HUD lawsuit: Bay View HOA accused of violation Fair Housing Act – again

By Deborah Goonan, Independent American Communities

Bay View, a seasonal community near Petoskey, Michigan, is in the news again for its alleged religious discrimination policy.

In July 2017, members of the Bay View Chautauqua Inclusiveness Group sued Bay View Association, claiming the HOA limited ownership of cottages to members of the “Christian persuasion.”

A Judge has already heard arguments, and the parties to the lawsuit await the court’s decision.

In August of 2018, board members of Bay View amended their policy requiring that its members be active participants of a Christian Church.

The new official membership requirement states that members “agree to respect the principles of the United Methodist Church” and “support the Bay View association mission.”

However, several membership applicants in Bay View Association have filed a new federal HUD lawsuit, alleging religious discrimination.

According to an AP report, the complaint states that Bay View Association not only denied membership, but also prevented current members from passing ownership of their cottages to non-Christian buyers or family members.

The second lawsuit also claims that members of the Chautauqua Inclusiveness Group have been harassed and threatened with lawsuits.

Bay View Association denies those claims.


Bay View Association’s response

In a statement provided to the News-Review, Bay View Association says that asking members to respect the Methodist Church does not constitute religious discrimination. The Association says that the Inclusiveness Group approved of its August 2018 amendment, and that the changes were made to the membership policy with the understanding that it would end litigation.

Instead, the Plaintiffs filed a second lawsuit and formal HUD complaint, claiming that, despite Bay View’s new policy, discriminatory behavior continues. The lawsuit claims that Bay View Association clearly favors Christian members over non-Christian members.


History of Bay View

Bay View is a 447-home community, which was established in 1875. It began life in the late 19th century as a Methodist summer camp and Chautauqua, a live entertainment venue that was popular prior to the rise of the motion picture industry.

Bay View is one of the few remaining Chautauqua venues in the U.S., and is listed on the National Register of Historic Places.

During the Victorian era, property owners built cottages upon former camp sites, upon leasehold land. Many of the homes have been passed down to family members over 5 generations.

Today the community of Bay View is an incorporated town on the shores of Lake Michigan. It serves as a vacation resort, with some owners renting their homes to visitors or family members during the summer months.

When Bay View was incorporated as resort town in 1889, the State of Michigan granted considerable governing authority to Bay View Association, currently led by a 10-member board of trustees.


Plaintiffs say that Bay View is a governmental entity, or at least a state actor

Although Bay View has religious roots in the Methodist Church, it is not classified as a religious community. When the town was incorporated in 1889, it was granted government powers under state law.

According to details provided in the 2017 lawsuit, Bay View must maintain its private roads, storm drainage, private water supply, and its own docks for lake access.

In addition, police powers of the Association include the rights to assess and tax private property, to enforce restrictions and provisions of the Bylaws, to hire a Marshall to enforce traffic laws and rules against various public nuisances, and the power to impose fines or up to 30-days imprisonment at the County jail upon violators of Bay View Association Bylaws.

Therefore, Plaintiffs in both lawsuits allege that Bay View has violated First Amendment and civil rights of members and prospective members.


Parallels to modern HOAs

Both lawsuits and the HUD complaint against Bay View bring up important Constitutional and civil rights issues for private association-governed communities.

Although government powers were officially delegated to Bay View before the start of the 20th century, its Association wields strikingly similar authority to the modern mandatory membership homeowners association.

Unlike Bay View Associations, state Legislatures have chosen to delegate government powers to HOAs by statute rather than by executive order.

Nevertheless, since the 1990s, HOAs have been bestowed with the statutory authority to impose monetary penalties (fines), and to place and foreclose liens for unpaid assessment and fees against property owned in the association.

Homeowners, condominium, and cooperative association boards have long been granted relatively unchecked, home rule style power to enact new rules, and enforce their governing documents.

More recently, some HOAs are issuing tickets for traffic violations in their communities, or ticketing vehicles parked on public streets.

All of a modern HOA’s typical ‘police powers’ are normally reserved for government entities, and not made available to business corporations.Yet HOAs routinely violate the Constitutional rights of residents.

Private vs. public argument wearing thin

Unbelievably, some industry trade group attorneys insist that HOAs are purely “private” organizations, and, therefore, need not be constrained by Constitutional principles to the same extent as official governing bodies.

In short, HOAs hold the power of government, yet, as private organizations and corporations, almost none of the accountability.

Each day, more Americans discover that their HOA remains mostly free from Constitutional constraints. Plus, thanks to lenient state laws, an HOA board does not have to adhere to the same strict open government, conflict of interest, and fiscal accountability measures of government leaders.

So it’s not surprising that HOA abuse of power seems to be the norm.

And, in the face of abuse, some courageous Americans are pushing back.


Institutional changes are underway

Recent judicial rulings on First Amendment and due process rights of residents in association-governed communities show a clear trend toward acknowledgement that HOAs are quasi-governments or state actors.

Due to increasing objections from a number of HOA residents nationwide, it’s becoming more and more difficult for the community association industry to claim that HOAs are nothing more than private corporations, to which Constitutional constraints need not apply.

Americans just aren’t buying it.

The outcomes of both Fair Housing lawsuits against Bay View Association could further influence future court rulings and possibly even lead to civil rights legislative reform.

At the very least, national coverage of Bay View’s disputes over religious discrimination claims draw public awareness to the critical importance of setting strict limits on the authority of community associations. ♦



Feds allege Bay View Association violated Fair Housing Act
Jillian Fellows, News-Review
Feb 28, 2019

A closer look at the new Bay View lawsuit
William T. Perkins, News-Review
Apr 24, 2019

New lawsuit targets faith-based policy at Michigan resort 
Associated Press, April 22, 2019

First Amendment, Fair Housing, & Civil Rights: Can MI HOA discriminate on basis of religious affiliation?
IAC, Posted on February 12, 2018 by deborahgoonan

MI: Bay View Association members vote to revoke rule requiring owners to be Christians
IAC, Posted on August 10, 2018 by deborahgoonan




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