Distinguished members of the CLRC:

Thank you for allowing me, an investor, to have input into proposed changes to common interest development (CID) law. I am a shareholder, of sorts. But the "share" I own, is my home — and the CID, being contemplated, is my neighborhood.

I. Housing Choice

I bought my home because of its location. My daughter, will attend California’s best high school — University High School — because I intentionally bought my home where the resident children go to that high school. All of the homes, in this area, are in CIDs with homeowners associations (HOAs). I am a member of an incorporated HOA, but it is no ordinary corporation.

A. Segregating the MLS

Homes in HOAs should be segregated in the MLS, because some homebuyers are merely seeking a home — but not necessarily one in an unaccountable, totalitarian regime, commonly associated with "horror stories." HOA homes are specialty products that are being unloaded on unsuspecting housing consumers and not ones that express a desire to purchase something different than a simple residence, to assume the risks of ownership, and to assume a complex bundle of rights and obligations.
http://www.consumersforhousingchoice.org/

B. Local Planning Mandates

"In some regions of the country, homebuyers have few other options. Gilbert, Ariz., a town of 107,000 southeast of Phoenix, is one. The fast-growing town has zoning laws that all but require new homes to be built in associations. And most homes in the Orlando area are being built in planned communities."
http://www.usnews.com/usnews/issue/001030/nycu/homeowners.htm

A woman from Arizona reported to me that in Glendale, Arizona, "the mandate is for HOAs in all new subdivisions WITH common areas. The catch is that ALL new subdivisions have common areas. All new subdivisions have at least 1 water–retention area to collect rainwater run–off." "This may be the only common area for the community. (For this, an HOA is mandated.)"

Ask the seven million people that live in CIDs in California if this is not what is happening here. Ask the people of south Orange County just how many homes are not in HOAs there.

II. Justice for home and condo owners/ Lack of Affordable Recourse

If you don’t have a six–figure bank account that you’re willing to gamble on trying to buy justice from superior or appellate courts, you can’t afford justice.

How much justice can you afford?

Plus, HOAs have much more money than the homeowners — and, as OJ proved — if you have enough money, you can get away with murder.
http://www.propertyrightsnc.com/CAI_Farce.htm

III. Horror Stories/ Abusive HOAs (a symptom)/ Neighborhood Cleansing/ Dissidence Suppression (Gulag)

Horror stories are closely associated with HOAs. When incorporated, these "fictitious" or "legal persons" are abusive to the real ones in HOAs. Yet the attorney general claims he doesn’t have the money to enforce the corporations code? How much money do y’all think the average homeowner has to enforce the law in the courts?

"Board confrontation usually ends in a power struggle..."
http://realtytimes.com/rtnews/rtcpages/20001018_hoasilverlining.htm

"Homeowners wish to just end the confrontation, whatever it may be, and just live in peace."
http://propertyrightstexas.com/HTMLarticles/toliveinpeace.htm

"‘Hobby Board members’ that have their own agendas, can cause the biggest problems for the majority of communities."
http://groups.yahoo.com/group/CAISLA/message/150

Why?

In many board confrontation cases, neighborhood cleansing http://propertyrightstexas.com/News/news3.htm is the result. In common interest developments, you find homeowners — whose board confrontation led to a power struggle — selling their homes and moving.

In Texas, "HVCA’s directors existing unaccountable, have acted intentionally and recklessly causing the Solcichs to move from the subdivision."
http://www.ahrc.com/HOAorg/Lawsuits/Steve_Tx1.html

Targeted homeowners are incurring thousands and thousands of dollars of transaction costs in selling their mini–fiefdom shares (their HOA homes) and moving, but — compared with the opportunity costs these people have forsaken, the transaction costs of moving pale in comparison.

Board members are "the ultimate untouchables" http://www.ahrc.com/HOAorg/Media/ma_Reg091200_Bob.html and have insufficient reason to ever stop harassing neighbors they don’t like. Neither HOAs, nor property managers, are regulated or accountable to any higher authority, save a prohibitively expensive court system — and that’s the way they like it.

The homeowners, don’t!

Consequently, "community associations still suffer from conflict."
http://www.caionline.org/news/detail.cfm?PRNumber=65111798
"Petty back–fence arguments can escalate into fines, liens and lawsuits. And frustrated homeowners — who didn’t realize ... are screaming for attention."
http://www.kiplinger.com/magazine/archives/2000/September/managing/hoa2.htm

And because of the way HOAs suppress innocent dissenters, homeowners are beginning to call them "gulags".

A. Civil, Constitutional, Human, and Property Rights Violations

1. Nonjudicial Foreclosure

Homebuyers are not informed that they are entering into contractual arrangements, when they buy homes in CIDs, and are signing away their rights to due process and equal protection. Homebuyers shouldn’t even have to do this!

