Monday, July 02, 2012

"Occupy" your own home: A victory for free speech in New Jersey |

"Occupy" your own home: A victory for free speech in New Jersey |
"Of the 314,000 such communities in the United States, the overwhelming majority have restrictive covenants in their master deeds that sharply limit the free speech rights of residents in ways which no public government could. For example, unless you live in California, which has a state statute providing otherwise, you are almost certainly prohibited from placing a political sign in the window of your home, just as were the citizens of Ladue until the Supreme Court ruled otherwise.
Now, the New Jersey Supreme Court has stepped in to provide some relief, at least for residents of this state — and maybe offer the road to reform in other states, as well.
In a case involving the Mazdabrook Commons community in Parsippany, the state’s high court ruled that such a prohibition on political signs in a homeowner’s window violated the state constitution."
This is a great op-ed by Frank Askin of Rutgers Law School, who successfully challenged the actions of Mazdabrook Commons before the New Jersey Supreme Court.


The Right To Own Your Home said...

Those who believe this court ruling will actually change anything should watch the Community Environmental Legal Defense Fund's "Democracy School On-Line" videos

Democracy School On-Line - Part I
Democracy School On-Line - Part II
Democracy School On-Line - Part III
Democracy School On-Line - Part IV
Democracy School On-Line - Part V
Democracy School On-Line - Part VI
Democracy School On-Line - Part VII
Democracy School On-Line - Part VIII

Each video is about 1/2 hour long, so the total length is about 4 hours. But there are important lessons in it for homeowner-rights activists that make this worth your time.

The C.E.L.D.F. lawyers talk about how even though they were winning cases in court, and receiving awards from liberal groups for winning their court cases, nothing was really being changed "on the ground". The corporations they were litigating against, whether it was big-box stores, factory farms, or oil and gas companies, would simply fix whatever technicality they had violated and resume their activities.

Expect the H.O.A. industry to do the same -- i.e., re-write the some-document-called-a-contract so that the waiver of free-speech rights meets some legal requirement, or lobby for some legislation that nullifies the court's ruling. But they may not even have to do that.

Unless I'm missing something, the court's ruling in Mazdabrook Commons HOA v Kahn does nothing to remove the perverse incentives and moral hazards that exist within the structure of H.O.A. corporations.

The H.O.A.s attorneys and property managers will still profit from strife and conflict, and will therefor still encourage it. Thus, it will still be in their interest to advise the corporate board to fine homeowners who exercise their new-found free-speech rights as they had before the ruling.

[ continued below ]

The Right To Own Your Home said...

[ continued from above ]

The burden of enforcing those rights will still fall upon the individual homeowner. As Professor McKenzie told Shu Bartholomew two years ago:

It's like something you would see in Nazi Germany or Soviet Russia. People think these things don't go on. But we know they go on every day in condo and homeowners associations. These people who have no idea how to use power at all. They won't even accept limits on their power. They don't even know what the law requires of them, these directors. They go by what some lawyer tells them to do, which the lawyer tells them to do only because he or she knows they can get away with it. Because the only recourse you have is some civil suit. Here in Illinois, we don't have an Ombudsman. Most states don't. There's nowhere for owners to turn. If the lawyer tells them "Oh, just jack 'em around. Who cares what the rules are? Who cares what the law says?" it doesn't make any difference. The transaction costs of enforcing an owner's rights are so great that they are hardly ever able to do it.


As H.O.A. attorney Tyler Berding wrote on his blog three-months ago, "there are statutes galore, but no one in authority to enforce them--and no state agency likely to arrive any time soon."

It is up to the individual homeowners to do so. Should a homeowner decide to challenge an H.O.A. corporation that continues to insist on restricting the homeowner's new-found free-speech rights, the homeowner will still be responsible for his own legal costs up-front, and continue to pay the H.O.A. corporation's legal costs via his assessments (a.k.a. "H.O.A. dues"). This is in addition to the emotional and psychological toll, and lost time and opportunity-costs, incurred by an individual engaging in litigation against the H.O.A. corporation (or any corporation, which does not suffer these things).

Assuming that an individual homeowner takes a case all the way to trial and prevails

(1) the H.O.A. attorneys and property management company will still be paid; hence the profit-motive ensures that they will advise their clients -- the H.O.A. corporate board of directors -- to litigate even frivolous cases

(2) since homeowners are personally responsible for the debts and liabilities of the H.O.A. corporation, the prevailing homeowner will still be responsible for paying the judgement and H.O.A. corporation's legal costs via his assessments (a.k.a. "H.O.A. dues"). As Tyler Berding said on this site four months ago:

While suing his HOA might make the owner feel empowered, in reality he's basically suing himself and the effort would accomplish nothing except to alienate his neighbors. And forget about something like this teaching the board a lesson or some other similar sentiment--given enough of this sort of thing there won't be any boards--only Receivers.

Until something is done about the perverse-incentives and moral-hazards built into the H.O.A. system, no amount of regulation, legislation, or court-rulings will change the reality on the ground.

Anonymous said...

That is a spot on observation.
I am suing my HOA in Massachusetts and among other things, attempting to get the court to declare their power to fine unconstitutional.
I actually used part of the Prof. McKenzie's above quote in my brief (not about the Nazi's....the unwritten rule there is 'anyone who invokes the Nazi's automatically loses the argument!)
But about homeowners hesitating to assert their rights.
What I asked of the court is to take judicial notice of is this: Private deed restrictions come to court "cloaked in a strong presumption of validity"....I ask the court to never extend this presumption to HOAs, “whose intrinsic natures merit the opposite treatment.”
My HOA has been so aberrant in their conduct that the court just may decide to take some notice of what homeowners are faced with they attempt to bring them to justice. HOAs can and do ignore the law, their own governing documents, and fundamental principles of democracy, and I believe this to be universal in this aberrant system of private governance....and homeowners are faced with an arduous and expensive task of doing anything about it.
Cooler heads have counseled me to just take my lumps and knuckle under to this system…but I am one of those “disgruntled homeowners” who will never willingly do this.
So I wait with baited breath the outcome of my lawsuit. If you Google Mass Appeals Court and search docket number 2012-P-0505 you can entertain yourself and watch my progress!
Regards and very nice comment!