Restoring the lost Constitution to HOA-Land

Some 23% of Americans live in HOA-Land, that collection of fragmented independent principalities known, in general, as HOAs. Overwhelmingly their members swear by the HOA as the next best thing to Mom’s apple pie. It is hard to accept this undying loyalty to the HOA and its board of directors in view of the fact that their acceptance of HOAs is the result of an intentional indoctrination by national lobbying, business trade group that, in my mind, does not know how to spell “constitution.. Obviously then, those CAI surveys are suspect.

HOAs are separate, local private governments not subject to the constitution, and collectively constitute a nation within a defined geographical region known as the United States. “A nation consists of a distinct population of people that are bound together by a common culture, history, and tradition who are typically concentrated within a specific geographic region.”

“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.”

To provide the ignored but important and substantial aspects of the HOA legal scheme I have designated three books by StarMan Group under the collection, “Restoring the Lost Constitution to HOA-Land.” They are 1) HOA Common Sense: rejecting private government, a summary of 6 constitutional defects, 2) The HOA-Land Nation Within America, presenting the scope of outlaw private governments that deny constitutional protections to HOA members, and 3) The Plan to Restructure the Model of HOA Governance that advances a plan to restore the Constitution to HOAs while keeping the desired benefits of the “real estate package.” (All the above can be found on Amazon.com).

For a historical perspective of HOA-Land, see:

  • The Homes Associations Handbook (ULI, 1964). Not publicly available but I have a copy of the 434 page document).
  • Privatopia: Homeowner Associations and the Rise of Residential Private Government (1994), Evan McKenzie.
  • Community Associations: The Emergence and Acceptance of a Quiet Innovation in Housing (2000), Donald R. Stable. (ULI and CAI production).

(All the above, except for the Handbook,  can be found on Amazon.com).

Goldwater Institute ignores HOA unconstitutionality

Reading through the highly respected Christina Sandefur’s paper in the Harvard Law Journal,[1] I was deeply disturbed by the absence of any discussion of similar conduct by homeowners associations (HOAs). Her paper criticized city ordinance prohibitions on short-term home rentals. “These cities treat home sharing itself as the crime.” It is a dangerous proposition that government . . . [to] be able to criminalize violations of that judgment” [“on how to use their properties”].

Yet, in her one single sentence, Sanderfur holds HOAs harmless that, by means of the governing documents, use their “police powers” to prohibit short-term rentals and from criminalizing such acts by their members. While that may be the role of a homeowner association when people contract to determine to how to use their properties, a city government should not have that power.”

Sanderfur’s arguments against government statutory prohibitions, include in part,

  • “Cities look at this as a way to increase revenues” by imposition of fines,
  • “They get to outlaw the activity,”
  • Intimidate residents [of the city] into giving up their property rights”,
  • “This is not only abhorrent public policy, and
  • “It is also unconstitutional”.

It seems that these arguments apply to HOAs also, but it appears that nobody is listening. I do not understand and cannot understand this blindness to the constitutional issues surrounding HOAs, especially from the prestigious, defending the Constitution, public interest Goldwater Institute.

What is the rationale behind this blindness when there is substantial legal authority in support of unconstitutionality, from the basic outlaw government of independent principalities that reject the US Constitution,[2] to placing the doctrine of equitable servitudes property law over constitutional law and contract law;[3] to gross misrepresentation in the selling and marketing of HOAs that invalidate and thought of a bona fide consent to be bound.[4]

When will Goldwater question the constitutionality of the HOA model of government? Why is Goldwater viewing an HOA just as a real estate subdivision package of amenities, landscaping, homes and not as a distinct form of local government[5] functioning outside the laws of the land as an outlaw government.

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.” (George K. Staropoli).

