HOA representative government and consent of the governed

George Washington wrote in his Farewell Address (1796), the Constitution “is the offspring of our choice, uninfluenced and unawed, adopted upon full investigation and mature deliberation, completely free in its principles . . . .”  The Declaration of Independence asserted “that to secure these [inalienable] rights Governments are instituted among men, deriving their just powers from the consent of the governed.”

These two quotes contain the fundamental principles of representative democracy adopted by means of a social contract, the Constitution, which are freedom of choice, ”just powers,” and “consent of the governed.” By virtue of these fundamental principles of democracy, HOAs cannot be considered as democratic governments. Period!

In his article explaining the meaning of the Constitution,[1] Edwin Meese III explains that “consent is the means whereby arbitrary power is thwarted. The natural standard for judging if a government is legitimate [and hence just] is whether that government rests on the consent of the governed.” 

In order for HOA governments to be just, legitimate and compatible with the Constitution these fundamental principles must be honored and supported. HOA “constitutions,” those CC&Rs, are not compatible with the US Constitution.

Meese further addresses the differences between “consent of the governed” and “will of the majority” that is a pro-HOA mantra. “The ‘consent of the governed’ describes a situation where the people are self-governing in their communities . . . into which the government may intrude only with the people’s consent.”

He explains that the “Will of the majority” is a political mechanism for decisions to be made by the government. In other words, the BOD makes decisions on behalf of the members based on its view of the majority will or some survey of the members. In short, in a representative democracy, like that attempted by the HOA legal structure, not all of the members are in agreement with or consent to the decisions of the BOD. It raises the issue of ‘the tyranny of the majority’ when the minority is not given due respect nor the ability to freely and equally speak out on HOA governmental issues.

Meese contends that the Founding Fathers[2] understood this weak point in a democratic government and the need to “insure domestic tranquility.”[3]

[A] government [must rest] not only on the consent of the governed, but also on a structure of government wherein the views of the people and their civic associations can be expressed and translated into public law and public policy. . . . Through deliberation, debate, and compromise, a public consensus is formed about what constitutes the public good. It is this consensus on fundamental principles that knits individuals into a community of citizens.

The structure of HOA governance is not based on and contradicts fundamental American principles and traditional values.  Furthermore, the CC&R are not even based on contract law 101 with its requirements for freely entered into, full disclosure, and explicit agreement to be bound,  but on the real estate doctrine of equitable servitudes.

To learn more about your loss of these rights and freedoms see The HOA-Land Nation Within America.

 

References

[1] Edwin Meese III, “What the Constitution Means,” The Heritage Guide to the Constitution (2005). Meese was the US Attorney General under Ronald Reagan.

[2] See in general, The Federalist Papers, #51, James Madison who explained, “Justice is the end [goal] of government. It is the end of civil society.”

[3] Preamble to the Constitution.

Why aren’t HOAs held as state actors based on USSC criteria?


Allow me to congratulate Deborah Goonan on her fine article, “USSC rules in favor of property rights — how will this affect HOAs?”[1], on constitutionality as applied to HOA-Land.  I also congratulate her for venturing in into the long standing, highly controversial and muddied waters of state actor legal doctrine.

State actor doctrine is too deep and complex to be fully addressed in a blog. I have followed this is for over 15 years having read most of the cases cited by the USSC.  Consequently, I will state some views that I feel will help her subscribers/readers to better understand a broader picture of this doctrine.

First,  the 2 fairly recent USSC cases, Knick and Manhattan, mentioned in Deborah Goonan’s post well illustrate the loss of homeowner constitutional and fundamental rights resulting from the fact that HOAs are not subject to the Constitution as are all other governmental entities; and that state legislatures have refused to make it so.

Second, the rationale for the public policy lack of vigorous pursuit of state actor doctrine in the case of the well documented and pervasive conduct of HOA boards is a slippery-slope fear factor.  This fear is stated by the USSC in Manhattan as:

Consistent with the text of the Constitution, the state-action doctrine enforces a critical boundary between the government and the individual, and thereby protects a robust sphere of individual liberty. Expanding the state-action doctrine beyond its traditional boundaries would expand governmental control while restricting individual liberty and private enterprise. We decline to do so in this case.

