Constitutional Protections Subverted by Nebulous Court Decisions
[Note: I will be quoting from several sources. References are at the end of the email].
Perhaps Evan McKenzie (1) can clarify the problem of cc&rs and covenants running with the land. In regard to California, he writes:
"In the absence of a clear decision by the courts or the legislature regarding the legal classification of CID [HOA] boards as either governments or businesses, and in the absence of meaningful public regulation, their enforcement actions have come to be judged by a nebulous judicial standard of 'reasonableness'. This is a venerable principle of the common law of 'equitable servitudes' [...that] states that 'the covenants and restrictions in the declaration shall be enforceable equitable servitudes, unless unreasonable' [quoting Section 1354 of the California Civil Code] ".
As McKenzie then argues, we get all this litigation trying to define reasonable restrictions that affect our lives. He also discusses (on page 169) the Lakeside citation referred to by the Appeals court, that stated: "Restrictions in CC&Rs are enforceable [...] when they prohibit conduct [... that] has a reasonable likelihood of interfering with the rights of other condominium owners to the peaceful and quiet enjoyment of their property" [restriction on having pets]. In Desert Crest, how can the judges rationalize that forcing homeowners into paying for the use of for-profit facilities, where in the past they have not paid for the use of such facilities, be construed as interfering with the rights of others?
Rosenblum echoes McKenzie's arguments regarding "reasonableness" of restrictive covenants. She writes (3), "Overall the doctrine that has emerged from civil case law upholds RCA regulations that provide a reasonable means to further the collective 'health, happiness, and enjoyment of life' of owners. Unreasonable regulations are 'arbitary or capricious', violate public policy, or bear no rational relationship to the purpose of the association as set out in enabling statutes and bylaws".
How can an amendment designed to aid, by mandatory payments, a private for-profit corporation that owns and operates private, non-HOA common area properties and facilities be construed as having any relationship to the purpose of the association? An association that was created as a voluntary association? Oh, having a recreation facility adjacent to the association benefits the association, and therefore, mandatory dues are permissible. Watch out for this reasoning!
In the Desert Crest court decision, the court argued that the amendment was valid because it served a purpose of benefiting the owners and the developer and current owner of the country club, regardless of whether or not the facility was a private, for-profit company or whether or not membership was voluntary or mandatory. The court justifies its decision by referencing a Robert Gilmore, "an employee of 29 years with the California Department of Real Estate (DRE)" involved in creating and enforcing policy decisions of the department.
A quote from his declaration [apparently no testimony or discovery was conducted to question this individual and DRE views in support of associations] states, "The DRE allows subdividers to adopt and record Covenants, Conditions and Restrictions ('CC&Rs') that shift a certain amount of expense to homeowners and homeowners associations for the operation of privately held country clubs which are integrally related, or immediately adjacent to the Association ... This is common practice". But, is this good public policy? NO! Is it legal from a constitutional point of view, since this agent within an agency is making law and only the state legislature can do that? NO! Is it reasonable? NO!
Dilger (4) writes about regulating RCA with respect to restrictive covenants. "Some attorneys have argued that some of the servitudes used by RCAs are not enforceable by the courts because they obstruct other, more important societal goals, such as [...] democratic participation in land-use decisions, or the protection of personal autonomy and identity. They argue that government has a right and an obligation to issue regulations to prevent RCAs from obstructing these more important goals."
Steven Siegel (2) concludes his lengthy analysis of legal cases and issues with: " Because RCAs are, in essence, sui generis [one of a kind], this Article concludes that a sui generis constitutional doctrine is necessary to properly assess the constitutional issues at stake". With respect to servitudes and CC&Rs, Siegel writes, quoting Shelly vs Kraemer, "when judges command private persons to take specific actions which violate the Constitution if done by the state, state action will be present in the resulting harm to constitutionally recognized rights".
In other words, as applied to Desert Crest, can a government agency force people to pay a private company for unwanted services? No. You don't pay directly for trash removal, or for the postal service unless you voluntarily choose to do so. Otherwise, taxes and fees are paid to a governmental agency that disburses these monies to contracted private companies; that is, contracted with the government and not with individual homeowners.
Specifically in regard to covenants, Spiegel argues "that RCA restrictive covenants should be reviewed, for constitutional purposes, as municipal zoning ordinances: If a zoning ordinance in its operation were unconstitutional, then an RCA restrictive covenant, in the same area and having the same effect, should likewise be unconstitutional".
This is a rotten state of
affairs. The courts are still defining and redefining the legal
obligations of homeowners with respect to CC&RS while millions of
homeowners are paying the price and being held obligated for things that they
have little awareness of, and may in the future, be bound to. And
the stink goes further with the refusal of the state legislatures and
responsible agencies to so inform the home buying public of this vague and
changing legal environment, but one they are expected to have knowledge of and
will be held to, many times with their feet held to the
1. McKenzie, Evan, Privatopia: Homeowner Associations and the Rise of Residential Private Government, Yale University Press, 1992
2. Siegel, Steven, "The Constitution and Private Government: Toward the Recognition of Constitutional Rights in Private Residential Communities Fifty Years After Marsh v. Alabama", The William & Mary Bill of Rights Journal, Spring 1998
3. Rosenblum, Nancy L., Membership & Morals, Princeton University Press, 1998
4. Dilger, Robert Jay, Neighborhood Politicals: Residential Comunity Associations in American Governance, New York University Press, 1992. p 155
The HOA Citizen
Citizens Against Private Government HOAs
George K. Staropoli