Tag: quasi-government

Court requires constitutional due process in HOA foreclosures

The enlightenment and awareness that the US Constitution and its due process requirement extends to private government HOAs is gaining momentum. ”The writing is on the wall.”

In the recent Colorado appellate decision in Hummel (C&C Investments v. Hummel, 022COA42, April 14, 2022)  concerning proper notice of homeowner foreclosure by the HOA, the court surprisingly acted sua sponte —in the name of justice. The courts have repeatedly failed to invoke, in the pursuit of justice as it claims to be its fundamental purpose, its right to act sua ponte — on its own — raising discussions of issues not raised by either party.  

In Hummel the question arose as to whether or not the homeowner was given notice of impending foreclosure action by the HOA.  The HOA send a processor server who said he posted the notice in the newspaper, which is allowed under certain circumstances. She discovered her plight only when an eviction notice was pinned to her door. The question be determined was, What is proper, legal service?

While court rules require that the HOA serve notice, the court held that it “must also meet the mandates of due process before foreclosing on an individual’s property” and that,

“[I]t is not unreasonable to require a homeowners association to make a good faith, rather than a highly technical, effort to effectuate actual notice to a fellow neighbor before foreclosing on their property.”

In support of its opinion, the Court referenced the Colorado appellate court’s court view:

“Although an association is not the government, it serves “quasi-governmental functions” when enforcing covenants and must abide by the due process requirements of the United States and Colorado Constitutions.“

“[T]he United States Supreme Court has long held that when foreclosing a lien against an individual’s home, due process requires “notice [that is] reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.”

The appellate court found that the trial court failed to adhere to these principles before ordering a default judgment.

Do you stand behind the US Constitution or your HOA ‘constitution’?

Many courts have referred to the Declaration of Covenants, Conditions and Restrictions (CC&Rs) as the HOA constitution.

Arizona’s HB 2158 is a second try (Arizona HB 2052 restores homeowner constitutional speech protections ) to prohibit restrictions on HOA members’ freedom of political speech with respect to HOA governance issues and matters.  It has passed put of committee and Caucus.

This important bill has been sitting for an extended 2 week time awaiting the House leadership to schedule it for a full House vote of all the members. NOT A GOOD SIGN!  My years of experience lead me to believe it does not have the support of the leadershp that has the right, under House Rules,  to withhold bills from further votes.

HB 2158 (2022). You can read the bill at the legislature’s website. Read the important amendments below. This is your chance to stand up for constitutional protections against the CAI lobbyists, many whose members have been or are SCG directors – conflict of interest!

“L. Notwithstanding any provision in the community documents, an associociation [sic] may not prohibit or unreasonably restrict a member’s ability to peacefully assemble and use private or common areas of the planned community . . . . An individual member or group of members may organize to discuss or address planned community business, including board elections or recalls, potential or actual ballot issues or revisions to the community documents . . . . The association shall not restrict posting notices of these informal member meetings on physical or electronic bulletin boards used by the association for posting notices for the association’s or board of director’s official meetings.”

This bill has support from the Nevada Supreme Court opinion in Kosor (NV supreme court upholds HOAs as public forums (re: Kosor 2021)) that contained several California opinions serving as legal precedent.

 “[A] unit owner’s association or a planned community association (association) may not prohibit a unit owner or member (member) from peacefully assembling and using private or common elements of the community . . . legitimate and valid criticisms of your HOA and its president and board are protected from HOA lawsuits of defamation and libel.”

“Nextdoor.com post qualifies as a public forum for the purposes of anti-SLAPP protections. . . .these steps [Kosor’s statements] do not seem to differ significantly from that which might be required to view posts on Facebook; that is, a post on Nextdoor.com is as compatible with expressive activity as one on the other platform, which we have already held can support a public forum.”

“The HOA here is no less of ‘a quasi-government entity’

* * * *

The following is an excerpt from a lengthy email sent to me by a long time AZ homeowner rights advocate, Dennis Legere. It and his email are made public with Dennis’ permisssion.  It  reveals the obstacles an hostiity he faces trying the get HOA reform legislation to restore lost rights and freedoms. It contains his comments on the heavy opposition  from CAI and AACM (AZ managers association, CAI trained).

