CautionYou are now leaving the American zone.

 

 

The Fallacy of Disclosure of a Hopelessly Flawed System

 

 

 

 

 

“Democracy at its Finest”?

 

 

 

 

By Frederico Lazarte

 

 

 

 

 

 

 

 

T

here is trouble in utopia.

 

Ramona Ripston was the Executive Director of the American Civil Liberties Union Foundation of Southern California, one of the largest ACLU affiliates in the nation. She wrote, “The historical reality is that the people who wrote the Constitution and the Bill of Rights recognized that one of the most important objectives of any American government would have to be limiting the ability of a majority to impose tyranny on all.”

 

Homeowners associations have no such limitations on the ability of a majority or minority to impose tyranny on all, yet fifty million Americans live in them. There is a lot of frustration with this form of government.

 

CAI is a trade association that lobbies on behalf of the vendors to HOAs, “makes contributions to political candidates for the US Senate and House of Representatives,” and engages in legal activities, mostly involving “friend of the court and enemy of the homeowner” briefs that CAI files in federal or state cases.

 

All the while, the Corrupt, Apathetic and Indifferent lobbyist claims it is “not a PAC (Political Action Committee), and makes no financial contributions.” Of course, CAI–PAC “is a separate segregated fund, apart from all other CAI budgets and funds, that accepts voluntary donations and makes contributions” ¼ but they are both CAI.

The Industry would like HOAs (read “BODs”) to be strong. That way the vendors to HOAs can make sure the BODs “Work for Nothing but Get Compensated in Other Ways.” One hand washes the other. The vendors scratch the BOD’s back and the BOD scratches the vendors’. Next thing you know it, your BOD becomes more interested in transferring your money to the vendors, than it is in putting community first.

“Since it is CAI’s public policy to ... coerce, bribe.... states”, HOA homeowner rights are gradually vanishing.

 

Homeowners in associations want them back. Most of those that become active in the political arena want the powers of homeowners associations curtailed. They are trying to reform homeowners associations.

 

But we submit that this form of government is not sustainable.

 

Consider just one problem with homeowners associations (HOAs). Less than one percent of the association can embroil the entire HOA in legal tangles to the financial benefit of vendors to HOAs. Less than one percent of your association can entrench itself and your HOA’s vendors, via collusion. Petty tyrants — that are impossible to deal with — can suppress, repress, oppress, persecute and prosecute anyone that they perceive as standing in their way with “frame and blame” defamation, reprimands, letters, reimbursement bills, liens, foreclosures (judicial or nonjudicial), neighborhood cleansing, inconsistent (selective) enforcement of the governing documents and the intentional infliction of emotional distress.

If you sue your board, you unleash the monster.

 

Cantankerous board members can ignore the entire community’s wishes and claim that they are following the Business Judgment Rule — and be right! The board cannot be contested.

 

Typically, a director is supposed to keep the interests of the corporation foremost in mind. There is this overriding responsibility to protect the corporation. But often, what is in the best interests of the corporation is not what is in the best interests of the community. Directors, out of fear of being sued, prioritize the interests of the corporation. The captains of the ship forget the crew and the passengers own the ship jointly with them.

 

One “industry patsy” wrote, “You have to realize that in a community you cannot always get your own way”?

 

What? Does he mean to imply that HOAs aren’t Burger King?? I knew I should’ve taken a right turn at that McDonalds on the corner of Gulag and Fief Way! This makes me want to sing.

 

Hold the intentional infliction of emotional distress.        
Hold the unregulated gross negligence and willful misconduct.
All we ask is that you let us,
Have human, civil, property and constitutional rights.

Have it your way,

Have it your way,

At The Colony!

 

No, only board tyrants with domineering personalities can always get their own way. What volunteer would want to oppose one of these vindictive bullies? What makes it worth it?

 

The system inspires collusion.

 

So next time an industry partisan sings the many praises of this wonderful personal form of up close and personal representative democracy, don’t accept it. Question authority.

 

The next time you see homeowners complain in open meetings — and the board members remain indifferent and just laugh at their face (or remain silent because, as homeowner Mika Sadai puts it, “the homeowners are powerless and their complaints do not amount to anything”) — ask yourself if we should privatize government.

 

Ask yourself if you want a CID with an HOA established with governing documents called “contracts”.

 

Ask if your HOA is a government and, if so, should the Fair Debt Collection Practices Act be amended to exempt HOAs? Should HOAs be allowed to engage in unfair debt collection practices?

 

Ask if your HOA is a corporation created so your neighbors can control your life, since you voluntarily “contracted” away your constitutional rights, and — if so, is this what you were looking for when you walked into the realty? Were you looking to buy a share of a fictitious person that watches you and peeks over your fence to find violations — one that is being dominated by other corporations to the detriment of the members??

