Saturday, March 12, 2011

Industry attorney: Public policy on local govenment privatization contradictory

Given the list of benefits homeowners associations provide to local governments, it is easy to question why government is so rarely a friend to homeowners associations. Healthy homeowners associations feed tax coffers and ease budget strain for cities and counties, yet cities (and especially the state) often act as though they believe homeowners associations are an untoward restriction on individual freedom. The inherent contradiction in the local governments’ requirement that homeowners associations exist versus the state’s increasingly strict regulation of homeowners associations is the source of many difficulties the industry faces. Realizing this contradiction exists and informing our legislators of the contradiction are two important steps towards eliminating it.

If the government wants homeowners associations, it should allow them to function pursuant to their CC&Rs with minimal governmental intervention. If the government believes homeowners associations threaten individual liberty, it should not require their existence and let the market dictate their fate.

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So asserts Mark Holmgren of the law firm of Carpenter Hazelwood in a post this week on the firm's blog. Holmgren's commentary is notable in that it shows at least some degree of acceptance within community association industry circles that privatization of local government is public policy and not simply a market-driven "lifestyle" or "housing" choice.

About a decade and a half ago, an Arizona industry spokeswoman with an outfit that goes by the acronym CAI castigated the owner of this blog as a "tabloid journalist "for suggesting as much in his 1994 book Privatopia: Homeowner Associations and the Rise of Residential Private Government.

11 comments:

Anonymous said...

"government is so rarely a friend to homeowners associations."

"cities (and especially the state) often act as though they believe homeowners associations are an untoward restriction on individual freedom."

Where is this magical make-believe place?

I want to move there!

Evan McKenzie said...

Good point, Fred. And note that this attorney says "If the government believes homeowners associations threaten individual liberty, it should not require their existence and let the market dictate their fate." I agree with that statement. And it is obvious to anybody that HOAs do threaten individual liberty, so local overnments should not be requiring them.

Anonymous said...

What about local governments that will allow anyone, in one of these groups (and their lying legal talent friends) to take your home? Contract, or not. Truthful, or not.
Nobody knows what they are doing to you and you (the victim) are advised, that " all this is stupid and it will be thrown out of court." "There is nothing to worry about, I will take care of all this." "No judge will allow something like this, they (the judge cannot ignore the law..."
"Don't talk to them, as their lies and slanderous comments mean nothing...." More and more and more...Well, then, no REAL court date, as not one who was supposed to show up did, not even the atty who started and created this mess. Missed appeal deadlines, like I was supposed to know there was one and the extortion call, "you have 24 hours to find an attorney a file a bankruptcy, or they are going to sell your home tomorrow at a sheriffs sale, for the fraudulent $17,000 + in liens (I HAD NO CLUE AND FOR WHAT)the conflict creating attorney, who could not even show up, was not our property manager, or anything, I (we) had no contract with for what the were alleging and what they were alleging never happened....AND THESE FORECLOSURES, IN PENNSYLVANIA, ARE ILLEGAL. ONLY, LIENS MAY BE APPLIED. HOW MANY WAYS, HOW MANY TIMES, DO PEOPLE HAVE TO BE TOLD WHAT FRAUDULENT FORECLOSURES ARE AND THAT THEY DO HAPPEN TO NORMAL, NICE, BILL PAYING, LAW ABIDING, CC&R FOLLOWING HOMEOWNERS?
This industry and the mess some of these groups (and their friends) make of innocent peoples lives is a detriment to health, family and financial stability and is criminal.
I know it is not everywhere, and some groups are better than others, but the victims deserve rectification. "Public Policy," can be argued all day long but, until the thieves, thugs and bullies, of this industry, are held accountable and put behind bars, no matter who they are, and/or who they know, and states offer NO PLACE FOR THE INNOCENT HOMEOWNER TO GO (no office to legitimately investigate, or intervene, etc.) NO ONE SHOULD TRY TO LIVE IN ONE OF THESE GROUPS! My experience and opinion!
I hope and pray the thieves, thugs, lying, home stealing criminal BULLIES, of Monroe County, Pennsylvania are the among the first to be held accountable for these horrific acts against innocent homeowners. I am sure there are deadbeats who don't pay bills but, in my experience, it is the perpetrators WHO ARE THE DEADBEATS, AND WANT TO BRING YOU TO THEIR LOW LEVEL OF LIFE, CRIMINALITY AND THIEVERY. Intentionally lying to judges, knowingly filing fabricated, false lawsuits, fabricated liens, etc..ISN'T THIS CRIMINAL? The true, very real victims of these fraudulent foreclosures deserve to be heard and rectified.
I can't wait to see what some others from this industry finally fess up to...Is it "mea culpa " month for some of the perpetrators in this industry?

Keep up the great work, Dr. McKenzie and followers...

Shu Bartholomew said...

Let us not overlook the fact that CAI wants governments to adopt and maintain a "hands off" policy towards regulating associations UNTIL CAI decides it wants more powers. That's a different story, then they find some clueless legislator to sponsor a bill for them.

