Category Archives: Foreclosures

Well, I’ll cover all kinds of subjects on this blog, even if it sometimes turns my stomach.

Ilya Shapiro and Trevor Burrus Share are smart enough people. Like the rest of us, they’ve watched the rise of private gated communities and Homeowners Associations. And as representatives of the Cato Institute, they’ve filed a fascinating Friends-of-the-Court brief against the federal government under the ‘takings clause’ in the Fifth Amendment.

Quick background: Hurricane Katrina slams into Louisiana severely damaging the Mariner’s Cove Townhomes Association. 14 of the 58 homes are seized by the federal government as uninhabitable. But the feds refuse to pay HOA dues to the Association on behalf of those 14 properties it now controls. The Mariner’s Cove Townhomes Corporation claims that the refusal to pay dues amounts to an illegal uncompensated ‘taking’ under the U.S. Constitution’s 5th Amendment. Mariner’s Cove sues the People of the United States.

Along comes the Fifth Circuit Court of Appeals, and the justices rule against Mariner’s Cove, saying the interrupted income stream does not amount to a ‘taking’ of real property.

The usually conservative leaning Cato Institute has filed an amicus brief asking the U.S. Supreme Court to intervene and rule in favor of the homeowners.

Whoa! This gets into some uncharted territory with a panel of unpredictable Justices who can turn the whole world topsy turvey. Remember Susette Kelo? What started out as a simple ‘save my property’ case…. turned into a ‘damn your little pink house, girl’ kind of case.

While my initial thoughts are that my heart should be with Cato, the Mariner’s Cove property owners, and with hapless homeowners like Kelo, a friend on this blog had my head spinning with questions, twists and turns that Cato and this court case don’t seem to address or even consider.

This lawsuit is not necessarily brought by the Mariner’s Cove homeowners, it’s brought by the Mariner’s Cove Homeowners Corporation. Although the homeowners have a relationship with the corporation that claims to represent their interests, they are indeed different entities. How often does an HOA corporation actually represent the interests of the homeowners?

Many times, we’ve witnessed HOA corporations taking actions that are directly opposed to the wishes of homeowners they claim to represent.

Homeowners Associations are private non-profit corporations. At the same time they are an odd form of de facto government that refuses to recognize 230 years of Constitutional rule of law.

Homeowners are often told they don’t have access to governmental limitations contained in the Bill of Rights. The right to Free Speech, for example, is often denied. The right to ‘due process’ is routinely mocked in the typical HOA. Homeowners Associations frequently harass and mistreat handicapped homeowners despite the federal ADA. Across the country homeowners are fined, private homes are liened, seized and auctioned off in a process that is best described as bizarre.

So now a corporation which refuses to grant Constitutional rights to its own homeowners is coming before the court waving a copy of the Constitution?

So, while my heart may be with Cato, common sense would dictate that the government not be allowed to stomp on the rights of any homeowner.

We’ve learned that a bankrupt homeowner cannot discharge his HOA debt in his bankruptcy. We’ve also seen multiple cases where a fire destroys a home, but that homeowner is held responsible for his HOA dues in perpetuity. That kind of unfairness doesn’t exist outside of gated neighborhoods.

And now one of these private HOA corporations asks the court to order the People of the United States to obey the same byzantine rules it imposes on its own homeowners? Is a corporation asking the government for powers it would never grant to one of its own members?

Whew! My head spins!

I don’t have the faintest idea how the Supreme Court will act on this lawsuit. What I do wish is that Cato would someday take part in a massive effort to get the Supreme Court to recognize that all homeowners inside and outside of ‘incorporated neighborhoods’ have equal access to traditional Constitutional protections.