 CIDS [HOAs] currently engage in many activities that would be prohibited  if they were viewed  by the courts as the equivalent of local governments.[6]

There is no compelling and necessary justification for HOA special treatment. It’s time to end these outlaw private governments that violate even the most liberal home rule, self-governing provisions of state laws and constitutions.[7]

I do not see Goldwater’s name on the list of Arizona’s Request to Speak positions on SB 1412,[8] a bill prohibiting HOAs from restricting the political free speech rights of homeowners in regard to political issues within the HOA community. California just passed SB 323, a progressive bill supporting homeowner rights, and Florida has SB 623 in the works also seeking homeowner rights and freedoms within the HOA legal structure.[9] This a very good time for Goldwater to speak out on this bill and HOA member rights, freedoms and privileges and immunities as US citizens.

 

The Goldwater Institute, including Sanderfur, has been on my distribution list for some time as well as Victor Riches, President & CEO, whom I met and discussed HOA problems as far back as the early 2000s when he was an Arizona legislative staff analyst. I also met with and discussed HOAs with Clint Bolick, now AZ Supreme Court Justice, who in 2013 accepted my request for legal assistance to sue the State of Arizona. He was preempted by Tim Hogan of ACLPI.[10] It was with Nick Dranias that I had a pleasant Arizona Capital Times exchange on HOA issues.[11] He offered, privately, some advice that I have incorporated into my Truth In HOAs position and Homeowner Declaration.

 

Notes

[1] Christina Sandefur, “Turning Entrepreneurs into Outlaws,” p. 45 et seq., Harv. J.L. & Policy, Winter 2020. Sanderfur is an Exec. VP, Goldwater Institute.

[2] See The HOA Principality (2005); HOA-Land: the product of the decline in democratic institutions in America. (2018).

[3] 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.” See CC&Rs are a devise for de facto HOA governments to escape constitutional government (2015).

[4] See HOA consent to agree vs. “the will of the majority”. (2019).

[5] The four recognized types of local government are : commission, and council-manager, the most prevalent. See in general, Roger L. Kemp, “Forms of Governance,” Managing America’s Cities: A Handbook for Local Government Productivity, McFarland & Co., (2007).

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

[7] See in general, HOAs violate local home rule doctrine and are outlaw governments, concluding paragraph. (2014).

[8] AZ RTS positions as of today, March 4, 2020.

[9] See Toward a democratic HOA subject to the Constitution (2020).

[10] See AZ Attorney General admits SB 1454 HOA to be invalid and without effect (2013).

[11] See Goldwater Institute: regulating HOAs “stands Constitution on its head” (2008).

CAI claims Factbook 2018 at home with Democracy in America.

I am quite impressed with CAI after looking over its latest Factbook of 2018.[1]  It is a voluminous document of some  297 pages in total that includes numerous copies of government generated reports and studies, as well as from secondary real estate attorney articles and papers.[2]  It is a lofty presentation designed, I believe, to give the distinct impression that CAI is indeed the all-knowing expert regarding HOAs: that CAI has all the answers!  It reminds me of a product of the Ministry for Public Enlightenment and Propaganda.[3]

In more concrete terms, CAI appears to be reacting to outspoken advocate criticisms by reaffirming and doubling-down on its support for HOA-Land. The Factbook contained some surprises of a material nature that I took note of and that I  will briefly address here.  Each of the following five CAI positions in the Factbook is an affirmation that HOA-Land represents a better community and society than found under the US Constitution; which is not recognized in the Factbook or given just lip service elsewhere!

Furthermore, I found the audacity of CAI to equate HOA contractual, private,  de facto governments with the 1832 America presented in Democracy in America to be very disturbing (see Finally below). It reflects a severe detachment from reality in a document purported to be factually based.

First, In Part 2,[4] CAI makes an effort to explain the 4 goals of the Factbook that starts with a lecture on “evidence-based management.”  It distinguishes anecdotal evidence as contrasted with science-based evidence in deciding the course of action, or “intervention” as stated in the document. It’s a dissertation on what makes a solid basis for analysis and conclusions.

However, it’s a slap at those people who just “tell stories” without proper vetting.  Of course, it is silent on and not related to the manner in which the Factbook  got its facts, and gives the impression: “not us but those guys, you know who.”  I took it as an attempt to defend their studies as unquestionably valid. Advocates can indeed make CAI twitch!