In Virginia the homeowners have not asked for any laws regarding HOAs. In fact, we spend all our time trying to kill bad bills.

The other observation is that no one wants to accept any responsibility for associations. Governments say developers want them, the industry points to municipalities and homeowner but don't like to point out that it is a $50 BILLION annual industry and a whole lot of those $$$$ go into their pockets.

HOAs, in my opinion, are a bad idea and we ought start dealing with the tough questions instead of tweaking them trying to make them work. They won't work, no matter what you do to them.

Shu Bartholomew

Fred Fischer said...

Why HOAs ? has a different answer depending on what side of the table one sits on. On one side are developers, municipalities and association industry servrsers who in part or in whole who depend on housing associations for either their livelihood or for revenues. Then on the other side all by themselves are the property owners (members) who are also the primary shareholders involved. Who also by industry design takes on all the risks and liabilities for all the shortcomings and illegal acts involved in operating the homeowners association including issues caused by their industry serves providers.

Shu is right, HOAs are a bad idea, when used to govern peoples lives and property especially since they were tried during America's early history and failed so using them again hasn't produced any better results except for those who profit off them.

With all do respect to Mr. Holmgren, "The concept of restrictive covenants (upon which planed communities and condominiums are based)..." is incorrect and if I may suggest please read Evan's book, Privatopia for the correct answer. You may also want to research what a Planned Community is, since Washington DC and Savanna GA are in this category but obviously not governed under housing association control.

Anonymous said...

I read the article and suggest another one here:


The "property values" argument is a complete lie when it comes to HOAs. The HOA creates value in the owners property for a bunch of non-owners but not for the owner.

HOAs also create artificially high valuations which benefit taxing authorities but not the homeowners. Here's just one example.

When the municipality mandates an "open space", or some amenity, or that the utility infrastructure be put in place by the developer - the only place to recover those costs is from inflated prices for the lots/homes in that subdivision.

The homeowners, however, do NOT own the open space, amenity, or infrastructure. So the although the home COSTS more, the owner is getting LESS for his dollar. Moreover, since the infrastructure will be taxed because it is privately owned (HOA corporation) and because the homeowners are the sole funders of the HOA corporation, they will get hit again. Meanwhile the municipality collecting the taxes is not providing fundamental governmental services nor any maintenance on any of this because it is "private".

This "public-private" partnership is wonderful for the HOA vendor/debt collectors but not so great for the homeowners who find out that i) they are second class citizens; ii) "HOAs preserving property values" for the owner is a myth; iii) the vendors are so predatory that despite having paid MULTIPLE TIMES for some fundamental governmental service, the homeowner isn't going to get it from the HOA either.

Anonymous said...

Arizona’s Fiftieth Legislature – First Regular Session:

Financially self-interested “stakeholders” (corporate associations, management companies and law firms) are asking the Legislature to do legislatively that which they were unsuccessful judicially (Waugaman v. Troon Village Association, Carpenter Hazlewood Delgado & Wood, PLC), unilaterally amend the association members' "private contracts" with their associations without the members' knowledge, consent or vote notwithstanding the private contracts' threshold [90%, 80%, 75% or other threshold greater than 66.67% or, in associations requiring a simple majority, increase the threshold vote necessary to amend their contract)] to amend any of its provisions.

"Stakeholders" historically opposed to "one-size-fits-all" legislation ask the Fiftieth Legislature by HB2441 to do exactly that, amend their "bad documents" (some having well-served their communities for 5, 10, 20, 30 or more years [DeMenna, CAI’s lobbyists, re his association's age {35 years} and long-standing threshold {90%} to amend his community's documents]) legislatively rather than amending the documents by the vote of the members pursuant to the contract’s/document's threshold

"I have always and will advocate for legislation that keeps control of community associations local - with the members and their elected board of directors. I will disfavor legislation that usurps or trumps local control in favor of a one-size-fits-all approach that the legislature has used in recent years to address political signs, solar panels, real estate signs, parking and other issues." Scott B, Carpenter, CHD&W, PLC, 01/11/2011

The continuing transparent hypocrisy of financially self-interested “stakeholders,” their highly-paid lobbyists and the “association bar,” HB2441’s “one-size-fits-all,” would gag a maggot.

Anonymous said...