 

Don’t let the Homeowner Control Industry get away with painting your privatized government as a government when it behooves the Industry, and as a private contract you willingly and voluntarily entered into when it doesn’t. It’s not a true government; it’s not a true corporation.

When the realtor provided the disclosure to you, did it disclose what you really needed to know?

 

Has the realtor disclosed to you what you might have to do? Martin Luther King, Jr., move over. The HOA fiefdom homeowner serfs are here. Ready for your “carefree living”? Whoops! There’s one little teensy weensy thing we forgot to tell you...

 

“(Their Legal Counsel stood on the Courthouse steps and vowed he would ‘destroy us.’)

...

“The bottom line is — Developers must give consumers what they advertise, even when those promises are not contained in a standard real estate contract.”

 

Carefree living?

 

<<  ... jurisdictions lack relevant authority.  Unfortunately, this serves only to disadvantage the average consumer who cannot always afford or find competent Legal Counsel.  There is no one advocating on behalf of these owners, and this must change. I would encourage everyone to read the Article in Volume 2, Number 1, of the Community Association Law Journal “Doing Well, Doing Good, or Doing Both?”

“Demands ARE increasing for a reform of common interest governance, but to date lawyers are often found resisting change rather than advancing it. ”

Any suggestion that you “sue the bastards” goes against the need to promote the achievement of a “sense of community.”  Those who advise Associations should be willing to take the moral responsibility for the spectrum of consequences this creates for communities, and for the families within.  It is up to the legal profession to represent the community as a whole — and to ALSO bring the “homeowner perspective and their interests to the attention of policy makers.”

 

There are interests in developing communities, which are adverse to one another. Consumers merely ask that someone start looking out for their interests, BECAUSE those they assumed to be, have chosen to advocate on behalf of only those with “deep pockets.”  >>

 

“These are very sobering and frightening posts,” responded one reader. “This alone should be enough to convince homeowners to do their ‘home’ work before getting into the HOA fiefdom.”

Got at least six months? Oh — and by the way — if anybody actually does spend the amount of time it takes to understand HOAs (and the HOA they’re considering buying into), who would buy? And after you’ve learned all about HOAs, and the HOA you’re planning on buying into, guess what? It’s election time!

 

Yup! Assuming anyone actually gets onto the board, that’s not part of the good ol’ boys and girls network, things might actually change. “Past performance is no guarantee of future performance.”

 

I’m sure the realtors just can’t wait for homebuyers to understand HOAs in depth: “Here, take this disclosure packet with you. There’s a dolly in the next room. Oh, and by the way, “the Glade is under the sink.”

“Come back in six months, Mr. and Mrs. Homebuyer, after you understand what you’re getting into and what the potential risks are. And, in anticipation of your first question — if you DO come back (not that I expect you to, if you ever actually read the disclosure packet) — no, there’s no such thing as Rogue Board Target Insurance. If you get on the ‘dislike list’, you’re on your own. Start reading about Martin Luther King, Jr., save up $152,000 and buy a set of dice and a lucky rabbit’s foot.

 

“Just remember this: Conflict will never happen to you, and if it does, well, you can, well — wait, I know the answer to this one. Your options are, well, you can ¼ um ¼ uh ¼ well ¼

 

“Oh yeah! You have the right — did I say ‘right’??

 

Oh yeah! You have the ‘right’ to ‘ MOVE’!  Call me at (I’LL) NEVER–TELL.”

 

Read “Grassroots Efforts Defeated CAI Takeover” for carefree living instructions.

 

Oh, and by the way, did anyone mention the quarterly “new member orientation meetings ¼ to familiarize new members with the responsibilities that go with living in a CID”?

 

You were looking for “the responsibilities that go with living in a CID” when you walked into the realty, weren’t you??

 

“Haven’t we got enough on our plates just trying to maintain our homes,” asked one reader, “raise families and work?  Must we add becoming political activists to the long list of life’s responsibilities in order to protect likely one of our largest investments – our homes?  Whatever happened to the old saying “a man’s home is his castle”?  Maybe it should be “A man’s home is the HOA’s castle”.

 

Cunningham’s house was the BOD’s castle, at least for a while.

 

The problem is, what needs to be disclosed will never be disclosed. There is more useful consumer information on the back of a candy bar than on the disclosure form your realtor gave you. This is why homebuyers end up in HOAs with no real realization or understanding of what they’re getting into.

 

When will the following be disclosed?

 

Hopelessly flawed, unaccountable homeowners association BODs and their vendors create victims that are in active opposition to this de facto government and Caring Attitude Impostors label them as “disgruntled” “malcontents” to discredit them and keep them from getting anything changed that might cost HOA vendors money. “The industry has audaciously laid the blame at the feet of its very customers. ‘You should have read the documents;’ ‘You should have gotten more involved or tried to get on the board;’ etc. etc.”