“The ridiculous nature and hidden motivation of the HOA trade groups [CAI and AACM] is what makes any HOA meaningful legislation so difficult to get introduced or protected from demands from the trade groups for provisions that benefit them only.”

Take back controll of your HOA!  Write your Representative in support of this bill. Also write the sponsor, Jack Kavanagh (jkavanagh@azleg.gov) and the House leaders in support of this bill urging that it be submitted for a hearing by all the House members. Do it today!

House leaders:

Rbowers@azleg.gov – Speaker (R)

tgrantham@azleg.gov – Speaker Pro Temp (R)

btoma@azleg.gov – Majority Leader (R)

lbiasiucci@azleg.gov – Majority Whip (R)

rbolding@azleg.gov – Minority Leader (D)

ddegrazia@azleg.gov – Minority Whip (D)

jlongdon@azleg.gov – Asst Minortiy Whip (D)

What does “HOA” really mean?

What are we talking about when we hear “I live in an HOA” or “what are my HOA fees?” Allow me to clarify some important concepts and definitions that I have employed to help in understanding what we are really talking about.

  • The term “HOA” is commonly used in 2 different aspects.
    • While commonly used to refer to the alleged community, in reality the “community” is a real estate “package” of homes, landscaping, amenities, and rules.
    • “HOA” more aptly applies to the association itself, which is the de facto – in fact – political governing body of the subdivision or real estate “package.”
  • “Government,” meaning political government, is defined in its general sense as “the person or group that controls and regulates the people within a territory.” Since your subdivision is a territory, that makes the HOA a truly political government.
  • “Private government” is a de facto government as defined above not incorporated under municipal statutes but under nonprofit corporation statutes. As such, it is a functioning government unrecognized by the state as Cuba had been for years.
  • “Quasi-government” simply means for all intents and purposes having all the attributes of a municipal government, except the names have been changed to mislead the innocent public.
  • “HOA-Land” is my descriptive term for “the collection of fragmented independent principalities within America, known in general as “HOAs,” that are separate local private governments not subject to the constitution, and that collectively constitute a nation within the United States.”
  • “Structured tribalism.” Tribalism is a term currently in vogue to describe divisiveness in America. “Structured tribalism” extends that view to describe the intentionally planned policy for the acceptance and control of HOA-Land.[1] It views the fragmented HOA-Land as distinct villages and clans.

When I speak of restructuring the HOA, I am referring to the authoritarian, undemocratic body functioning outside of constitutional protections, and making it a democratic government subject to homeowner constitutional protections.

Will AZ Supreme Court address broad HOA issues of constitutionality?

As we approach an October 5th decision to decide to hear the Tarter v. Bendt defamation case[i] that raises free speech and limited- purpose public figure issues, I am hoping that the Court will address the real-world widespread misinformation regarding conditions and the legal status of homeowner associations statutes. This investigation by the Court is essential for a just and fair decision in the defamation lawsuit by an HOA president and attorney. Questions of failing to act in good faith and an abuse of the law by the plaintiff attorney with respect to filing a strategic lawsuit against public participation (SLAPP) was raised in my amicus brief.

This is not an ordinary defamation lawsuit but one involving the actions and conduct by the plaintiff in his capacity as the HOA president  and in the context of matters of HOA governance. In the recent Nevada Supreme Court opinion in Kosor,[ii] the Court held that “HOAs as public forums and the president as a limited-purpose public figure” and further held that an HOA “is a quasi-government entity ‘paralleling in almost every case the powers, duties, and responsibilities of a municipal government.’”

The decision by the Arizona Court will have widespread repercussions and consequences not only for Arizona, but for HOAs  nationwide affecting  statutes in every state. The legitimacy of a democratic country rests on just and fair laws for the people, as Professor Randy Barnett wrote,

A constitution that lacks adequate procedures to ensure the justice of valid laws is illegitimate even if it was consented to by a majority …. A law may be ‘valid’ because it was produced in accordance with all the procedures required by a particular lawmaking system, [the HOA amendment procedure, for example] but be ‘illegitimate’ because these procedures were inadequate to provide assurances that a law is just.[iii]

Since the context of the lawsuit relates to the legal status  and constitutionality of the HOA model of government, and to the statutes and CC&Rs “constitution” creating private contractual governments, did Bendt receive justice with a $500,000 award for the HOA president’s “pain and suffering? As applied to HOA statutes and Acts, will this Court heed US Supreme Court Justice Sotomayor’s dissent on the failure to uphold the Constitution?[iv]

“Presented with an application to enjoin a flagrantly unconstitutional law engineered to prohibit women from exercising their constitutional rights and evade judicial scrutiny . . . . Because the Court’s failure to act rewards tactics designed to avoid judicial review . . . . 

