The Lament of the CAI against a pro-homeowner bill

Hear the lament of the California CAI LAC about a pro-homeowner bill.

  • AB 2502 would give financial incentives for owners to unfairly manipulate their legal obligation to pay HOA assessments by refusing to pay for approximately one and a half years or up to $3,600 until the association can take appropriate legal action for that owner to pay. This will cause financial havoc for HOA’s. Owners should never be given a right to intentionally stall the payment of debt.
  • Owners should not be given the right to unilaterally change the payment plan that was lawfully entered into by and between the owner and HOA. There would be no reason to enter into a plan if an owner could change it at will.
  • HOA’s must be able to retain counsel or other professionals to assist them in payment plans. The bill permits HOA’s to retain experts IF the owner grants permission to do so. HOA’s, just like owner’s must always be given an ability to retain professional assistance.
  • Creditors, like HOA’s, need to use collection agents periodically. Those agents, like other businesses, require payment. This bill makes it extremely difficult to pay those agents and as a consequence, HOA’s will rarely use them.

 

This is a desperate attempt to turn homeowners against their  own best interests, and to support the oppressive,  authoritarian HOA de facto government!   Hey CAI guys, what about adhesion contracts; “no need to see” constructive notice to bind one to a contract and to surrender one’s rights, freedoms, privileges and immunities; kangaroo court due process procedures; the right to subsequently alter the contract at purchase time without the buyer’s consent; unfair election procedures; and no enforcement against violation by the HOA government?  What about these gross injustices? 

To claim that homebuyers openly and fervently embraced this  treatment by the HOA is an insult to the good people of California.  It is grossly disrespectful and demeaning. 

 

This Grassroots Alert email alert ends with the true objective of CAI:  

Thank you for helping us preserve association solvency!!!  [and our income stream]

Case study: Just how are HOAs independent principalities?

The Arizona Senate Government Institutions Committee failed to pass, for the second consecutive year, a bill reaffirming the civil government’s power and authority over public roadways.  Bowing to pressures from an unincorporated town, Sun City, the legislators accepted the right of a group of private people, who are governed by CC&Rs, to infringe, usurp, and trespass upon local government ordinances.

Why is the Senate committee deferring to private agreements, which ignore constitutional law and its protections of our rights and freedoms?  Why is the legislature agreeing to HOA political government supremacy over public laws, while not recognizing the HOA as a de facto government and holding it accountable as such?  This deference gives the HOA pretty much of a free ride. 

We need to ask on what basis does the Restatement of Servitudes, which offers recommendations to the judicial system by pro-HOA “legal-academic aristocrats”, proclaim: “Although zoning regulations and servitudes are usually compatible in the sense that the more restrictive prevails . . . .”[i]   What does “usually compatible in the sense that the more restrictive prevails” mean?  And, we also need to ask is the current legal doctrine of CC&R supremacy legitimate and constitutionally valid? 

The Arizona Attorney General, in a 2006 Opinion[ii] on this issue, with respect to county fire code authority, cites case law and provides the following conflicting opinions:

  1. In general, when a contract is incompatible with a statute, the statute will control. . . . The exercise of police power to protect the public welfare, such as the enactment of fire codes, may supersede provisions in private contracts like CC&Rs if the government’s actions are reasonable and appropriate to the public purpose.
  2. restrictive covenants cannot avoid obligations imposed by parking ordinance;
  3. municipal ordinance imposing fence requirements supersedes restrictive covenant;
  4. The provisions of these and other fire codes supersede conflicting provisions in CC&Rs.

 

  1.  State or county fire codes supersede CC&Rs when fire code provisions directly conflict with CC&R provisions.
  2. When a fire code provision and a CC&R provision are not in direct conflict, but rather, are both restrictive, the provision that contains the more stringent restriction will control and will establish the permitted use.

 

The first 4 items from the AG’s Opinion are consistent and reflect an unequivocal doctrine that statutes and ordinances supersede CC&Rs.  While item (4) above introduces the issue of “conflict”, it still holds that the ordinance controls even when there is conflict.  Items (5) and (6) above, which are found in the summary section of this short 5-page opinion, are contradictory, and conflict with the first four items taken from the “Analysis” section of this Opinion.. 

We are now faced with the question: what is meant by “direct conflict” as opposed to just “conflict”?   The AG offers no clarification of these terms. This hair-splitting distinction reverses the cited case law and serves to support CC&Rs as controlling over ordinances when the covenant is “more  restrictive.”  

Perhaps, to better understand these words, we can ask: What meaning can be attached to “indirect conflict”? If, for example, a parking ordinance restricts parking from 10:00PM to 6:00AM, is  a covenant restricting parking at any time “more restrictive” or in “direct conflict”?  The pro-HOA quick answer is: obviously it’s more restrictive.  The criterion of  “more restrictive” to grant HOA agreements as controlling is without any rational legal basis to serve as criteria for the denial of legitimate government authority as set forth in the statutes and ordinances.   The only rational basis for a government interest for the surrender of civil authority to a private entity is that “that’s what this private group wants.”  

