guest blog by George Staropoli
In my earlier guest blog this month, Uncovering The Real Community Associations Institute (CAI), I presented a number of CAI quotes on where it stood regarding constitutional protections for homeowners, and its claim that HOAs are not governments in fact. What does the HOA Establishment find so horrible, so objectionable, so damaging as to give rise to its rejection of our system of constitutional government?
The only arguments of any worth, regardless of how slight, is the false claim that HOAs are businesses and that this new form of government is what all the members signed up for and is the voice of the members. Really? In earlier internet postings on HOA Constitutional Government I presented the alternative of using special tax districts as a vehicle to return HOAs to the Union. This week I presented arguments that HOAs violate local home rule doctrine and are outlaw governments. HOAs violate even the most liberal of home rule statutes; statutes that would give the HOA concept all the local government control of the community, except its creation would now be subject to state approval and to our system of constitutional government.
As an example of how this approach is very do-able, I received info on Florida’s Community Development Districts, a form of taxing districts, but one not quite suitable for HOA governance. However, the MEADOW POINTE COMMUNITY DEVELOPMENT DISTRICT, GENERAL AND PROCEDURAL RULES document provides an example of the benefits and protections of creating HOA taxing districts. The Rules document spells out the procedures for managing the district under the state’s Administrative Procedures Act, Rule-Making statutes. It contains rules for record access, open meeting, board conflict-of-interests, etc. all under the municipality statutes. This is important as district boards and officers, as government employees, are subject to civil penalties of up to $10,000.
What it shows by concrete example is the protections of rights and freedoms for all the people; and a long standing legal doctrine or set of laws written not by profit-seeking lawyers and developers, but by people concerned with good local government under the constitution. It is an extension of the liberal home rule doctrine for local government and good for the people, the community and this country.
George, this gets to the heart of the matter!!!!
Another example: in Texas, there is something called a Municipal Utility District (MUD), a public district similar to the CDD.
I find this an even better solution than the CDD, because there is no period of developer control. http://www.jbgoodwin.com/municipal-utility-districts.php
An excerpt from the above link:
“What is a developer’s responsibility to MUDs?
Developers must petition the Texas Commission of Environmental Quality to create a MUD. Developers are prohibited from serving or placing employees, business associates, or family members on the MUD Board of Directors. Developers must pay for or put up a letter of credit equal to 30% of the cost of subdivision utilities. This requirement ensures against “fly-by-night operators” who are not committed to the success of the MUD. The “30% rule” also offers protection to MUD residents in the event that a subdivision is not built according to schedule. Unless they are voting residents within a MUD, developers have no authority or control over the MUD’s Board of Directors. If they are voting members of a district, they have the same power to vote and attend Board meetings as any other resident.”
The point is, ready-made solutions exist. IMO, If HOAs were able to convert to taxing districts, many pitfalls and injustices could be avoided. Certainly, it would be possible to mandate that all new development be a taxing district rather than a private, developer-controlled HOA corporation. (With a Substantial amount of political pressure and legislative advocates to make it happen)
What must be guarded against is the tendency for local governments, including CDDs, to enact complex aesthetic rules and rules of conduct that cross the line over to unconstitutional territory. For example- CA towns issuing fines for brown spots in the lawn during a drought, or the city of Ocala FL enacting an ordinance making it a crime to wear “saggy pants” in public, punishable by $500 fine or up to 6 months in jail.
In both of those egregious cases, public outcry and intense media coverage led to swift legislative fixes. New laws were quickly enacted in CA to stop fines for not watering lawns and for planting low-water alternatives. The Ocala ordinance was repealed after concerned citizens, the press, and the NAACP attended a town hall meeting.
That is our Constitution at work – using its built-in checks and balances.
OMG! I live in Florida with an HOA and a CDD. If you believe a CDD is the answer, you have it wrong! The only positive I can see is that there would be only 1 set of bullies instead of two.