Using homebuyers’ homes as collateral to assure the viability of a corporation run by amateurs is unreasonable.
http://loan.yahoo.com/m/ten.sm.html#over

B. Racketeer Influenced and Corrupt Organizations/ CAI/ HOAs/ State Actors

1. Treason

Legislators enacted the laws that are causing the trouble I’m describing. They allowed Caring Attitude Impostors to push laws — and kill homeowner–friendly legislation — and the legislators took money from them via the Consumer Attorneys of California. Legislators have failed to deal with the homeowner’s plight, even though they are aware of it, while Caring Attitude Impersonators grow rich off of loopholes that I believe were deliberately left in CID law. Ask Corrupt, Apathetic and Indifferent CAI lobbyist Skip Daum if enforcement of CID law should be taken out of the courts, where the lawyers make their money. Go ahead! Ask him!

Turning your back on 7 million serfs living in CIDs, and taking money for it, is treason.

2. Cliques, New Gangster In Town, and the Good Ol' Boys and Girls Network

http://fcam.tripod.com/articles/617HomeownersClicks.html
http://www.ahrc.com/HOAorg/News/keyreports/kr_gangster.html
http://groups.yahoo.com/group/prf/message/83

a) Collusion

Collusion is a problem. Less than one percent of an association can entrench itself and the HOA’s vendors, via collusion. Board tyrants with domineering personalities can almost always get their way. What volunteer would want to oppose one of these vindictive bullies? What makes it worth it? The board meets one a month, maybe — often with a property manager — so they all have an incentive to get along.

The system inspires collusion.

Cliques that form thusly don’t have the same incentive to get along with the other homeowners.

Sometimes, the collusion gets out of hand. Embezzlement is common in HOAs.

b) Organization as Client

I believe the California Rules of Professional Conduct – State Bar of California state, "In representing an organization, a member shall conform his or her representation to the concept that the client is the organization itself, acting through its highest authorized officer, employee, body, or constituent overseeing the particular engagement.

In other words the association supposed to be the client acting through the board of directors. This is fantasy! Vendors know what side the bread is buttered on and rogue multi–billion–dollar insurers back delinquent HOA cliques up.

You can’t tell an HOA property manager, lawyer, gardener, or pool man that the association is his or her client. The board picks the vendors, so — as far as the vendors are concerned — the board members are their clients. No one else.
http://groups.yahoo.com/group/hoanet/message/2212

3. Selective Enforcement of Governing Documents

"There is no vehicle, no avenue, no means of effective redress of grievances when it comes to a homeowner making legitimate claims that an HOA board has failed to conduct themselves as required by state law:

To act in good faith,
As a prudent person would in a similar situation."
http://starman.com/HOA/statement.htm

4. Targeting Homeowners

Homeowners are targeted with the multi–million dollar resources of HOAs, if they dare to question the operation of their HOA — or even question the inconsistent enforcement of the CC&Rs that can be used to harass them. Sometimes a homeowner is targeted just because a rogue board member doesn’t like the homeowner.

5. Self–dealing

Board members "work for nothing but get compensated in other ways."
http://loan.yahoo.com/m/ten.sm.html#compensated

6. "Frame and Blame"

"Frame and blame" is the board member’s motto.

These people are very gifted in smearing people to destroy them to protect their territory," claims Willowdean Vance, of the now–defunct American Homeowners Association. "They like their perks. The homeowner is just a little old lamb to be slaughtered."

Unaccountable homeowners association BODs and their vendors create victims that are in active opposition to this de facto government and Caring Attitude Impostors label them as "disgruntled malcontents" to discredit them and keep them from getting anything changed that might cost HOA vendors money.

"The industry has audaciously laid the blame at the feet of its very customers. ‘You should have read the documents;’ ‘You should have gotten more involved or tried to get on the board;’ etc. etc."

How arrogant to blame the victims! How callous.

7. Intentional Infliction of Emotional Distress/ Targeting "Disgruntled Troublemakers"/ Ruling by Fear/ Hostile Housing Environment

HOA cliques with criminal mentalities target homeowners that make trouble for them and intentionally inflict emotional distress on them. "Homeowners wish to just end the confrontation, whatever it may be, and just live in peace. There is fulfillment in being left alone no matter what’s the price. Conceding to gangster board whims is the way out. As it happens, these frequent circumstances build a totalitarian Gangster visibility throughout each community."
http://propertyrightstexas.com/HTMLarticles/toliveinpeace.htm

Sometimes BODs that rule by fear go overboard and actually create hostile housing environments for the "troublemakers".
http://www.leginfo.ca.gov/cgi-bin/displaycode?section=gov&group=12001-13000&file=12955-12956.1
http://www.leginfo.ca.gov/cgi-bin/displaycode?section=gov&group=12001-13000&file=12980-12989.3

IV. Reform vs. Abolition

A. Do we want to build common interest developments?

As Evan McKenzie notes in Privatopia, ‘the rise of CID housing is a unique, ad hoc form of privatization carrying with it significant social and policy considerations that never have been adequately considered by government or academics.’