 

We call it “frame and blame”.

 

Lack of disclosure makes the purchase contract impaired, because neither the law nor the “equitable” servitudes that are presented to the homebuyers at or soon after closing protect homeowners from abusive powertrippers. The “equitable” servitudes force homeowners to pay for their own road maintenance, street lights, security force, park maintenance, etc. — even though they pay the same property taxes as everyone else. They do not protect homeowners from whimsical boards that violate the governing documents and the law at will. They do not prevent organized gangsters from turning neighborhoods into fiefdoms. If HOAs do not follow the law, big brother looks the other way.

 

The “contract” does not prevent homeowners associations from violating the constitutional rights to due process and equal protection, so all of them are unconstitutional. They do not inform homebuyers that they are unreasonably agreeing to put up their homes as collateral to assure the viability of a corporation, that is a de facto government, run by amateurs. The 10 Things a Homeowners Association Won’t Tell You are not disclosed. The true nature of homeowners associations is not disclosed.

 

They don’t even disclose the basics, much less go beneath the surface in any area, because this product is just too complicated to explain to homebuyers seeking a home in less than a thousand hours.

 

And that is why the purchase contract is impaired. Most homebuyers don’t stand a ghost of a chance of understanding what they are getting, but CID homes were surely not what most of them were looking for. Most were seeking a home, not a share in a corporation.

 

There is, therefore, no meeting of the minds.

 

There is no disclosure to homebuyers that the attorney general won’t enforce member rights that are specified in the Corporations Code.

 

Consider this quote, from the California Attorney General’s Non–Profit Mutual Benefit Corporations web page: “If you would like to complain that your non–profit mutual benefit corporation has ... failed on request to provide ... specified member rights, you may submit your complaint in writing to:

 

“Office of the Attorney General

“Public Inquiry Unit”

 

This is nice theory, but it is downright treasonous what the web page leaves out.

 

Consider the reality, expressed by Robert M. Raymer, an assistant to Attorney General Bill Lockyer:

 

<<  Raymer noted “It is the long standing policy of the Attorney General’s office to exercise our discretionary authority established under Corporations Code section 8216 by providing a public service to members of non profit mutual benefit corporations who complain to us in writing that their rights, as enumerated in that body of law, have been violated.”  In response, the Public Inquiry Unit sends a “notice of complaint” letter to the board of directors of the corporation.  “In many instances, our ‘notice’ letter is effective in resolving the complaint or at least encouraging the board to review its procedures in relationship with the law,” Raymer notes.

 

But complainants whose disputes are not resolved as a result of the “informal intervention” of the Attorney General’s office are directed to seek private civil remedies, Raymer added.  “Government cannot be expected to resolve all civil disputes at taxpayers’ expense as the costs of litigation and the required bureaucracy are prohibitive,” Raymer wrote.  >>

 

If “ complainants whose disputes are not resolved as a result of the ‘informal intervention’ of the Attorney General’s office are directed to seek private civil remedies” — suing — what good does it do for the attorney general to advertise he “has authority under Corporations Code section 8216 to intervene on behalf of members of a non–profit mutual benefit corporation (such as a homeowners association) who are denied certain specified rights”?

 

All the attorney general does is mail a letter to the HOA! HOA lawyers aren’t stupid!! They know that the attorney general will “exercise [its] discretionary authority” and not follow up! The attorney general advertises the fact!!

 

Maybe if attorney generals exercise such poor discretion, state legislatures should replace “discretionary authority” with “responsibility”. Attorney generals should stop pretending to be “providing a public service” be directed to consider it doing their job.

 

Of course, that would only happen if our representatives were representing CID homeowners. They are not. CID homeowners are apathetic and, therefore, grossly uninformed. “CAI attorneys and lobbyists work to water down or just outright kill true homeowner–friendly legislation,” writes Joni Greenwalt, author of Homeowner Associations: A Nightmare or a Dream Come True? “CAI is both determined and organized,” she writes. CID lawyers don’t want homeowners to have recourse outside the courts — so CAI fights that tooth and nail.

 

How much “discretionary authority” does your boss give you?

 

THE ATTORNEY GENERAL IS ENCOURAGING HOMEOWNERS TO (1) WASTE THEIR TIME AND THEN (2) FOLLOW UP BY GETTING SUCKED INTO THE LITIGATION VORTEX!!!

 

Some public service.