Second, Part 2[5] contains a surprising link to the Stabile book of 2000[6] that is a self-congratulatory  book, in my view, funded by CAI and ULI.  What are they thinking?  Here’s a quote from Stabile.[7]

[HOAs are] a consumer product sold by profit-seeking firm, a legal device, a corporation reliant on both coercive powers and voluntary cooperation, a democracy, and a lifestyle.

With this plan, TB50 [The Holmes Association Handbook] set out the plan that would be taken in forming the CAI.

It has a documentary style, but not a very flattering one to CAI as shown above,  if you reject its premise that HOAs are not a political government. A detailed analysis of the Stabile book can be found in my History paper.  Scroll down to “2000.”

Third, another lecture now on how HOAs function is addressed via a link to a CAI published 26-page book on sale for $15.00.[8]  A short, one-page excerpt is provided that reads right out of the CAI School of HOA Governance.[9]  Nothing new here. No mention of violations of the US constitution, bill of rights, due process or equitable servitudes, etc.  But then again, I forgot. Who am I?  I’m not even a lawyer. I’m David battling Goliath.  CAI has all the answers.

Fourth, another shocker for me.  A link is provided to the Susan Fletcher French article, Making Common Interest Communities Work: The Next Step.[10]   But what are they doing???  As stated above, the reference is not flattering to CAI since it is an obviously biased statement coming from a legal authority produced to guide judges in common law. And it’s a 2005 article and we would like to know what has happened over the past 14 years!  Here’s part of her conclusion:

I conclude that states should provide administrative support for community association governance with education, dispute resolution, and enforcement services. Common interest communities have become too important to leave to their own resources and the judicial system. There is much that states can do and there are several models of successful programs. They should take the next step.

I hope you all recall that French was the lead editor (Reporter) in the 2000 rewrite of the Restatement 3rd Equitable Servitudes.[11]  She is referenced in the Foreword:

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.

Finally, to all my disbelief, CAI references  Alexis de Tocqueville’s 1835 Democracy in America, and equates  HOAs as a continuation of America’s striving

“For continuous improvement at all levels of society and government.” Alexis de Tocqueville reflected on the constant activity that characterized America in the 1830s for continuous improvement at all levels of society and government. Little has changed since that time. He would be right at home at a community association board meeting, at a CAI Chapter program or at a national CAI Conference or Law Seminar.”[12]

The implication is that HOAs are also striving for the same  improvements as de Tocqueville discusses in 1830s America.  Not so! Understand that Democracy is a 2-volume set of some 800 “fine print” pages encompassing a multitude of aspects and conditions about America in the early 1830s. It is replete with discussions of the Constitution, of the American values and principles of liberty and freedom, and of the workings of our democracy. Not a word about contractual private government!  It is unconscionable for CAI to make such an unfounded comparison that implies private HOAs are a natural development for the making of a better America.

CAI is silent and does not address Professor McKenzie’s comments in his seminal 1994 book, Privatopia,[13]

HOAs currently engage in many activities that would be prohibited if they were viewed by the courts as the equivalent of local governments.

The balance of power between the individual and the private government is reversed in HOAs. . . . The property rights of the developer, and later the board of directors, swallow up the rights of the people, and public government is left as a bystander.

 

In summary, CAI comes across as dogmatic – not recognizing or accepting any statements contrary to its beliefs — and suffering a cult-like blindness to reality. The Factbook is an act of desperation and an inability to defend its position in an open debate as I had proposed back in 2006.

In a brief phone call during which he’s quiet and almost courtly, he explains that Common Ground is CAI’s “house organ,” and that he’d be more comfortable with a debate or similar format where he could express himself at length, without the risk of being quoted out of context.[14]

 

References

[1] Community Association Fact Book, 2018, Parts 1 – 8 (July 4, 2019).

[2] Parts 4 -6 and 8 are indexes to details on each of the states and are not included in the total pages. There are also several links to other reports, articles, studies, etc. also not included in the total page count above.

[3] See in general The Avalon Project, Yale Law School.

[4] FB Narrative, page 7.

[5] Id.

[6] Donald R. Stabile, Community Associations: The Emergence and Acceptance of a Quiet Innovation in Housing, Amazon.com. A 256-page book priced at $95.00.

[7] See my Commentary, “A historical look at the purpose and intent of the HOA promoters,” HOA Constitutional Government (January 27, 2008).

[8] Supra n. 3, page 8.

[9] The foundation and principles of the School can be traced back to CAI’s Public Policies, The CAI Manifesto (its 2016 “white paper”), its numerous seminars and conferences, its Factbooks and surveys, its amicus briefs to the courts, and its advisories, letters, emails, newsletters, blogs etc. I have designated these foundations and principles collectively as the CAI School of HOA Governance.

[10] Susan Fletcher French, Urban Lawyer, Vol. 37, Summer 2005.

[11] the Restatement (Third) of Property: Servitudes, Susan F. French, Reporter, the American Law Institute  (2000).

[12] Supra n. 1, Part 2, section 4.

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

[14]The Lone Ranger has never stopped fighting for HOA truth and justice,” quoting CAI Common Ground Editor Christopher Durso, (Common Ground, May/June 2006).

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.

What is this “association law” thing all about?

In the TimesDispatch internet column, “Housing”, two attorneys talk about “association law” (Mercer, Trigiani are guiding voices in homeowner association law). They are real estate attorneys. 

He [Mercer] and his business partner, Lucia Anna “Pia” Trigiani, with offices in Alexandria and Richmond, are considered the top Virginia lawyers in their field, their peers say. . . . They are a major force in what goes on with association law, and they are equally good at what they do,” [a real estate attorney] said.

But the featured spokesperson, Trigiani, is not identified as a CAI member who received an outstanding person award this past April from CAI, the national lobbying organization for HOAs, the Community Associations Institute.

Lucia Anna “Pia” Trigiani, Esq., a principal with the Virginia-based law firm MercerTrigiani, received one of CAI’s most prestigious honors April 19 at the organization’s 2013 Annual Conference and Exposition. (Trigiani, Dyekman Among Members Honored by CAI).

What is not made clear is just what association law is?   It is not a recognized classification of law, but one promoted by the legal-academic aristocrats and CAI.  (Community Association Law Seminar, Jan. 23–25, 2014 | Las Vegas, NV.”)  The massive Restatement of Law series consists of some 96 volumes covering 26 categories of law, but no “association law” category.  In fact, laws pertaining to HOAs and covenants/servitudes, the legal basis for HOA authority, can be found in the Property: Servitudes series.

From my research into HOAs reading law encyclopedias, treatises, journals, court cases, legislation, articles and books — I’m not claiming to be an expert, but well read — association law appears to be a conglomeration of constitutional, property, contract, corporation and tort law.  These laws are cherry-picked to support the legitimacy and validity of the Declaration of Covenants, Conditions and Restrictions (CC&Rs) that is the fundamental basis of HOA legal authority.  Whatever aspect of each of these laws that serves to support HOAs is incorporated into association law. Where there are conflicts with laws or contrary laws they are ignored, or association law is declared superior, or first modified and then incorporated into association law. 

Attorneys like to promote association law as sui generis, or a unique thing in a class of its own not subject to other laws.  This new thing, this association law, is an attempt to establish as legitimate and binding a new set of laws that conflict with and repudiate the Constitution.  Laws that distinguish and repudiate the fundamental principles of our system of government and principles of justice, derived from the organic law of this country – the US Constitution, its Bill of Rights, and the Declaration of Independence.  And for obvious reasons — for domination, power and control.

In his seminal book, Privatopia: Homeowners Associations and the Rise of Residential Private Government, Even McKenzie wrote in 1994,

HOAs currently engage in many activities that would be prohibited if they were viewed by the courts as the equivalent of local governments. . . . The balance of power between the individual and the private government is reversed in HOAs. … The property rights of the developer, and later the board of directors, swallow up the rights of the people, and public government is left as a bystander.

And this is the purpose in establishing “association law” — to avoid constitutional protections, to deprive people of their life, liberty, or property  without due process of law, and  to deny homeowners of the equal protection of  the laws that apply to all public bodies.

 

See  The questionable role of HOA attorneys