Who says Constitutional rights cannot apply in private HOAs?

By Deborah Goonan, Independent American Communities

Extending Equal Protection of Constitutional rights in HOA-governed communities won’t suddenly ‘legitimize’ private HOA governing bodies as the equivalent of public government.

Last week, I was a guest on On the Commons radio podcast with Shu Bartholomew of Virginia. The topic of discussion was proposed legislation in Arizona and Florida.

Arizona’s SB 1412 asserts First Amendment right of residents in HOA-governed communities.

More generally, Florida’s HB 623 offers Equal Protection of all Constitutional rights under the 14th Amendment.

As you might imagine, Florida’s HB 623 is causing a bit of a stir. Its Equal Protection provision under the Homeowners Association Act is shown below, as underlined text.

The exact same language is proposed for Florida’s condominium and cooperative association acts.

FL HB 623 equal protection 14th Amendment Constitution

Most IAC readers have expressed enthusiastic support for HB 623, and they would love to see similar legislation enacted in their own states.

However, a handful of readers who follow IAC express some doubts about legislating Equal Protection of Constitutional rights for all Americans, no matter where they happen to reside or own property.

For example, see this ‘anonymous’ comment posted at On the Commons:

While it’s good to see some movement in this area, I think the whole idea of “let’s subject HOAs to the constitution” is ultimately misguided and counter-productive.

Instead of legitimizing these private entities as another layer of government – and therefor legitimizing their exercise of governmental powers – I believe efforts should instead be made toward neutering the power of HOA corporations.

The ‘anonymous’ comment also references an important 2008 Law Journal article written by Edward R. Hannaman, Esq. of New Jersey: Rutgers Journal of Law & Public Policy.

The paper highlights common pervasive HOA problems, and provides several proposed solutions to undemocratic HOA governance. Unfortunately, most of these suggested solutions have not been addressed in New Jersey or any other state in the nation.

Here are two brilliant insights from Hannaman.

Source: Rutgers Journal of Law & Public Policy, VOLUME 5, Issue 4, Spring 2008 (Click image to enlarge)

You’ll notice that legal experts have recognized the HOA as an unworkable governance model for decades. Hannaman even compares the HOA’s ‘central control‘ and developer-centric governance model to communism!

You’ll also note that Hannaman called for reining in the power of HOAs, to make them more accountable to the people they govern.

In this context, SB 623 is not exactly radical.

Now, please allow me to respond to these ‘anonymous’ comments.

Focus on the property covenants and restrictions, not the HOA

A careful reading of HB 623 reveals that the primary focus of the Equal Protection provision is the Covenants and Restrictions  — the declaration.

HB 623 also references association bylaws, or reasonable rules and regulations of the association which will diminish or infringe upon any right under the Fourteenth Amendment to the United States Constitution or s. 2 Article 1 of the State Constitution…” 

As explained previously here on IAC, a declaration of Covenants, Conditions, and Restrictions (CC&Rs) can and sometimes does exist in the absence of an HOA governing body to enforce land restrictions.

For example, I have personally owned two deed-restricted homes in the state of Pennsylvania, but neither neighborhood was ever governed by a homeowners’ association.

And I am also familiar with at least one large Community Development District in Florida that enforces CC&Rs, because no HOA was ever formed to fulfill that duty in the community.

The fact is, Covenants and Restrictions that “run with the land” have existed for more than a century, long before HOAs became common across the U.S. Since their inception, any neighbor has had the right to enforce the terms of CC&Rs in court.

No HOA necessary.

Invalidation of unconstitutional CC&Rs is the next phase of Civil Rights in the U.S.

In its current draft, HB 623 amends HOA, condo, and co-op statutes. But, it appears the legislative intent is to invalidate unconstitutional CC&Rs themselves.

Indeed, the true nature of Equal Protection in the U.S. is reflected in our Constitutional Civil Rights Acts.

These federal acts and related state laws invalidate property restrictions and local laws that discriminate or disenfranchise Americans on the basis of race, religious faith, gender, familial status, or disability.

Scroll down in the window below for a summary of U.S. Civil Rights laws.

Therefore, in my opinion, HB 623, to be most effective, must clearly prohibit anyone or any governing entity, public or private, from enforcing unconstitutional provisions of declarations or CC&Rs.