The way I see this is that if far too many states, "The Industry," has "contributed," to get exactly what they want, legal or not. Certain individuals, targeting the most innocent, nicest, vulnerable, rule following and law abiding for homelessness.
I was in an association before the industry crept in to another group on our property, without our boards knowledge. Let the nightmares, conflict, aggression, false charges, neighbor, pitted against neighbor and the infiltrated board turning into THE BOSS, A HIERARCHY, RULE BREAKING (CC&R's), NON ACCOUNTABLE,LYING THUGS...
What about the local governments that will allow anyone, in one of these groups (and their lying legal talent friends) to take your home? Contract, or not. Truthful, or not.
Nobody knows what they are doing to you and you (the victim) are advised, that " all this is stupid and it will be thrown out of court." "There is nothing to worry about, I will take care of all this." "No judge will allow something like this, they (the judge cannot ignore the law..."
"Don't talk to them, as their lies and slanderous comments mean nothing...." More and more and more...Well, then, no REAL court date, as not one who was supposed to show up did, not even the atty who started and created this mess. Missed appeal deadlines, like I was supposed to know there was one and the extortion call, "you have 24 hours to find an attorney a file a bankruptcy, or they are going to sell your home tomorrow at a sheriffs sale, for the fraudulent $17,000 + in liens (I HAD NO CLUE AND FOR WHAT)the conflict creating attorney, who could not even show up, was not our property manager, or anything, I (we) had no contract with for what the were alleging and what they were alleging never happened....AND THESE FORECLOSURES, IN PENNSYLVANIA, ARE ILLEGAL. ONLY, LIENS MAY BE APPLIED. HOW MANY WAYS, HOW MANY TIMES, DO PEOPLE HAVE TO BE TOLD WHAT FRAUDULENT FORECLOSURES ARE AND THAT THEY DO HAPPEN TO NORMAL, NICE, BILL PAYING, LAW ABIDING, CC&R FOLLOWING HOMEOWNERS?
This industry and the mess some of these groups (and their friends) make of innocent peoples lives is a detriment to health, family and financial stability and is criminal.
I know it is not everywhere, and some groups are better than others, but the victims deserve rectification. "Public Policy," can be argued all day long but, until the thieves, thugs and bullies, of this industry, are held accountable and put behind bars, no matter who they are, and/or who they know, and states offer NO PLACE FOR THE INNOCENT HOMEOWNER TO GO (no office to legitimately investigate, or intervene, etc.) NO ONE SHOULD TRY TO LIVE IN ONE OF THESE GROUPS! My experience and opinion!
I hope and pray the thieves, thugs, lying, home stealing criminal BULLIES, of Monroe County, Pennsylvania are the among the first to be held accountable for these horrific acts against innocent homeowners. I am sure there are deadbeats who don't pay bills but, in my experience, it is the perpetrators WHO ARE THE DEADBEATS, AND WANT TO BRING YOU TO THEIR LOW LEVEL OF LIFE, CRIMINALITY AND THIEVERY. Intentionally lying to judges, knowingly filing fabricated, false lawsuits, fabricated liens, etc..ISN'T THIS CRIMINAL? The true, very real victims of these fraudulent foreclosures deserve to be heard and rectified.
I can't wait to see what some others from this industry finally fess up to...Is it "mea culpa " month for some of the perpetrators in this industry?
Keep up the great work Dr. McKenzie and contributors....

Anonymous said...

I sent this article to a family member and I thought she had a really
good perspective. Smart woman, it appears.

"I think that Evan McKenzie's comment at the bottom hits the nail
on the head here. The lawyer's use of the word, "require," is quite a
subtle psychological move, since one would expect him to write,
"allow" (not "require"). Yet, by using the word, require, he hangs
himself and begs the question if it is not the municipalities
themselves which "require" HOAs which are the ones breaking the law
instead. And, if municipalities which impose such requirements may be
found in violation of law, well, then, "so long" to the unbridled
control over individual rights which are found in HOAs.

However, the observation which I make is so obvious that my comment almost is a, "Well, of course. So, why state the obvious?" The lawyer merely is shifting the brunt of the blame onto municipalities which "require" HOAs -- if the city "requires" them so as to make the city's job of running itself easier and less expensive, then these same local gov'ts may not turn around and then dictate to the HOA how to do its job. By looking at this situation this way, suddenly exactly what is being done to HOA residents (in the way of individual rights deprivation) is obscured, since cities will want to keep the HOAs up and running and happy in order to save themselves money and will begin arguing to keep their right to "require" HOAs. If it is established in this debate that local gov'ts may "require" HOAs, well, then, the HOAs will argue their "right" not to have these same cities examine how they run the HOAs -- sort of like, "You can't have your cake and eat it, too."
And, once the focus of the debate is shifted to the conflict of interest between the rights of local gov'ts and the rights of HOAs, the matter at hand of the HOA residents' own individual rights suddenly becomes a non-issue (instead of what is at the heart of the debate in the first place), or simply lost between the cracks, etc.

pvtgov said...

Holmgren, a CAI member in an all-CAI law firm speaks, of “why government is so rarely a friend to homeowners associations,” and “they [government] believe homeowners associations are an untoward restriction on individual freedom.”

The issue is one of power – the writer, following CAI policy, firmly believes that HOAs are indeed independent principalities not to be regulated as any other entity, especially as a private government. He plays to the simplistic dogma that the people can do anything they like, and regulation to protect one faction against the evils of another doesn’t apply to these principalities.

Anonymous said...

To the other Anonymous above,

I realize that you're angry about something -- a lot of us are, and I empathize -- but please stop (1) using rambling run-on paragraphs, (2) UPPER-CASE WHERE NOT APPROPRIATE, and (3) meandering rants.

Reading your posts literally (not figuratively) gives me a headache from eye-strain, and detracts from whatever point you're trying to make. Whenever I see something that looks like it was written by you, I just skip over it.