“To circumvent it [the Constitution], the [Texas] Legislature took the extraordinary step of enlisting private citizens to do what the State could not . . . .  It cannot be the case that a State can evade federal judicial scrutiny by outsourcing the enforcement of unconstitutional laws to its citizenry . . . .”

This case must be remanded to the trial court for consideration of the impact of HOA bias on the decision against Bendt.

Notes

[i] See HOA limited-purpose public directors and officers; The continuing saga of Bendt and public speech in HOAs; Pro Se Bendt amicus brief accepted by AZ Supreme Court.

[ii]  Kosor v. Olympia Companies, NV No, 75669 (Dec. 31, 2020).

[iii]  Randy Barnett, Restoring the Lost Constitution, Princeton Univ. Press, (2004).

[iv]  Whole Woman’s v. Austion Reeve Jackson, 594 U. S. ____ (2021) Sotomayor R, J., dissenting, Supreme Court of the United States, No. 21A24 [September 1, 2021]. (Abortion case).

“Private Metropolis” revisited

It is my strong belief that  the HOA legal model of local government played a part  in the demise of democracy in America[i] has been greatly assisted by the recent publication Private Metropolis.[ii]  In my prior post on Private Metropolis,[iii] I was very pleased by the opening Introductory paragraph,

The opening introductory segment encompasses a wide description of special  governmental units. It is loaded with constitutional issues and controversies that says it all quite plainly: “quasi-governments,” “shadow local states,” “the municipality is no longer the privileged seat of governance,” and “special purpose local governments” (including homeowner associations with some 27% of the population — according to CAI — as residents), that “became, in effect, shadow governments.” 

Unfortunately, these highly descriptive political concepts  used in this very broad study of local government failed to appropriately address the form of local government known as HOAs.  Scant attention is given to these associations by the authors. In the 312 pages “homeowner association” is mentioned just once and “CID” twice. But “shadow government” and “quasi-government” and “special districts” are tossed around quite frequently. Readers, having read the very enticing title, will be greatly disappointed by its failure to deal with the most direct affront to the eclipse of local democratic government: the HOA legal model of governance that has been supported by all state legislatures across this country.

HOAs, my generic term for community and homeowners associations, satisfy the fundamental definition of a political government.  Black’s Law Dictionary (7th Ed.) definition separates the men from the boys: “Modern states are territorial; their governments exercise control over persons and things within their frontiers.”  And that is the unique feature of political government that  distinguishes an HOA from  a business, a non-profit charity, a club, a union, etc. I believe that the decision to form HOA governance outside the domain of public government was intentional to avoid constitutional restrictions.[iv]

They are a de facto yet unrecognized form of local government — other forms being mayor-council, council-manager — born and created as private entities, and as such,  have escaped, for the most part, under the common defense prohibiting  any ”law impairing the obligation of contracts.” Although the other forms of public local government are subject and held to the Constitution and the laws of the land. HOAs meet every criteria set forth by the authors as indicated above and epitomize the eclipse of local democratic government. 

The authors appear to admit the failure of the  ivory tower “philosopher kings” (my terms) to actively participate in preventing the fall of local democracy: “Instead, even scholars who study local governments [only recently realized] the degree to which quasi-public institutions are insulated from the democratic process.”  That applies strongly to authoritarian HOA governments. 

Notes

[i] See in general, Whither goest local government? Restrictive HOAs or responsible public government (2009); CAI’s early awareness of HOA constitutionality, public mini-government (2021); HOAs are another form of local government (2021).

[ii] Private Metropolis: the Eclipse of Local Democratic Government,  Dennis R. Judd, Evan McKenzie, Alba Alexander, Global and Community Series, Vol. 32, Univ. of Minneapolis Press (June 22, 2021).

[iii]  Private Metropolis: explaining the demise of local public government.

[iv] CC&Rs are a devise for de facto HOA governments to escape constitutional government.