Subj: Desert Crest Homeowner Association Court Decision: A perversion of American values and government  
Date:8/13/03 12:14:18 PM US Mountain Standard Time
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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In view of the above, was the tentative decision ("not to be published in official reports") by the 4th District, Division 2 appeals court a "go easy on them" action, possibly as a result of pressures?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 of view.

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 fees mandatory.

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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