Special Treatment for HOAs

Required to Compensate for Defects

In the interest of full and open discussion, I am presenting a short summary of arguments by others regarding the private government aspect of HOAs and the special treatment of HOAs in order to make the concept work. I feel it’s important that CAI members in this email group [CAISLA] hear another side of the story. If you don’t, just click on “NEXT” and move on.

Much of this work can be found in 2 books:

· Common Interest Communities: Private Governments and the Public Interest, Barton and Silverman, Eds., 1994

· Privatopia: Homeowner Associations and the Rise of Residential Private Government, Evan McKenzie, 1994

CAI’s own Community First! publication, 1999, contains a paper by Professor McKenzie who makes arguments for the defective nature of HOAs, that they deprive homeowners of their civil rights and the need for adequate disclosure for new home buyers. In short, these arguments and positions are not new, have been around and published at least some 6 years ago and CAI is aware of them.

HOAs are a private government above the law because the courts, currently, treat them as a private contractual matter. The rights of citizens are suppressed and the law of the land is not applied as would be expected with a typical civil government. HOAs are totalitarian whose homeowners live at the suffrage of the BOD. A benevolent board brings harmony; a despotic board brings oppression. Which one do you have now? What will you have tomorrow? And there is very little that can be done by the homeowner – he’s told that he signed his rights away (anybody hear about Miranda Rights?).

Yes, vote them out we keep on hearing. Well, with only 50% of the citizens voting in a national election it is preposterous to expect a 50% or 67% VOTE OF ALL THE HOMEOWNERS, rather than of only those voting, to occur. If these are very important matters, then a larger turnout will occur. If not, then the issue wasn’t really that important to the members. The deck is rigged! The state’s interest, the HOA’s protection of property values, supersedes the rights of the homeowners as expected and granted in a democracy. That is the definition of “totalitarianism”.

Let me explain what I mean by “defective”. If you view the HOA as a corporate franchise being sold to homeowners, then we clearly see that it is a defective product or service that has required special treatment in order to make it a viable product. For example, take the argument for foreclosure as made in, “Foreclosure Offers Homeowner Associations Critical Enforcement Power” by Marjorie Jean Meyer, CMCA, PCAM argues,

“The right to foreclose is a harsh remedy, but one that is absolutely necessary if homeowner associations are to provide the services for which they were created.”

In any other context, the franchise would be permitted to go out of business rather than be supported by court decisions. Does your town or city act so harshly? Not even the IRS would dare do what BOD’s do! Similarly, the argument that holding BODs to the same oversight as civil government employees would result in volunteers not willing to serve on the BOD is an admission of another defect – the HOA will fail if we don’t suppress the civil rights all citizens have come to expect.

I ask why not fully disclose ALL the aspects of living in an HOA? Why not? Because special interests are afraid that home buyers just won’t buy when they realize what the deal is. There are other alternatives to protecting property values that the private government CC&R restrictions.

George K. Staropoli

Nov. 13, 2000