And so, interfering and applying state action to HOAs appears to be avoided to protect your individual freedoms.  I’m somewhat confused. Are you?  Adopting this state policy with respect to HOAs is highly misguided!

Third, although Goonan quotes the USSC use of 3 requirements for state action, the Court did reference the 2001 Brentwood v. Tennessee Secondary School[2] opinion that contained a summary of the criteria the USSC set for determining state action.  Omitting the obvious “exercising exclusive government functions” that requires no further discussion I listed these state actor criteria:

    1. From the State’s exercise of “coercive power,”
    2. when the State provides “significant encouragement, either overt or covert,”
    3. when a private actor operates as a “willful participant in joint activity with the State or its agents
    4. when it is controlled by an “agency of the State,”
    5. when it has been delegated a public function by the State
    6. when it is “entwined with governmental policies,” or
    7. when government is “entwined in [its] management or control.”

In regard to the institutionalization of HOAs, or as I refer to it, HOA-Land, the above tests 1 – 3, and 5 -6 would provide clear and convincing evidence that the policies of state legislatures, as demonstrated by the enacted pro-HOA laws, have created HOAs as state actors who willingly undertake state actions

Fourth, As you can see, there is plenty of “ammunition” to argue that HOAs are state actors.  By the simple use of the word “may” in the statutes raises the highly controversial question of: Are HOAs state actors? “May” is commonly found as “the board may set the time of the annual meeting,” or “may charge . . . .”  The overlooked impact and consequence of this word is to legalize activities and actions that were all-to-fore not legal rights granted to the HOA.  They are now made a legal activity, if your BOD so chooses.[3]

That’s easily “supportive”, “cooperating,” “encouraging,” and “entwined” in both public policy – more taxes from high value properties – and in the “management and control” of the HOA as we see how state laws mimic the governing documents, thereby legalizing them.

Fifth, HOAs have been described as sui generis – one of a kind.[4]  Sui generis presents a view of HOAs as private government principalities supported by your state legislature and is used to justify special laws for a special organization, the HOA. Existing constitutional law is inadequate to support this model of local governance and so, in violation of US and state constitutions,  we see all those HOA/PUD/condo “Acts” in almost every state.  These Acts constitute a parallel supreme law of the land with sharp contrasts to the US Constitution.

 

Finally, state actor doctrine can be a very powerful tool in the hands of HOA reformers, but the public policy of a feared slippery-slope defense must be overcome. It can be overcome IF advocates make a strong case that this public policy as applied to HOA-Land is misguided; and the failure of the courts to apply state actor doctrine harms the people living in HOAs.

In the name of justice, a serious look into this doctrine with regard to HOAs must be undertaken by independent think tank political scientists under the auspices of a Congressional mandate. Like setting up and independent counsel to conduct the investigation into HOA-Land.

 

References

[1] “USSC rules in favor of property rights — how will this affect HOAs?”, Deborah Goonan,  IAC, July 15, 2019. Contains links to the 2 USSC cases.

[2] Brentwood Academy v. Tennessee Secondary School Athletic Ass’n, 531 U.S. 288 (2001). I have made frequent reference to Brentwood in my Commentaries in HOA Constitutional Government.

[3]Are HOA state actors created by statutory use of shall/may?,” George K. Staropoli, HOA Constitutional Government (April 2019).

[4] A non-inclusive list: Tyler P. Berding, “The failure of the HOA to protect against obsolescence”; Steven Seigel, attorney who analyzed Twin Rivers NJ decision, Wm & Mary Bill of Rights Jnl 1998.

HOA-Land Nation publication to aid constitutionality

The important question of HOA constitutionality has generally been avoided and given token lip serve by all interested parties: homeowners, homeowner rights advocates, state legislators, real estate departments, attorney generals, nonprofit private entities proclaiming a defense of the Constitution, and the media at large.

Even the renowned Wayne Hyatt’s[1] statement in 1976 went ignored.

