Huffington Post article on HOAs is somewhat misleading

By Deborah Goonan, Independent American Communities

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I am truly grateful that coverage of issues surrounding homeowners’, condominium, and cooperative associations is going more mainstream. For example, Judy L. Thomas of the Kansas City Star has recently published an entire series of articles detailing not only HOA horror stories, but also many major legal, economic, and political issues that lead to conflict and distress in private communities. (See HOAs from Hell)

However, I have recently read several articles from other sources on the subject. Unfortunately, they contain quite a few untrue statements and only serve to perpetuate myths and misconceptions about the true nature of the HOA Beast.

One of those recent articles was published in the Huffington Post blog, written by Mirah Riben, who describes her work as follows:

Researching, writing & speaking about the adoption industry since 1979. Author of THE STORK MARKET: America’s Multi-Billion Dollar Unregulated Adoption Industry

Her blog is entitled Buyer Beware! HOA’s Deny Your First Amendment Rights. It contains a lot of relevant criticisms of HOAs, including the fact that residents often do not receive full disclosure of the rights they must sacrifice when they purchase or lease in a common interest community with Association Governance. And Riben is correct in her conclusion that, with regard to homeowners engaging in a lawsuit to defend their rights:

HOAs count on the fact that homeowners, individually or even in groups, will avoid the expense and the aggravation and simply shut up and “behave” or move.

 

But, as someone who has spent years researching the facts and studying the complex range of issues affecting residents of HOAs, I was able to pick up on several misleading statements in Riben’s blog.

So today I will set the record straight on 4 misleading statements, and provide readers with a more complete picture of case law surrounding First Amendment rights for residents of Association Governed Housing.

 

Misleading statement #1:

All (HOA) communities are corporations run by a manager or management company that hire contractors to provide the services and maintenance.

The truth:

According to Community Associations Institute (CAI), roughly 30-40% of HOAs are not professionally managed, but self-managed, mainly because they are very small in size and cannot justify the necessity or expense of hiring a manager.

 

Misleading statement #2:

The gatekeepers between HOA residents and management are the Board of Trustees (BOT). These are unpaid, volunteer residents, who are elected by the homeowners to oversee the finances and the management of the community.

The truth:

Again, many HOAs do not hire a manager, and therefore, there are no “gatekeepers,” so to speak. In reality, the buck stops with the HOA Board, as it is the Board that has a fiduciary duty to HOA residents. The Board merely hires or contracts with a manager for services and administrative support. The manager should not be running the show!

Also, in communities that are still under construction, the Developer appoints the Board members, and therefore controls the HOA, rather than volunteer homeowners. Developer control lasts for several years at best, but can last for decades in large scale communities constructed in many phases.

Homeowners do not elect all of the Board members until nearly all of the homes, condos, or vacant parcels are conveyed by sale to non-affiliated property owners. A rather complex legal Transition from Developer to homeowners occurs at that time, and the process is incremental. Some developers have been known to hold onto vacant parcels or to retain condo units as rental properties for many years, in order to maintain one or more seats on the Board, creating at least some level of de facto Developer control.

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Misleading statement #3:

HOA communities have By-Laws (often set in place by the builder/contractor who created the corporation), covenants, conditions and restrictions (CC&Rs) that give all decision-making power to the (BOT), who can make and change any rule they chose without the consent of the residents because they were elected to do so.

The truth:

Although an HOA Board has relatively broad rule-making authority, the Board cannot create “any rule they choose.” Rules must flow from the authorities provided in the CC&Rs. If the CC&Rs specifically state that the HOA Board may create rules regarding Architectural Standards for new construction and home improvements, then the Board can, for example, dictate what type of roofing or siding material can and cannot be used.

Typically, CC&Rs include provisions that give the Board broad authority to enact rules to aid in management of the appearance of private property (via Architectural Control Standards) and to create restrictions upon the use of common areas.

However, HOAs cannot create rules out of thin air, unrelated to the provisions of their CC&Rs. For example, many Association Boards are now attempting to restrict an owner’s ability to rent their home or condo by creating a rule. However, homeowners are challenging those rules because, in many cases, the CC&Rs do not give authority to the Board to create use restrictions on private property. The correct way to enact rental restrictions would be to amend the CC&Rs, and that typically requires a super majority vote of approval from ALL members (property owners) in the Association. HOA Boards often try to avoid this difficult and contentious process by enacting rules, but, when legally challenged, those rules can be deemed unenforceable.

 

Misleading statement #4:

If HOA boards can make any rule they want, even if it violates state or other laws, where does it end? Could they make a rule that people of certain races are not permitted to swim in the swimming pool….or that women cannot vote in BOT elections??? The answer is that they COULD.

While most communities likely would not for fear it would decrease desirability and thus property value, they certainly could, and have done so. A community in Lakewood NJ in which a majority of homeowners are Orthodox Jews, for instance, set rules for their swimming pool based on religious law. No legal challenge has resulted from fines levied for breaking the rules.