That would include not just mandatory membership homeowners, condominium, and cooperative associations, but also voluntary membership HOAs, neighborhood associations, government entities such as development districts (CDDs), and individual property owners.

Realize that most people, the HOA-industry included, tend to conflate property restrictions with HOA governing entities.

That can lead to confusion and misunderstandings.

The Three Layers of planned communities

To clear up public confusion between property restrictions and governance entities, it may be helpful to think of today’s communities as consisting of up to three layers.

Layer #1.

The physical aspect of the common interest community, which, by definition, includes at least one portion of property that is either owned or maintained in common. In industry jargon, this is the “built environment.”

The “commons” could include shared infrastructure of a multifamily building, private roads and amenities of a master planned community, or, as is the case for the majority of small common interest communities, a single storm water ditch or pond, plus an entry monument.

Layer #2.

The restrictive covenants (CC&Rs) that are imposed upon individual property owners, and that “run with the land.” The meaning of this legal jargon is that these rules pass on to each new owner when the property is sold, or until such time that they officially expire or are dissolved by a supermajority vote of affected homeowners.

It is this invisible layer of communities that is considered to be a mutual contract, agreed upon by owners and residents. CC&Rs or Declarations are also often the source of restrictions imposed by landowners and developers upon private property rights and individual liberties.

Currently, although CC&R provisions may be in violation of U.S. and state Constitutions, proponents in favor of deed restricted property argue that the Constitution grants individuals the right to waive certain rights and freedoms by mutual contract.

This, in a nutshell, is the HOA-industry legal argument that has been used for nearly a century.

But note that the Fair Housing Acts of 1968 and 1988 have imposed limitations upon enforceability of certain CC&Rs restricting ownership by protected classes.

It should also be noted (again) that CC&Rs, commonly referred to as the “rules” of the community, can and do sometimes exist without the establishment of a governing body (HOA) to enforce those rules.

When that is the case, individual property owners have the right to enforce CC&Rs against any of their neighbors by legal action through local civil courts. Essentially, disagreements over compliance with restrictive covenants are contractual disputes.

Layer #3.

The governance body of common interest communities, which often includes private entities such as homeowners’, condominium, or cooperative associations (collectively referred to as “HOAs”), but may also include public entities such as Special Tax districts or Development Districts.

IAC firmly believes that, to be most effective, Equal Protection legislation must focus on Civil Rights at Layer#2, the underlying property covenants and restrictions (CC&Rs) that “run with the land.”

Does HB 623 seek to ‘legitimize’ HOAs as another layer of government?

Not really.

The legislative proposal merely states that private HOA-governing entities cannot enforce unconstitutional restrictions, nor can the board of an HOA enact rules and regulations (derived from CC&Rs) that violate constitutional rights of residents.

This is really no different than subjecting housing providers, including private landlords, university housing, or HOAs, to Fair Housing Acts.

The fact that HOAs must comply with Fair Housing Acts does not magically transform HOAs from private governing bodies to public governing entities.

Neither would enacting SB 623 transform HOA private organizations or corporations into officially chartered units of public government.

What SB 623 would do is end the HOA-industry attorneys’ argument that, as private organizations, HOA’s are not subject to constitutional constraints on their power.

That’s an important step in the right direct. But, I have no illusions.

I realize that simply declaring Equal Protection of resident rights, by itself, won’t solve pervasive problems of HOA abuse.

That’s why I also believe that, in order to finally resolve pervasive HOA problems, government leaders and concerned advocates must attack the issues on multiple fronts.

Limiting the powers of HOAs

Let’s face it. HOAs regularly ignore state and federal housing laws, and sometimes openly violate them. That’s obvious from numerous examples of HOAs violating Fair Housing Acts, as documented here on IAC.

Residents and owners need practical ways to assert and enforce their rights as both constituents and housing consumers.

Clearly, the balance of power in HOA-governed and common interest communities needs to shift back in favor of the individual vs. favoring developer or collective property rights.

To that end, I direct readers to another flagship IAC post, one that suggests several practical remedies to rein in HOA abuse of power. ♦

What can be done about HOA problems and dysfunction?

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