“One clearly sees the association as a quasi-government entity paralleling in almost every case the powers, duties, and responsibilities of a municipal government.   All of these functions are financed through assessments or taxes levied upon the members of the community, with powers vested in the board of directors, council of co-owners, board of managers, or other similar body clearly analogous to the governing body of a municipality.”[2]

Clearly challenging the constitutionality of the HOA model of local government and legal scheme is well beyond past due. To correct this horrific and inexcusable oversight I have published, The HOA-Land Nation Within America,[3] a white paper, an exposé of the HOA legal scheme violations of the Constitution. The eBook and paperback editions can be found on Amazon.

This task of constitutional HOA reforms may appear overwhelming and almost impossible to achieve, but constitutional HOA reforms can happen. It will take tremendous effort and perseverance, and a “never give up” mentality. David Cole passionately makes this point[4]

“If Americans now and in the coming years insist that . . . our most fundamental values, including equality, human dignity, fair process, privacy, and the rule of law, and if we organize and advocate in defense of those principles,” we will succeed in bringing about the necessary fundamental and constitutional reforms to the HOA legal scheme in existence since the HOA “bible” was released in 1964. In order to accomplish this important task, “it will take a persistent civil society, a vigilant media, brave insiders, and judges and other government officials who take seriously their responsibility to uphold the Constitution. But first and foremost, it will take an engaged citizenry.”

The defense of liberty depends . . . on citizens engaging collectively to fight for the values they believe in. . . . The preservation of liberty through a written constitution . . . has survived . . . because ‘we the people’ have consistently taken up the charge to define, defend, and develop liberty in our own image, so that it reflects our deepest commitment , not just those of a privileged elite who do not represent us.”

It falls upon the homeowners in HOAs, as has always, to advance constitutional arguments that are valid and credible.    And that takes knowledge and understanding of the issues.  The HOA-Land Nation, and other of my publications and Commentaries, as well as those of others, provide the “ammunition” that will pass the valid and credible challenges to be expected from CAI and other lawyers, provided the arguments do not get bogged down in irrelevant arguments from the opposition.

CAI cannot handle a broad Bill of Rights challenge. Period!  I have never been challenged  by CAI because they well know that they are defending the defenseless.

Read the book, paperback or eBook, and spread the word.  Use it in those many HOA violations where state statutes support the HOA.  Work to hold seminars and conferences to openly discuss the issues raised in The HOA-Land Nation.  Expose their defense of HOAs, now!

 Notes

[1] Wayne Hyatt was a prominent figure in the promotion of HOA-Land as well as an important person in creating CAI in 1973, serving as its second president.

[2] I have extensively quoted Wayne Hyatt’s 1976 statement on HOAs as mini-governments, as cited in the 1983 California case, Cohen v. Kite Hill.

[3] I have concluded that there exists an HOA-Land Nation within America that is comprised of fragmented and local HOA governments across the country and have designated them collectively as “HOA-Land.”  The commonality of their declarations of CC&Rs, flowing from the 1964 Homes Association Handbook (ULI publication), their shared beliefs, values, traditions, and institutions qualify HOA-Land as a nation.

[4] David Cole, National Legal Director of the ACLU, Engines of Liberty, Basic Books (2016).

AZ SB 1088 is an unconstitutional and selective impairment of a contract bill

Arizona’s SB 1088 bill seeks to invalidate CC&Rs that require approval by a homeowner to allow any visitor access to the homeowner.  It specifically deals with — and is only meaningful with respect to gated communities which are gated for a very good reason — not hindering process servers access to a homeowner defendant.  It is punitive with a $250 “civil penalty” for anyone violating this law.

Background 

Under our laws and judicial system a plaintiff must service notice of a lawsuit upon a defendant as required by the Constitution.[1]  It is well known that there are people who act to avoid being served notice, which stops any lawsuit from moving forward. However, the law does allow for posting the summons notice to the public notices page of a newspaper in the event the defendant cannot be personally contacted.[2]

Impairing the obligation of contracts

The proponents’ argument would be generally along the lines that “due process under the law” triumphs over any contract infringement violation as a matter of public policy and for the general good of the people. An HOA covenant cannot hinder constitutional due process of law and the equal application of the law to a person, not necessarily an HOA, who is suing a defendant in such an HOA.  It’s not fair they would cry, referring to the greater good served outside the HOA.