But the denial of our rights and privileges rises to a constitutional issue, which must requires a more stringent test of “a compelling and necessary government interest”. Those raising the “safe parking” issue in opposition to the have over remedies in law to effectively address their concerns without a wholesale grant of authority to the HOA. . “More restrictive” denies rights belonging to the people by a private organization —  the right, in our example, that the people enjoyed from freedom to park at all other unrestrictive times.  “More restrictive” directly conflicts with the rights belonging to the people.

It should be understood that any such enforcement by the courts could be challenged under the state constitution’s “privileges and immunities” clause, or under the color of law doctrine of 42 U.S.C 1983.

Every person who, under color of any statute, ordinance, regulation . . . subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress . . .

 

Covenants that are unconstitutional, contrary to public policy, unreasonable, or arbitrary and capricious are invalid and unenforceable.  Pro-HOA devotees offer the desperate and misleading argument that “members agreed to be bound by the CC&Rs, raising the issue of “contract interference.” Which leads to a multitude of questions concerning the validity of the consent to have agreed under the requirements for a bona fide contract.  Which leads to the argument that servitudes law with its constructive notice doctrine — homeowners are bound, sight unseen to the CC&Rs — controlling issues of constitutional law.[iii]  Which “turns the Constitution on its head” and leads to questions of a constitutionally valid surrender of one’s rights, freedoms, privileges and immunities. Which, coming full circle, leads to covenants that are unconstitutional, contrary to public opinion, unreasonable, or arbitrary and capricious are invalid and unenforceable.

Notes


[i] Restatement (Third) of Property: Servitudes, § 3.1 cmt. c (2000).

[ii] ATTORNEY GENERAL OPINION, Terry Goddard, No. I06-005, (R06-009), November 15, 2006.

[iii] Supra, n. 1, § 3.1, cmt. h. (“The question whether a servitude unreasonably burdens a fundamental constitutional right is determined as a matter of property law, and not constitutional law“).

Who prosecutes for homeowner justice against HOAs?

 

April 12, 2010

Rep. L.

Arizona House of Representatives

                                                                                            email letter

 Dear Rep. L,

I’d like to thank you and your assistant for contacting me in an attempt to assist the xxxx with their condominium issues.  I had followed their earlier Petition with the now “dismissed” Office of Administrative Hearings back in March 2007 — one of the first cases to be heard by OAH. 

I spoke with Bob and reviewed his materials sent to me, and the zzzz CC&Rs.  My earlier criticism of Bob’s complaints to OAH stand today:  most constitute dissatisfaction with the performance of the board and/or property manager, but are not actionable in court (I am not a lawyer). The ALJ in 2007 found it to so, but did act on one of the 12 issues submitted to OAH for adjudication.  Bob won, and the condo association was given a $500 punitive penalty.

Sad to say, I cannot help him.  Under present legal conditions, no one can, or will be able help him attain justice — court costs, pro-HOA state laws, and an adhesion CC&Rs “contract” favoring the HOA all put the odds on the HOA’s side. I am speaking not about the dissatisfaction issues, but the real violations of state laws and the governing documents. Bob must spend his own money, like so many other homeowners, in order to obtain justice against lawbreaker associations.  While state laws make fines and foreclosure against homeowners legal, they do nothing to punish violator associations and management firms. 

The statutes do little to protect the homeowner.  He is treated with disrespect and indignity as a second-hand citizen. On one hand the statutes are “telling” the people it is of general public interest and benefit to get “deadbeats” to obey the governing documents, and to pay those assessments.  But, on the other hand, complaints against the association are dismissed as a private matter without appropriate enforcement — a class 2 misdemeanor, for example — and are not a public concern for the legislature. This failure to punish lawbreakers when it comes to associations amounts to a dual standard against the people in favor of private entities that function as authoritarian de facto private governments.

The adjudication of HOA complaints by OAH had leveled the playing field somewhat, providing attainable —”affordable”, to use a term used to defend the state’s protection of HOAs — justice, where the homeowner could go before an independent tribunal, without a lawyer and without the need to know the 100 odd rules of civil procedure contained in some 200 pages of “legalize.”  The constitutionality of the statute was not defended by the Attorney General, or by the legislative leadership, resulting in a superior court disgraceful default decision. Consequently, Bob comes before you and pleads for relief, because there is no place to go, not even to the OAH where he could once hope to have found justice.  In the short history of OAH, pro per homeowners won 42% of their petitions against their HOA and its attorney.