 

It is not a civil matter when they are:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·        Cloud Callout: We want you to sue us! If you lose, you will have to pay the legal fees of both parties. The total could easily be more than the equity in your home. You might have to sell your home and move. (That’s the idea!) Even if you win, the in v:shapes=Libeling you and assassinating your character in minutes/newsletters/flyers/letters/police & public records/newspapers

CAI/Chubb

Lawyers
 

 

Judges
 

Legislators
 
 

 

 

Lobbyist
 
 

 

 

 

Text Box: Homeowners in associations don’t shop here.

 

 

It’s not a civil matter when HOAs evolve into Racketeer Influenced and Corrupt Organizations. This has been happening for a long time now. Racketeer Influenced and Corrupt Organizations are functioning as unchecked, unaccountable, unregulated, and out–of–control “mini–governments run amok.”

 The evidence: Horror Stories

 

The California attorney general’s web page states “Many times our ‘Notice of Complaint’ from this office will be sufficient to prompt an otherwise recalcitrant board of directors to resolve your complaint. However, you may wish to discuss your problem with your own private attorney.”

Homebuyers don’t know they will need $65,000 for this —and another $92,000 in the bank in case the judge they get is a former president of a CAI association and doesn’t recuse himself.

 

Homeowners have to roll the dice looking for justice. The only parties sure to win are the lawyers.

 

As long as neighborhoods with HOAs are mislabeled neighborhoods with “corporations” in the law instead of neighborhoods with “mini–governments”, state attorney general weenies across the country will continue to claim “discretionary authority” even in cases of blatant HOA violations of the law!

 

And exercise poor discretion.

 

And fail miserably to effectively prompt recalcitrant boards of directors “to provide ... specified member rights” “as the costs of litigation and the required bureaucracy are prohibitive”.

 

If attorney generals consider the costs of resolving HOA disputes prohibitive, what do they think the costs are to homeowners whose “rights, as enumerated in [Corporations Code section 8216], have been violated”? According to Florida Community Association Management, “over 90% of Florida’s Homeowners’ Association members can’t afford to enforce their legal rights in the Florida courts.”

 

I’d say 90% is a conservative figure.

 

I bet the lawyers love it that the legislatures allow the attorney generals make the courts the only recourse for wronged homeowners. This enriches these lawyers!!!

 

Its unjust enrichment, because much of the time it’s these lawyers that are causing the problems.

 

“Nobody wanted to take this thing to court, ... but one of the homeowners was a lawyer and she was friends with the association’s lawyer. They both campaigned for it. They both said we would win. I knew we wouldn’t.”

 

The trial lawyers contribute to reelection campaigns. Why? So that they can get what they want from our elected officials. Don’t think your elected officials are representing you. If they were, they would not be “incrementally tweak[ing] statutes written by and largely for the benefit of the industry … instead [of] asking the legitimate public policy question of whether we should continue down the road of privatizing local government by continuing to enact more legislation on top of an already sizable body of industry–authored statutes enacted not necessarily to benefit voters and consumers, but to maintain and preserve the future of the CID industry”.

 

What do the trial lawyers want? Money. It’s just business to them.

 

I bought a home in an HOA.

 

No one disclosed to me that my dues would be used to retain an attorney to represent the BOD, even though the lawyer was supposed to be representing the HOA, of which I THOUGHT I was a part! The Arizona state bar ethics rules reportedly state that the HOA attorney represents the association and not its constituents, and that the attorney must act in the best interests of his client — the HOA.

 

No one disclosed to me that the board of directors would break rules because they are covered by an insurance policy with duty to defend coverage that does not exclude such wrongful acts as libel, slander, defamation of character, harassment, discrimination, waste of assets, misleading reports or other misrepresentations, failure to deliver services, acts beyond granted authority, gross negligence or willful misconduct (a common allegation), and wrongful termination of homeowners — I mean — employees...

 

Al Capone never had it so good.

 

I wasn’t informed that my association’s governing documents didn’t include a conflict of interest code.

 

I wasn’t informed that my association’s governing documents didn’t include a gift policy inside of a broader ethics policy, like most respectable corporations because my HOA is FAR from respectable. Our boards of dictators — I mean, directors — want gifts!

 

No one disclosed that to me.

 

I didn’t understand that “allegations of gross negligence or willful misconduct” were “common”. I didn’t even know what gross negligence and willful misconduct were. Now I know from personal experience. I also know “there is no vehicle, no avenue, no means of effective redress of grievances when it comes to a homeowner making legitimate claims that an HOA board has failed to conduct themselves as required by state law

How can it be claimed I understood the “contract” when this wasn’t disclosed to me?

 

No one let me know that HOAs were created to discriminate.

 

No one disclosed to me that the HOA I was considering buying a home in was run by busybodies with no life, people with nothing better to do, board members that were not in their right mind, gangster property managers, and lawyers looking for litigation time bombs to slip into the governing documents.

 

Did the realtor, or the purchase contract, make me aware that: