTE – NEW JERSEY CHAPTER,” Michael S. Karpoff, Jan. 3, 2013 (Dublirer v. 2000 Linwood Avenue Owners Assn, N.J. Docket 069154 (2014)).