We should be asking the legitimate public policy question of whether we should continue down the road of privatizing local government, or not!

B. Can CIDs be "fixed"?

Before we decide if we want to try to reform them, we must determine if they are fixable. Are you familiar with the expression, "Start with excrement? End with excrement."

1. Inherent, Systemic, Pathetic Flaws

The HOA system of privatized governments is flawed and should be eradicated.

a) Signing Contracts that Deprive Citizens of Constitutional Rights

This is un–American.

(1) Contracts of Adhesion

As more and more CIDs are built in California, relative to the amount of total housing being built, consumers like me find themselves without any choice!

If I wanted my daughter to attend California’s best high school, I had to enter into the infamous "contractual arrangement". It’s unconscionable that my wife and I had to sign away our Constitutional rights, or move into an apartment, to get our daughter into California’s best high school. In areas with nothing but HOAs, in my opinion, the "contractual arrangements" are adhesion contracts.

b) HOAs: Corporations? Governments? Both? Neither?

The CID industry has muddied the waters.

(1) Associations have the statutory power to adopt rules, allege a violation by a member, and levy fines.

This ignores a VA Supreme Court decision that found fines to be a sovereign power which cannot be delegated and that opined that fining by associations violated both the US and VA Constitutions. — Unit Owners Ass’n of BuildAmerica-1 v. Gillman, 292 S.E.2d 378, 384 (Va. 1982)

(2) Unfair Debt Collection Practices

The CAI argues that the Fair Debt Collection Practices Act should "be amended so that: the definition of debt does not include fees, assessments or other charges due or alleged to be due a … community association;

"The term ‘transaction’ is added to the Act and defined to … ensure that assessments of community associations are not within the purview of the Act"
http://www.caionline.org/govt/advoc/fed/debtsum.cfm

Without getting into the question of whether or not the homeowners want their HOA vendors to be allowed to engage in unfair debt collection practices, I’d like y’all to consider something else.

When homeowners ask the government to enforce its own laws — the CID industry argues that government shouldn’t meddle with private contracts.

And the CID industry makes campaign contributions.
http://www.caionline.org/govt/caipac.cfm

c) Separation of Powers/ Checks and Balances

Ramona Ripston was the Executive Director of the American Civil Liberties Union Foundation of Southern California, one of the largest ACLU affiliates in the nation. She wrote, "The historical reality is that the people who wrote the Constitution and the Bill of Rights recognized that one of the most important objectives of any American government would have to be limiting the ability of a majority to impose tyranny on all."
http://www.pbs.org/wnet/federalist/opinion-prop.html
http://starman.com/HOA/majority.htm

For seven million Californians, their government has become that which the United States was formed to get away from — a tyranny.

But this time, it’s worse. It’s on the home front.

"What is government itself", asked James Madison, in The Federalist # 51, "but the greatest of reflections on human nature?

If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: You must first enable the government to control the governed; and in the next place, oblige it to control itself."

So he argued, successfully, that "the structure of the government must furnish the proper checks and balances between the different departments", to "oblige it to control itself."
http://www.pbs.org/wnet/federalist/paper51.html

Corporations have no checks or balances. They are run by boards of dictators — I mean, directors — that are the executive, legislative, and judicial branches all rolled into one. As long as HOAs are classified as "corporations", they will have no checks or balances. As long as our legislators fail to institute any form of government oversight, something the Industry is opposed to, the boards of directors will continue to be unaccountable. These "corporations" aren’t causing problems as fictitious persons. It is the people on the BOARDS that are. Not all boards, but enough to make it worth the time for those legislators of ours — that are not afraid of losing Homeowner Control Industry campaign contributions — to do something about it!

Homeowners associations have no limitations on the ability of a majority — or tiny minority — to impose tyranny on all, yet seven million Californians live in them.

There is a lot of frustration with this form of government.

d) Due Process

Forcing homeowners to look to the superior and appellate courts for due process — except in the case of nonjudicial foreclosure, in which the homeowner gets no due process — is a fundamental flaw in the HOA system of governance.

Often, HOA boards just serve as judge, jury, and executioner.

e) Double Taxation/ Tax Discrimination

According to author Evan McKenzie "Sooner or later, [CID] owners will realize that local and state governments are balancing their budgets on the backs of CID residents. That could open up a full public policy debate over the role of CIDs that should have happened 20 years ago."
http://www.uchastings.edu/plri/96-97tex/cidhome.htm

That debate, should start, now.

f) Dependence on Member Participation

The system depends on member participation, and the members aren’t interested.
http://starman.com/HOA/alexander.htm

V. Food for Thought

Now, before you call me "disgruntled" — or try to paint me as part of a "gripe show" — I just ask that you answer two questions first:

Are these things to be "disgruntled" about? Are these legitimate "gripes"?

This is what the Davis–Stirling CID Act wrought. Should we now go back to the CID industry for another law (UCIOA)?

How stupid is that??

Thank you for the opportunity to provide you with input.

Sincerely,
Robert Lewin