When Attorneys General fail to protect their Citizens

guest blog by Shelly Marshall (author of HOA Warrior I and II)

On January 4, 2016 Andy Beshear took an oath for the office of Attorney General (AG) in Kentucky. He told Kentuckians in a column on Cincinnati.com :

The Attorney General’s Office seeks justice and defends the oppressed. We provide a voice for the voiceless and a lifeline for the lost and the lonely, the abandoned and the forgotten.

We protect those who cannot protect themselves and are the last line of defense to those who need it most.

Oh, if only that were true for the homeowner and condo owners in planned development communities across our great country. A handful of states are more proactive and homeowner friendly with a few outstanding examples like California, Maryland, and Indiana. Yet a majority of states simply drop the ball on protecting citizens being chronically abused in these communities. Like Kentucky, each state has laws and an AG that are supposed to protect all citizens but generally fail the residents of Homeowner Associations. And some like New York have the most laughable ‘help’ for HOA members with very little justice from their Departments of Justice.

The People’s Attorney

Our nation’s Attorneys General are often referred to as the “People’s Attorney” because as chief legal officer in their respective states, they are supposed to be the the main legal adviser to the government and protector of its citizens. Usually, they swear to enforce federal and state laws. As such, the Attorney General’s Office should be the last line of defense for the people of any state. At least theoretically. Andy Beshear has the correct understanding about his office, but when it comes to protecting people from HOA predators will Attorney Beshear advocate for homeowner rights? Or will he do what so many other Attorneys General around the nation do, wash his hands of any involvement, regardless of what laws are broken, because “It’s a civil matter?”

As a homeowner advocate and HOA abuse author, I hear it all the time, “I tried to file a complaint with the attorney general and they told me they don’t do civil matters.” People, like myself, think that corporate law, contract law, consumer protection law, fair debt collection law and HOA law is there to protect them. And they mistakenly think the state is there to ensure that protection. Thus it comes as a shock to discover that most states in the union do not enforce or interfere in HOA conflicts, calling them “civil” and “internal” disputes even though many laws are routinely violated.

The Utah Code

Coincidentally, while researching the topic of why the justice departments of most states won’t take HOA violations seriously, my own HOA had a board president go rogue. In violation of numerous Utah State Codes, he hired an attorney to try to cancel our annual meeting then unilaterally invalidated the election results when he couldn’t shut it down, refused to turn over the checkbook and records to a newly elected board, and ran the HOA for months without holding any meetings. He spent money he wasn’t authorized to spend (including $5000 to his attorney to keep him in power), sent out a newsletter, and kicked people off his property who confronted him. The behavior was outrageous.

He can’t do that!

The new board and many members called various authorities for help and they all exclaimed, “He can’t do that!” Yet he did. So I called the The Department of Commerce and Consumer Protection to insist that they enforce the Corporate Code and/or HOA Code, both of which were being violated. I reached a representative who spoke candidly, “I’m telling you right now, there is nothing we can do. These legislators pass laws and give us no way to enforce them. We cannot help you.” But it’s the law, I say. “Hire an attorney,” he replied.

“So legislators create laws and expect us to enforce their laws?” I cried.

“Yes,” he replied. “I’m sorry.”

Even though Utah Code specifically charges the AG with seeing that Corporate Law is followed by non-profits (16-6a-1609.Interrogatories by division), lowly HOAs apparently don’t deserve equal protection. Citizens targeted and abused by their boards and the board’s attorneys are told the AG doesn’t get involved with HOAs.

Citizens in most states are told the same. Attorneys General have bigger fish to fry than be worried about the numerous fines for open garage doors, wrong color paint, dogs two pounds overweight, and unpaid assessments that balloon under predatory collection practices. This leads to folks paying thousands of dollars for petty violations by inept and vindictive boards and all too often it leads to the loss of one’s home. “But they live there voluntarily,” we are admonished. And thus the “People’s Lawyers” turn their backs on citizens living in HOAs.

The Three Best States

Keeping in mind that I haven’t researched every law in every state, some states are better than others–the three best states I’ve found to live in for HOA law enforcement is California, Maryland, and Indiana.

In Maryland, they have extended their HOA law so that it falls under the enforcement authority of the Division of Consumer Protection! In Indiana it is specifically referenced in the statue that the AG has jurisdiction to investigate misdeeds by homeowner and condo boards. Although many state’s HOA laws look good on paper, they are essentially unenforceable so Maryland and Indiana have a good start. California Department of Justice posts a list of issues that fall under the jurisdiction of the Attorney General and corporate law. They even provide a comprehensive complaint form online for HOA residents.

No matter what state in which you reside, your Department of Justice website is worth reviewing to get an idea of what your Attorney General thinks about HOA law. Almost all corporate code provides for its own enforcement and almost all states disregard it when it involves Planned Development Communities.

Good Luck New York

Most states are like Utah, basically in a no man’s land with homeowner rights pretty much trampled on by ineffective enforcement and little to no consumer protection or DOJ help. And then there is New York, such a huge contrast from California. In New York, the Attorney General’s office posts an online report entitled “How to Handle Problems with your Homeowners Association.” It basically tells New Yorkers:

a) They can’t help you,

b) Read your documents,

c) Be polite to the board of directors,

d) Hire an attorney if needed,

e) And “Good Luck!”

No kidding, they write ‘Good Luck’ at the bottom of the report! I would laugh if it didn’t make me want to cry.