I’m sorry to say that, after 10 years as a homeowner rights advocate, the Arizona Legislature has created and continues to permit this shabby treatment of many good citizens, including Bob, by failing to enact HOA reforms. Reforms with enforcement against the association and a bill of rights to protect homeowners.

Respectfully,

George K. Staropoli

The legitimacy of HOA boards and state legislatures

Is your legislature, the “sovereign” of the state, a legitimate government?  This is a question that the people, and your government, have avoided asking and answering, but it must be addressed today.  State legislatures have been acting, and the people have unknowingly accepted, the legislature as the “people” rather than as the representatives of the people.  Constitutional scholar Randy Barnett argues, in reference to Congress, but applicable to all states and state legislatures,

Many people no longer conceive of Congress as the servant of  — and checked by — the people.  Instead they picture Congress as We the People itself. Under the prevailing theory of “popular sovereignty”, the legislature is thought of as the people personified, entitled to exercise all the powers of a sovereign people.

Because “the People” can “consent” to alienate any particular liberty or right . . . legislatures . . . can restrict almost any liberty and justify it in the name of “popular consent.”[i]

We, the people, have forgotten and the legislators have ignored, that the basis of our representative system of democracy rests on the consent of the people, not on the divine right of kings, on the right of “We the People” to govern themselves. As Barnett asserts,  “They [the Founding Fathers] made this declaration because they believed that the consent of ‘We the People’ was necessary to establish a legitimate government.”[ii]   We have witnessed decisions by the California Law Review Commission[iii], the NJ Supreme Court[iv], the Texas Supreme Court[v] and the Arizona Legislature[vi], to name a few instances, completely contrary to a just and faithful representation of the people within their respective states.  And it is this failure to represent, in good faith, all the people for their benefit — the general public — and not for the benefit of a “faction” of the people, whose influence is weighted so heavily as a result of the moneyed special interests that gives rise to concerns about the legitimacy of our legislatures.

The legitimacy of our government, as set forth in the Preamble to the Constitution, rests on the consent of the people.  But, in a representative system of government the practical answer to 100% consent, or “actual consent” by each and every person, is “majoritarian” rule, or the rule of the majority.  Understanding that our legal system, not moral system, holds all non-consenting people to be bound by the proper decision of the majority.  In other words, all the people are held to acquiesce and to obey the decisions of the majority, even those to which they did not give their actual consent.  The important question that must be asked is: Does this practical solution to the effective functioning of a representative system create a moral obligation in conscience to obey the law?  Barnett sheds some further light on this question,

Only if it is legitimate can an existing constitutional system issue commands to the citizenry that bind individuals in conscience.  Therefore, though some degree of acquiescence may be necessary to establish a command as positive law, more than acquiescence is needed to create a moral duty to obey such a command.

[Majority] consent legitimates lawmaking only on the assumption that individuals have rights and there are things no person or group can do to them without violating their rightsFor a law is just, and therefore binding in conscience, if its restrictions are (1) necessary to protect the rights of others and (2) proper insofar as they do not violate the preexisting rights of the persons on whom they are imposed.

Without actual consent, liberty must be strictly protected. In the absence of actual consent, a legitimate lawmaking process is one that provides adequate assurances that the laws it validates are just in this respect.  If a lawmaking process provides these assurances, then it is “legitimate” and the commands it issues are . . . . binding in conscience unless shown to be unjust.[vii]

When we examine bills before our legislature, especially those bills protecting homeowner associations or denying the people their rights, freedoms, and liberties; and their privileges and immunities under their state constitutions, we should be conscious of the legislature’s obligations to the people  that they represent.  That they are not a government unto themselves that cannot do any wrong!  That their legitimacy rests on just laws respecting the rights and privileges of the people without violating the rights of others.  That their acquiescence to obey these unjust laws and covenants cannot be misconstrued and interpreted as having  consented in good conscience to have agreed with the laws or with the HOA’s governing documents.  

The pro-HOA supporters led by the national lobbying group, and self-proclaimed educator for HOAs, CAI, simplify the above to a false and erroneous sound bite that the homeowner “agreed to the governing documents.”

The vast majority of these HOA and condo statutes and “acts” do not measure up to qualify as legitimate laws.  The government, realizing that it cannot achieve a voluntary acceptance and willingness by homeowners to obey these laws in conscience,  must resort to repressive and punitive laws as found in any other dictatorship or banana republic, even those with a facade that the people have a right to vote.  These unjust laws mimic the private government “constitutions”, the governing documents of these planned communities, with their authoritarian HOA governments.

America needs to return to fundamental democratic principles, and to the unmistaken intent, goals and objectives of the Founding Fathers, that does not include “maintaining property values”, as summarized in the Preamble to the Constitution:

We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.

 

References


[i] Randy E. Barnett, Restoring the Lost Constitution: The Presumption of Liberty, Ch. 2 (Princeton University Press, 2004).