But, the bill seems to be unnecessary as there are other means to satisfy civil procedure process servers.  It would also not pass judicial scrutiny[3] required to deny constitutional rights under contract infringement.  The bill seems to be sponsored as a request from a constituent facing some problem that lacks merit, considering the alternative methods available for service notice by process servers.

Selective enforcement of the law

It is long held doctrine that a government cannot pick and choose what laws to enforce or to ignore, and still be seen as a legitimate government.  The entirety of the covenants in a declaration of CC&Rs — allegedly constituting the voice of the people in a private contract to not be bound by the Constitution and the laws of the land — contains many, many covenants that violate the protected rights of the people.

Yet the state stands idly by and does nothing to end these private contractual violations of the constitution’s requirement for the equal protection of the law.  The CC&Rs are a mockery of due process protections, of fair elections, of eminent domain protections, of cruel and unusual punishment by foreclosure rights, of contract law misrepresentation and full disclosure violations, of the failure to provide civil penalties against HOA violations of the law, etc.

They are either ignored or have the “blessings” of the legislature as a result of laws that coerce compliance with the HOA, cooperate with the HOA, or closely interact with the day-to-day operations of the HOA. Any of which would make the HOA a state actor subject to the Constitution.

SB 1088 is a selective impairment of contract obligations while other infringements of the laws are allowed to stand. Adopting this bill would be a mockery of the law.

 

References

[1] 14th Amendment, “Nor shall any state deprive any person of life, liberty, or property, without due process of law.”

[2] Ariz. R. Civ. P., 4.1(n). “Where the person being served . . . has avoided service of process . . . then service may be by publication  . . . . “ Also, Rule 4.1(m) allows for “alternative or substituted service.”

[3] Judicial scrutiny relating to constitutional rights requires a compelling and necessary government interest, not a general government interest, to deny protected rights.  See, in general, Arizona’s HB 2382 is an unconstitutional violation of eminent domain law.

SB 1008, Virginia’s ‘HOA Bill of Rights’: an illusion of justice

The Virginia Legislation passed SB 1008 that modified the Code of Virginia adding a “Statement of Lot/Unit Owner Rights,” sections 55-79.72:3 and 55-509.3:1.  It sounds like a Bill of Rights, but the 5 items merely repeat existing law without meaningful and effective enforcement.

Consider that Virginia has a constitutional Bill of Rights, Article 1, that contains section 14,

Government should be uniform. That the people have a right to uniform government; and, therefore, that no government separate from, or independent of, the government of Virginia, ought to be erected or established within the limits thereof. 

It seems that HOA private governments violate Virginia’s Constitution.

Furthermore, take the first 2 clauses of Section 11, “That no person shall be deprived of his life, liberty, or property without due process of law; that the General Assembly shall not pass any law impairing the obligation of contracts.”  Compare the “fine print” of SB 1008 that adds, “the right of due process in the conduct of that hearing(my emphasis), referring to the section on enforcement of rules, (Sec. 55-513 or 55-79.80:2).  The enforcement section specifies the hearing in accordance with the [governing] documents, the member shall be given an opportunity to be heard and to be represented by counsel before the board of directors or other tribunal specified in the documents.”  Does that mean that the counsel is restricted to seeing that the homeowner is allowed to be heard, or is there more?

I have not come across a governing document that calls for hearings that allow presentation of documents and witnesses and the questioning of this evidence, or that the tribunal be an independent body. My point is, What does due process meaning in the context of SB 1008?  Is it under the constitutional bill of rights meaning, or constrained by the CC&Rs and bylaws private contracts?  Sounds like same ol’, same ol’.

Legislation without effective enforcement through monetary penalties is merely a recommendation that relies on the good faith of the parties, namely the board and its attorney and manager advisors.  But, we know all about the good faith acts of many of these responsible parties, especially those of rogue boards that ignore the laws and governing documents or knowingly violate them with impunity.

It would have been so much simpler to have these details spelled out in this one page bill if, indeed, justice for homeowners was sought.