The truth:

It is simply not true that HOAs can get away with racial or gender exclusion from housing and related amenities, nor can an HOA prevent protected classes from voting in Board elections. State and federal Fair Housing Laws and Civil Rights laws prohibit such blatant discrimination.

HUD has sanctioned many HOAs for discrimination against protected classes, as well as failure to accommodate individuals with disabilities.

The example cited in New Jersey represents a “gray area” is because non-Orthodox Jews are not entirely prohibited from using the pool – the condo Board instead enacted a revised swim schedule that dictates when non-Orthodox residents can swim in the pool with the opposite sex. These private-entity restrictions are questionable and many would say, offensive. However, we cannot draw the conclusion that HOAs can simply discriminate without any viable legal challenge.

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Additional facts regarding First Amendment rights in HOAs

While the author of the Huffington Post article cites the Twin Rivers case in New Jersey, she fails to cite two more recent cases in the same state: Mazdabrook Commons Homeowners’ Assn. v. Khan and Dublirer v. 2000 Linwood Avenue Owners, Inc.

In fact, the Supreme Court of New Jersey has since found twice in favor of owners, and ruled that their Association’s restrictions violated First Amendment rights and were therefore unconstitutional.

See the following references for a more complete understanding of where the courts stand on the issue of Constitutional rights of residents in Association Governed Housing in common interest communities.

New Jersey Supreme Court Rules Homeowners’ Association’s Sign Restriction on the Interior of a Unit Is Unconstitutional

State Court Docket Watch Summer 2012
By Jaime K. Fraser (August 27, 2012)

New Jersey Supreme Court Rules Homeowners’ Association’s Sign Restriction on the Interior of a Unit Is Unconstitutional

 

On June 13, 2012, the Supreme Court of New Jersey affirmed the appellate division’s ruling and found that the sign restrictions adopted by Mazdabrook Commons Homeowners’ Association (“Association”) violate the free speech clause of the state constitution.1 In Mazdabrook Commons Homeowners’ Ass’n v. Khan2 (“Mazdabrook”), the court held that a homeowner’s free-speech right to post political signs in his home outweighed the private property interest of a homeowners’ association. The court found the restriction at issue—which had amounted to a near-complete ban on all residential signs—to be unreasonable and unconstitutional. However, the homeowners’ associations can still adopt reasonable time, place, and manner restrictions, providing adequate alternative means of communication.3

Read More: http://www.fed-soc.org/publications/detail/new-jersey-supreme-court-rules-homeowners-associations-sign-restriction-on-the-interior-of-a-unit-is-unconstitutional

 

Fort Lee co-op board violated resident’s political free-speech rights in leafletting case, NJ Supreme Court rules

Jerry DeMarco (Dec. 30, 2014)

YOU READ IT HERE FIRST: The board of directors of a Fort Lee co-op violated the political-speech rights of a resident running for election to the board when it prohibited him from distributing leaflets about his candidacy, the New Jersey Supreme Court unanimously ruled today.

Robert Dublirer was trying to deliver a message that was “akin to and should be treated as political speech, which is entitled to the highest level of protection in our society,” the high court found.

“Dublirer’s right to free speech [under the state Constitution] outweighs the Board’s concerns about the use of the apartment building,” the justices wrote.

Read more: http://hackensack.dailyvoice.com/police-fire/fort-lee-co-op-board-violated-residents-political-free-speech-rights-in-leafletting-case-nj-supreme-court-rules/627995/

 

Conclusion

Although it can be argued that HOAs require an essentially non-disclosed “contractual agreement” to excessive restriction of residents’ rights – including their Civil Liberties and, yes, limitations on their Constitutional rights – those rights can and should be vigorously defended.

The bigger issues here are:

1) Unequal access to legal justice for homeowners and residents seeking to defend their rights in Association Governed Housing,

2) The fact that laws are skewed heavily in favor of corporate Association-Governed Housing entities, and

3) The fact that in an increasing number of housing markets in the US, housing consumers – whether looking to buy or lease a home – have very limited opportunities to avoid Association Governed Housing in common interest communities. Essentially, millions of housing consumers are forced by default into one of these housing schemes where they are expected to willingly accept unwanted restrictions upon their individual rights.

See also:

https://independentamericancommunities.com/2015/07/04/homeowners-associations-and-the-first-amendment-are-your-5-freedoms-guaranteed/

 

References:

CAI National Statistical Review (2015)

http://cairf.org/research/factbook/2015_statistical_review.pdf

 

Developer/Homeowner Transition: A Guide To Success

http://www.neighborhoodlink.com/article/Association/Developer_Homeowner_Transition

 

FAIR HOUSING GUIDANCE FOR CONDOMINIUM, COOPERATIVE AND HOMEOWNERS’ ASSOCIATIONS

http://www.nationalfairhousing.org/Portals/33/PSAs/brochures/Associations%20Brochure.PDF

HOA Governing Documents Explained

 


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