Homeowner associations -- the new American servitude

Early in our American history, many immigrants financed their escape to the New World by becoming indentured servants. The only real difference, in some cases, between being an indentured servant and a slave, was that the servitude was generally for a period of years. By entering into such a contract, a person gave up valuable rights and privileges. If the contract turned out to be advantageous, all was fine and good, but if the service turned out to be intolerable, too bad.

Presently, both indentured servants and slavery are ostensibly outlawed in the United States. However, many of the incidents of both institutions have been revived in the modern homeowners association. Purchasing a home governed by an association obligates the owner to bow to the will of the association concerning virtually anything having to do with the home. Although there is some language supposedly limiting the power of the association over the lives and possessions of the owners, in many cases a simple majority of your neighbors can impose new and unimagined restrictions on the use of your property.

In most states, obligations to homeowners associations take priority over practically any protections of property granted by the state. For example, the homestead exemption, that allows you to protect a portion of the value of your property from judgment creditors does not apply to homeowner associations. In a recent ruling in a case in Arizona, the Court awarded judgment in favor of a homeowners association against one owner who had moved from the subdivision years before the lawsuit. In the same case the Judge ordered judgment against an owner whose property had been taken by foreclosure. Even selling the property or having a foreclosure did not allow the owners to escape liability to the association. In fact, in the same case, the same Judge issued a judgment against one owner who had died. At least in for both an indentured servant and a slave, their obligations ended with death. All of the above facts had been made clear to the Judge before he issued the judgment. At the last minute, the Judge did change the Judgment by crossing out the name of the dead owner with a pen mark.

Homeowners association wield vast influence and authority in our society. They are the almost invisible government that intrudes into our very personal lives in a way unimagined by any of the other regulatory agencies of our society. Acting through its Board of Directors, homeowner associations have used their power to persecute anyone they disagree with for any reason including race, religion and national origin. In one case, a homeowner was fined repeatedly after the association president learned that her grandmother was an Black American. This is unfortunately, not an isolated instance.

Homeowners who object to the dictatorial powers of some associations are told that they can just move if they don't like it. One association officer testified in a trial, that the reason the Board had imposed so many restrictions and fines on the owners was because they did not want that kind of person in their neighborhood. In today's slumping home market, it is not always even an option for an owner to simply sell their home. In some places, like Arizona, it is very difficult to find a home that is not located in a homeowners association. In many cases, once you have purchased a home subject to an association, you are stuck with the consequences, either good or bad, for years, just like an indentured servant.

Owners who argue with their association that they are being charged for services they do not need or use, are often subject to liens and foreclosure. Failure to pay the homeowners association assessments can result in the association foreclosing on your home. Failure to abide by the rules and regulations of the association can often result in the same results. In one Arizona case, the owner, an elderly lady, was forcibly removed from her home by the police after the association foreclosed because of her failure to cut her plants. Subsequent to that case, the Arizona legislature modified the ability of associations to foreclose for breach of the rules, but they can still collect all of their fines, attorneys' fees and costs, at the time the property is ultimately sold.

In a recent movie, Over the Hedge, at the end of the movie, the homeowners association president is being hauled away by the police and is screaming, "You can't arrest me, I'm the president of the homeowners association." This wouldn't be funny if it weren't true in some cases. In Arizona, at least, the Courts, in some cases, are openly antagonistic to homeowners association cases. I have been before judges who have openly expressed the opinion that disputes involving associations were a waste of their time and the court's resources. This attitudes allows associations and their attorneys to reign almost unimpeded in the courts. Attempts to limit association's powers in the legislatures are opposed by huge professional teams of paid lobbyists. Because they are not considered "state actors" (i.e. agents of the state), homeowners associations are not subjected by the courts to the Constitutional limitations of due process or equal protection. Likewise, almost no courts have recognized that they may be sued for civil rights violations.

Perhaps it would be wise to have a disclosure posted on the boundary of every homeowners association stating that you are advised to proceed at your own risk because you are leaving the jurisdiction of the United States of America.

Those who support associations argue that they are necessary to protect the owners' property values and interests. No one has ever demonstrated to me, through any measure or statistic that property located in a homeowners association is more valuable solely because of the existence of an association. In Arizona, real estate sales people advertise when a home is not in an association, as if that fact enhanced its value. Finding comparable property to show the value or lack thereof, of association membership, is getting harder and harder, because virtually all newly built properties in the state are located in homeowners associations.

From a legal standpoint, since homeowners associations are created and maintained by deed restrictions, if I purchase the property, I am deemed, by the law, to have agreed to the provisions even if I had no actual knowledge of their content. In Arizona, and likely in other jurisdictions, it is not legally required for a purchaser to even have been given or shown a copy of the association's legal documents, including the declarations of covenants, conditions and restrictions (CC&Rs or declaration), before the close of the sale. Arizona law only requires that the purchaser received notice after the sale has closed. But since the declaration or CC&Rs are a matter of public record, any purchaser is deemed to have notice of their existence and content.

This is obviously a subject in which a lot can be said and written and I will likely return to related issues in future posts.