Homeowners Associations - The Perfect Storm of Corporate Cronyism and Legislative and Judicial Abuse of Constitutional Rights I continue to be fed information and horror stories from members of Homeowners Associations (HOAs) from across the country. I am astounded at how 20% of the population can be subjected to this private property management system that is supported by legislative schemes that are all-but drafted by the corporate owners of these associations, and a judiciary beholden to those interests that has lead to a national epidemic of abuse and corruption that is tearing apart the lives of thousands, but gets little or no coverage by the national media, or even local media, and nothing more than lip service in legislatures across the country. The question I keep getting is what can be done? The answer is both simple in its identification of the solution, but a bit more complex in how to achieve it. One simple solution is to just ban them. This property ownership and management system, under the guise of freedom of contract takes all government accountability out of the equation, and leaves millions of Americans subjected to the whims of appointed boards with sweeping powers to fine and sanction homeowners, and foreclose on homes for violations of HOA rules without adequate judicial oversight, and in accordance with full due process protections. It turns law enforcement power over to these private corporate boards, and allows citizens to lose their family homes in matters as miniscule as a few hundred dollars in as unpaid assessments or fees with no real due process protections. It turns the core functions of municipal government over to private corporations, with no power of the vote and no public accountability - it is, in essence, a form of corporate autocracy, and that has no place at all in a country that was formed as a constitutional republic. banning altogether may well be an appropriate remedy. As I have said, however, I am somewhat new to the issue - it has all been revealed to me over the past couple months of my campaign - and I have not been fully versed in the alleged benefits of these HOAS, and, having heard and learned most of what I have from those being injured by the abuses, would need to listen to the opposing views from the proponents of this system, and the laws that support them. I know enough to know, however, that this system is in need of some serious attention, and serious reform, and it is a national problem that would be an appropriate field in which the U.S. Congress would have constitutional power and authority to act. If we do credit the argument that this all falls under the rubric of freedom of contract, there are still some shortcomings that need to be addressed. The United States Supreme Court has held, in the case of Overmyer v, Frick, 405 U.S. 174 (1972) that a cognovit note provision in a contract, i.e., a provision that effectively waives certain key constitutional rights, must be separately negotiated, and supported by separate adequate consideration before it will be enforceable in a court of law. One common complaint I have heard of is that these HOA contracts are contracts of adhesion, i.e., they are take-it-or-leave-it with key provisions tucked away in obscure small print legalese drafted by the HOA lawyers, and not subject to negotiation or modification. These provisions are then being used to hold the homeowners to the waiver of their constitutional rights. This entire system of contracting appears to violate the principles of Overmyer v. Frick. At the very least, then, these contracts would be subject to challenge on those grounds, and this could be done across the country. Principles of freedom of contract must be recognized, as we do not want or need government interference in all of our affairs, and must recognize peoples ability to manage all of their affairs without excessive government intrusion, but these homeowners, often focused on raising families and building their lives in peace and comfort, and not focused on legalese and boilerplate contracts, must be sure to have known the rights that they are giving up. If it is an honest system, and the CAI and HOA organizations truly have the best interest of the homeowners at heart, and are not just trade groups serving the big corporate and banking interests, the simple assurance, through full and complete disclosure, and arms-length negotiation, that people are not giving away their constitutional rights for nothing is something that we should, as a society, expect at a minimum. This all assumes that there will be fair judiciaries to adjudicate these claims, which is another problem altogether, and does not address the issues such as double taxation, and the fact that the local governments are often complicit in the abuses by the HOAs, but there are some basic measure in the system as it exists, that should be addressed in accordance with principles well-established in our legal tradition. The above is one of them. There is, of course, much more that needs to be learned, and discussed, but I was asked for some thoughts on possible solutions, and these are some. I will be appearing on the On the Commons radio show with Shu Bartholomew on October 21, 2104, to be aired on Saturday, October 25, 2014, where we will be discussing these, and other, issues, that are affecting homeowners all across the country, including Pennsylvanias Eleventh Congressional District.
Posted on: Tue, 21 Oct 2014 02:43:22 +0000
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