Comparing Homeowners’ Associations to Local Government: Division of Power and Due Process

By Deborah Goonan

This blog series – Are Homeowner and Condo Associations “Mini-Governments?”– will compare the typical governance structure of HOAs (using the term generically) to our local governments, as guided by the principles of our Constitutional Republic.

Part 3. Key differences between Homeowners’ or Condo Associations and Local Governments in America: No Division of Power, Due Process

  1. HOAs lack division of powers and due process.

Remember back in grade school, when you learned about American government? Here’s a brief refresher:

“Division of Powers” refers to the 3 branches of American government:(1)

  • Legislative – the people who make laws, rules, or ordinances
  • Executive – the people who approve or veto new laws, and who ensure that current laws are enforced consistently
  • Judicial – the people who listen carefully to both the accused and the accuser, and apply the law through their “judgment” about whether or not someone is at fault, and what penalty, if any, is warranted

Each branch of government has the power to undo certain acts of the other branches. For instance, the President (Executive) can veto laws passed by Congress (Legislative). The Supreme Court (Judicial) can declare laws passed by Congress (Legislative) as unconstitutional. Congress (Legislative) can reject the President’s (Executive) appointments to the Supreme Court (Judicial).

 

So how does it work in an HOA? Simply put, there is no division of power in an HOA. Nearly all of the power is held by the HOA Board of Directors.

The Board of an HOA serves as all three branches of governance simultaneously:

  • Legislative – the Board has the power to make Rules to add detail and clarity to the CC&Rs
  • Executive – the Board has the power to enforce CC&Rs that have been created by the Developer
  • Judicial – the Board appoints a committee to conduct hearings for violations of CC&Rs or rules, appoints the architectural standards committee, hears appeals from both committees, and decides upon penalties for non-compliance

Furthermore, there are no checks and balances, since the three powers are not separated.

 

“Due Process” refers to every American’s right, if accused of wrongdoing, to a fair trial, or a right to present his or her side of the story to a neutral third party.

According to US Constitution Online: (2)

“Generally, due process guarantees the following (this list is not exhaustive):

  • Right to a fair and public trial conducted in a competent manner
  • Right to be present at the trial
  • Right to an impartial jury
  • Right to be heard in one’s own defense
  • Laws must be written so that a reasonable person can understand what is criminal behavior
  • Taxes may only be taken for public purposes
  • Property may be taken by the government only for public purposes
  • Owners of taken property must be fairly compensated”

An HOA does not conduct its hearings in public. A Board-appointed committee can hardly be considered an impartial third party. CC&Rs and rules are commonly written in a vague or confusing manner, and subject to misinterpretation. Quite commonly, the HOA Attorney is called upon to interpret the written documents.

An Association is vulnerable to hostile corporate takeover and even forced termination without just compensation. For example, in Florida, real estate investors have purchased condominiums in bulk, taken control of Association Boards, and forced termination of the condominium and conversion to rental properties. Tens of thousands of owners have been forced to sell their units at considerable financial loss.(3),(4)

 

1 US Federal Government @ USA.gov, Government Made Easy: How the US Government is Organized

http://www.usa.gov/Agencies/federal.shtml

 

2 US Constitution Online, Constitutional Topic: Due Process

http://www.usconstitution.net/consttop_duep.html

 

3 Pinellas condo owners fight investors over takeover, News Channel 8 WFLA.com, Sept 16, 2014

http://www.wfla.com/story/25133567/condo-owners-fight-investors-over-takeover

 

4 Story Behind Florida’s Epidemic of Hostile Condo Takeovers, neighborsatwar.com Blog, Sept 14, 2014

http://neighborsatwar.com/2014/09/story-behind-floridas-epidemic-hostile-condo-takeovers/

 

Next: Part 4, HOA rules are more restrictive than local government

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