[ii] Id, Ch. 1.

[iii] George K. Staropoli email letter of April 11, 2006 to Mr. Hebert, Exec. Dir., California Law Review Commission in reference to AB 1921 (major rewrite of the Davis-Stirling Act, absent Chapter 2, Member Bill of Rights (http://pvtgov.org/pvtgov/downloads/AB1921_letter.pdf).

[iv]  Committee for a Better Twin Rivers v. Twin Rivers, 929 A.2d 1060 (NJ 2007) (HOA constitutional free speech case) (http://pvtgov.org/pvtgov/downloads/TR_SC_decision.pdf).

[v] Inwood v. Harris 736 S.W.2d 632 (Tex. 1987) (homestead; covenants running with the land supersede Texas constitution).

[vi] Failure to pass HB 2034 (2009) and HB2153 (2010) asserting public government, not HOA, control over public streets; default superior court decision in February 2009 declaring an Arizona statute providing for the independent tribunal adjudication of HOA disputes by the Office of Administrative Hearings as unconstitutional.(http://pvtgov.org/pvtgov/downloads/OAH-constitutionality.pdf).

[vii] Supra, n. 2

Dysfunctional legislatures supporting de facto private HOA second governments

 

“Wherever the real power in a Government lies, there is the danger of oppression.”   James Madison.

In my prior commentaries[1] on Arizona’s constitutional question of “who controls public streets”, HB 2153, I spoke of “legitimate governments” and made it quite clear that a contractual, private de facto government — an HOA — cannot be held to be legitimate.   The homeowner associations government  is chartered not under the statutes and constitution that govern de jure, legitimate, public entities, but is chartered under corporation law. Where corporate law is applied in an uneven manner and subservient to the common laws of equitable servitudes.  And where servitude law has been upheld by the courts and recommended as the controlling body of law when in conflict with constitutional law. 

It appears my arguments, mainly borrowed from legal documents and constitutional scholars, against the private government HOA control of public streets has failed to bring legislative leaders to their senses.  Any actions not in support of, or failures to act in support of,  the supreme law of the land and the laws and Arizona Constitution does, in itself, raise questions of the legitimacy of our state government.  And of the consent and obedience in conscience to be bound by any such laws or “commands” of the legislature. In a very practical and real manner, it is a question of the legitimacy of the actions of the legislative leaders who are members of the majority party that controls the legislature in Arizona — the Republican Party. 

Constitutional scholar Randy Barnett speaks about legitimacy, consent to be governed, and obedience[2]: 

Only if it is legitimate can an existing constitutional system issue commands to the citizenry that bind individuals in conscience. Consent legitimates lawmaking only on the assumption that individuals have rights and there are things no person or group can do to them without violating their rights.  For a law is just, and therefore binding in conscience, if its restrictions are (1) necessary to protect the rights of others and (2) proper insofar as they do not violate the preexisting rights of the persons on whom they are imposed.

Though actual consent [100% consent of the governed] can justify restrictions on freedom, without actual consent [or majority rule], liberty must be strictly protected. In the absence of actual consent, a legitimate lawmaking process is one that provides adequate assurances that the laws it validates are just in this respect.

“If angels were to govern men, neither external nor internal controls on government would be necessary.”  James Madison.

For an unspoken reason, the Senate leadership appears set on withholding HB 2153 from a vote by the people’s representatives.  Having already passed the House, I cannot envision any justification for holding this bill, for this willingness to abdicate legislative powers and authorities to private, contractual organizations. Organizations whose “constitution” obtains it power over the people within the subdivision, not by constitutional law, but by the common law of equitable servitudes.  This failure to hold a vote in the GOV committee sends the message, “who needs the Constitution”?  It is a repudiation of the Constitution that legislators are obligated to uphold.  It reveals a dysfunctional legislature, as we witness on the national level in Congress, reflecting a divisive ideology as author Brownstein describes in The Second Civil War[3]

The political system has evolved to a point where the vast majority of elected officials in each party feel comfortable only in advancing ideas acceptable to their core supporters. . . . The political system now rewards ideology over pragmatism. . . . What’s unusual now is that the political system is more polarized than the country. Rather than reducing the level of conflict [the legislature] increases it.

 
The Constitution does not permit a second, private, form of political government in America!

Let HB 2153 be heard in the GOV committee, and passed on to the full Senate!

References

1.  In general, see  HOA Private Government (http://starman.com/HOAGOV).  See also, Guest Opinion,  Government of the people, by the people, for the HOA, William M. Brown (internet commentary).

2.  Randy E. Barnett, Restoring the Lost Constitution: The Presumption of Liberty (Princeton University Press, 2004).

3.  Ronald Brownstein, The Second Ciivl War: How Extreme Partisanship Has Paralyzed Washington and Polarized America (Penguin Books 2007).