The Volokh Conspiracy » Our Amicus Brief on the Property Rights of Private Planned Communities
Thanks to "Right to Own" for this alert: The Volokh Conspiracy (a libertarian law professor blog) reports that The Cato Institute, a libertarian think tank, is getting involved in what could be a major USSC decision regarding HOAs. The Army Corps of Engineers destroyed 14 homes in order to conduct major repairs to an area damaged by Hurricane Katrina. They compensated the owners of the homes, but the HOA wanted compensation for the loss of assessment revenues. The Fifth Circuit Court of Appeals said that the loss of assessments revenue isn't the kind of loss that the Fifth Amendment Takings Clause ("nor shall private property be taken for public use without just compensation") requires compensation for. But the Cato Institute wants the USSC to overturn that decision:
"The Cato Institute recently filed an amicus brief urging the Supreme Court to hear Mariner’s Cove Townhomes Association v. United States , a case addressing an important issue involving the property rights of private planned communities. The brief was filed on behalf of Cato and several property scholars, including Richard Epstein (Chicago and NYU), James W. Ely (Vanderbilt), Donald Kochan (Chapman), my George Mason colleagues Adam Mossoff, and Alex Tabarrok, and myself. Here is the petition for certiorari written by University of Virginia law professor Daniel Ortiz and the UVA Supreme Court Lititgation Clinic"
[Ilya Shapiro of the Cato Institute summarizes the situation like this:]
"Mariner’s Cove Townhomes Association v. United States affects the rights of the more than 60 million Americans currently living in these associations. This case arises from the federal government’s taking 14 of 58 townhouses from one development in the wake of Hurricane Katrina. Mariner’s Cove owned a right to collect dues that was appended to those 14... homes, and sued the government for extinguishing that valuable right without just compensation under the Fifth Amendment’s Takings Clause. In contrast to most lower courts, however, the U.S. Court of Appeals for the Fifth Circuit held that “the right to collect assessments, or real covenants generally” are not subject to Takings Clause analysis. In other words, the government can take those rights without paying anything to the owners. Cato and a group of esteemed professors, including Richard Epstein, James W. Ely Jr., and Ilya Somin, has submitted an amicus brief supporting Mariner’s Cove and arguing that the Supreme Court should take the case to clarify whether community association fees are compensable property under the Fifth Amendment...Such associations often shoulder the burden of providing and maintaining infrastructure, services, and utilities, which allows for more diverse and customizable amenities for homeowners than if those decisions were left with remote municipal governments....
The perverse implications of the Fifth Circuit’s ruling are clear: it would allow.. local governments to require the creation of a community association, benefit from the resulting private delivery of services while collecting taxes from its members, and later take the property without even paying back the very fees that enabled the government’s benefit. "