Our board of supervisors is comprised of 5 people. Those 5 people were appointed from one neighborhood out of 8 within the district. Several of the CDD supervisors are also the local bullies on the HOA. The biggest bully was appointed to the board by the developers and then began to get her minions also appointed. If there are vacant seats on the board and only enough people to fill those vacant seats, there is no election. If no one volunteers, the new supervisors are appointed by sitting board supervisors. The CDD are only required to advertise in the newspaper for the vacant positions. How many people do you know read the notices in the paper on a daily basis? There has been no other communications about vacant seats, so board supervisors get to appoint their friends. A board supervisor is paid $200 for every meeting they go to. They can be bullies, get paid and spend money, too! The homeowners haven’t received newsletters in years. The website is not updated with the upcoming vacancies, and each supervisor is in for a 4 yr. term.
There are bigger issues than in an HOA because there is more money to squander. Our CDD was in great financial shape and the CDD District Manager convinced the supervisors to refinance at a lower interest rate, but at the same dollar amount. Then they used the extra money to “update” around the community. The county is required to upkeep some of the landscaping, but since the County is low on money, the CDD board of supervisors has decided the District will pay for it. I’m paying taxes to the county to perform that work, and I’m paying 20% more in taxes to the CDD. The CDD shouldn’t be using my money to pay for what my taxes should be paying for! Right now, the CDD supervisors are considering updating landscaping in common areas. There is still a developer building homes within the District. Who do you think is going to benefit by the upgraded landscape? The individual homeowners or the builder?
District Managers are usually given free reign to contact the landscapers, painters and pond maintenance companies of their choosing. Any of the commercial companies that wins a CDD contract is getting a lucrative contract. Don’t think the District Manager doesn’t get any bennies from those? If no one is really looking, no one will know. I would guess that 98% of the homeowners in our District don’t even know they are in a District and they don’t know when and where the meetings are. And is it by choice or by design that meetings are held almost 10 miles away at another community district? Again, the same bullies who control the HOA are the same ones controlling the CDD and they don’t want any oversight from the homeowners.
Yes, the CDD has stricter laws, but if the HOA’s aren’t held to Florida statute, do you really think the CDD’s will be? It is easier to get documents with the Sunshine Laws.
Check out this article from CCFJ on CDD living in Florida. It’s a great article. http://www.ccfj.net/CDDhiddencostliving.html. Also, The Lake St. Charles CDD had massive amounts of news coverage locally around 2006-2008 because when the homeowners did take over, there was all kinds of infighting between supervisors. HOA’s and CDD’s have made neighborhood living a joke.
Thanks for the information and the link to the article on hidden costs of CDDs.
As you point out, the biggest flaw in FL CDDs is that the Developer appoints the Board for the first seven years, and perhaps longer. Then there is a phase out of Board-appointed directors for elected directors. But it can be hard to displace incumbents, especially if no one is willing to run for election.
Second, since the CDD assessments are a component of property taxes, with HOA assessments paid separately, buyers and owners do not always realize how much they are paying! At first glance, their HOA assessments appear low, but when you add up the CDD portion of your tax bill plus the HOA assessments, the cost is often higher than stand-alone HOAs. On the other hand, HOA assessments are often set artificially low, increasing the likelihood of special assessments.
The other problem, in my opinion, is that CDDs and HOAs usually co-exist, so you have two separate Boards operating under two different Statutes, with different duties. The two Boards should not be run by the same people, but, as you point out, that can happen.
The MUD in Texas prohibits control by the Developer or anyone affiliated. I wonder if anyone from Texas can comment on MUDs?
Still, compared to the HOA, at least the CDD provides better access to documents and better due process for violations.
According to a Sunshine Law Request, Parkway Center CDD, in Riverview, FL had a supervisor that was 2 years delinquent on filling out the required Form 1 for 2010 and 2011. He was fined $1500 for the failure to file but still did not file. He was kept on as a board supervisor for two years during this failure to file. CDD minutes say he wasn’t required to resign, he resigned on his own and the board voted to accept his resignation until they found a replacement. No one checks to see if supervisors are fulfilling the laws, or they don’t care. His $200 pay per meeting would pay for his fine in 6 months and he spent 25 months on the board. What did he care? How could the supervisors justify keeping this person on the board?
And FL CDDs are governed by different Statutes. Plus, the CDD is a pseudo-public governing entity, unlike HOAs, which are private corporations. Still, with a Developer-appointed Board of Supervisors for at least the first seven years in a CDD, it is hard to build in accountability and avoid conflicts of interest.