Desert Crest Court Decision: A perversion of American values and government
August 11, 2003
By Marcus Aurelius (View author info)
Scottsdale, Arizona - For those in voluntary associations, or in defunct associations, or in existing mandatory associations, pay heed!
You could be next to give up your property rights to a private corporation
without your consent, as if it were an eminent domain issue. Your association
is being treated as a government by the courts and not as a private contractual
obligation and anything goes.
The recent Desert Crest CID legal action in California is very, very
disturbing. The recent California Appeals Court decision (E032843) brings
serious issues into play relating to the law, both contractual and constitutional
law, that can have far reaching consequences for all homeowners.
First, let me deal with a conjecture, but a plausible conjecture in
our political and legal environment. The association's law firm, Peters &
Freedman, was just sued for RICO violations in another case (South Bay Judicial
District of San Diego case # GIS 11535) involving the foreclosure of homes
where the trustee was a member of the law firm -- 4 instances occurred. Now
RICO is a criminal prosecution sledgehammer, especially in regard to the
alleged RICO violations and a startling decision by the court to allow such
charges to be filed. The fact that the charges were allowed can have immense
implications for other actions taken by Peters & Freedman. Immediate
talk of other actions by other homeowners was abundant.
In view of the above, was the tentative decision ("not to be published
in official reports") by the 4th District, Division 2 appeals court a "go
easy on them" action, possibly as a result of pressures?
Second, some facts. Without getting into the very complex details of
the legalities, that include lax conformity to state law and the requirements
of the CC&Rs, I find the opinions and views used by the appeals court
very, very disturbing. Let me just highlight a few, from my layman's point
A few facts, though. The country club that centers on this issue of
common area and facilities are not owned by the homeowners association, nor
did it consent to have this property given to a for-profit organization to
operate, the developer. The developer was defeated in court on earlier claims
that the CC&RS did require mandatory members and fees and lost -- membership
was voluntary. So, we have this suit on the amendment in question to make
Third, some issues:
1. The court throws out your property rights and dismisses contract
law with its justification that a majority vote can obligate a non-agreeing
party, a signatory to the contract. The court said,
"A person who buys property subject to the CC&Rs is bound not only by
existing provisions ... but also by every lawful amendment enacted in compliance
with that provision". So, the association really doesn't need your vote, just the number of votes as required by the CC&Rs. Anything goes.
Now, every real estate agent and title company knows that the signatures
of all owners are needed when selling a multiple-owner property, including
the spouse. If a partnership or corporation, an affidavit signed by all the
partners, or reflecting a board decision, giving the person signing the agreement
the right to act for the non-signing parties is required. The attorney helping
the homeowners, Trevor Sheehy, in an interview with Shu Bartholomew on On The Commons, said that if a burden is to be placed on a property owned by 3 people, all 3 must sign the agreement.
Further, contract law deals in specifics and not in open ended promises
or potential, unspecified obligations -- the "meeting of the minds" requirement.
"Agreeing to agree", as what a future amendment entails, is not binding.
In effect, the courts have applied eminent domain police powers to a private
community and for the benfit of a for-profit corporation, which is another case of state protection of private associations. It's unconstitutional and evokes state actions protection.
2. The court is rewriting the laws to shape them to conform to its view
of good public policy and social welfare benefits. The court said, "In resolving
this question, we conclude ... The amendment which required club membership
and the payment of fees, benefited the homeowners by increasing their property
values and providing access to the recreational facilities".
The court is making new laws. Three appointed persons are usurping legislative powers.
And these laws are saying that increasing property values by means of coerced
dues and mandatory membership in private organizations, to a third party
for-profit organization is a matter of good public policy. It's a goal of the government to accomplish this, irrespective of the law. This is dangerous! What next?
The Preamble to the US Constitution says:
"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 blessing of liberty
to ourselves and our posterity, do ordain and establish this Constitution
of the United States".
The Preamble does not say "to maintain property values by means of private government homeowner associations".
We cannot allow these opinions that seem to be based on a select choice
of biased legalities and legal theory, to become precedent which will affect
future court decisions across the country.
We cannot allow your non-signature to an unconscionable adhesion contract
to bind good, innocent people -- who thought that they were buying a home
-- to be subject to an open ended interpretation of the obligations of that
contract. This is a perversion of the American system of justice.
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For more information, please check out the articles listed below:
* APPELLATE COURT RULES AGAINST DESERT CREST SENIORS - AHRC News Services
* THE GOLDEN FEARS OF HOA YEARS - Ann Roth
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