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Constitutional Rights in Planned Communities. Are they mini-governments? -Articles
NJ HOA Info@njhoainfo
#1 · August 29, 2024, 10:38 am
Quote from NJ HOA Info on August 29, 2024, 10:38 amThe First Amendment And Managed Communities
By James "Jim" Turffs January 15, 2024
Homeowners associations often look like mini governments. If you ask a lot owner facing a fine or other violation, they will probably tell you that their HOA is an authoritarian regime oppressing the innocent owners in the community or that the Board of Directors is on a power trip. That said, Florida courts have consistently held that HOAs are not governments or “state actors” but are instead private corporations that derive their authority from contracts (as an HOAs Declaration is, at heart, just a contract between the lot owners and the HOA itself to do, or not do, certain things). This distinction is of key importance when it comes to determining what authority an HOA has to limit a lot owner’s Constitutional rights, such as the right to free speech found in the First Amendment to the Constitution. The First Amendment guarantees fundamental rights like freedom of speech, expression, and religion; however, these rights aren't absolute, and private entities like HOAs hold certain legal leeway to restrict them.
The First Amendment, principally, operates to prevent state actors (like local, state, or federal governments) from infringing on an individual’s right to speak – even if what is being said is offensive, hurtful, or even, to some degree, untrue. However, private entities that aren’t state actors are not required to observe First Amendment protections to the same degree. Florida courts have consistently found that HOAs are private creatures of contract and are, therefore, not bound by the First Amendment to the same extent as other authorities. Accordingly, HOAs can pass restrictions that abridge an individual owner’s right to what would otherwise be Constitutionally protected free speech. For example, HOAs can prohibit your expression of support for a local sports team by prohibiting the flying of team flags. (Otherwise, we would all certainly have large “Go Buccaneers” flags in our yards). In the eyes of the state, your right to express your support of a sports team is fundamental and cannot be abridged – but to an HOA, there is a risk of starting a feud between neighbors that could disrupt the peaceful feel of the neighborhood and is therefore subject to restriction.
Florida Statute Chapter 720 sets the baseline for HOA operations. While it emphasizes open meetings and resident participation, it also grants HOAs the authority to enact "reasonable restrictions" on speech that directly interferes with the use and enjoyment of the common areas and facilities. While some items of speech are protected under Chapter 720 (such as the right to display the United States and certain other flags), items that are not specifically listed in Chapter 720 may be subject to restrictions by an HOA. Determining what constitutes a "reasonable" limitation is where things get nuanced. Courts weigh individual expression against the legitimate interests of the HOA. For example, displaying a small political flag on your balcony might be deemed permissible, while an oversized banner blocking residents' balconies might be considered "interfering with their use and enjoyment." (The exact phrasing of the restrictions in your Declaration is going to have a heavy impact on how restrictions are interpreted by the courts and outcomes may vary wildly as a result).
An HOA's ability to limit speech is perhaps never more obvious than when discussing architectural review and approval. Depending on your covenants, your HOA may be able to tell you what color to paint your house specifically to deter individuality. Arguably, your right to paint your house is an act of free expression, something the First Amendment is specifically designed to protect. However, if you purchase a house subject to a Declaration that says houses can only be painted white – you have contractually waived your right to express yourself in that way. House color is only one of several typical restrictions on expression, with others including landscaping restrictions, yard sculptures/ornaments, house decoration, etc.
Since every situation is different, depending on the phrasing of the covenants, the exact act or statement being made by the owner, and the method in which the owner attempts to make a statement, there are no bright-line rules when it comes to determining if a restriction is going to be valid in the eyes of the courts. For the most part, aesthetic restrictions that seek to ensure a common appearance of the community are probably going to be held valid. Restrictions that target a specific idea are going to be harder to justify. For example, a restriction stating that only political signs featuring republican candidates will be permitted would almost certainly be found to be unenforceable. Accordingly, before attempting to amend your documents to include prohibitions on what may be considered free speech, you should consult with an attorney familiar with HOA governance and how the First Amendment applies. We can help ensure that restrictions on expression are content-neutral and are applied to protect the uniformity of the neighborhood.
Florida’s vibrant communities thrive on a delicate balance between individual expression and collective well-being. While HOAs have a certain freedom from First Amendment restrictions as non-state actors, that freedom has to be applied in a fair manner and should err on the side of allowing owners the right to speak freely amongst themselves. By fostering open communication, understanding the legal framework, and the need to involve owners in the restriction amendment process, owners and HOAs can develop a harmonious environment where both sunshine and diverse voices find their place, even within the boundaries set by the HOA itself.
The First Amendment And Managed Communities
- By James "Jim" Turffs January 15, 2024
Homeowners associations often look like mini governments. If you ask a lot owner facing a fine or other violation, they will probably tell you that their HOA is an authoritarian regime oppressing the innocent owners in the community or that the Board of Directors is on a power trip. That said, Florida courts have consistently held that HOAs are not governments or “state actors” but are instead private corporations that derive their authority from contracts (as an HOAs Declaration is, at heart, just a contract between the lot owners and the HOA itself to do, or not do, certain things). This distinction is of key importance when it comes to determining what authority an HOA has to limit a lot owner’s Constitutional rights, such as the right to free speech found in the First Amendment to the Constitution. The First Amendment guarantees fundamental rights like freedom of speech, expression, and religion; however, these rights aren't absolute, and private entities like HOAs hold certain legal leeway to restrict them.
The First Amendment, principally, operates to prevent state actors (like local, state, or federal governments) from infringing on an individual’s right to speak – even if what is being said is offensive, hurtful, or even, to some degree, untrue. However, private entities that aren’t state actors are not required to observe First Amendment protections to the same degree. Florida courts have consistently found that HOAs are private creatures of contract and are, therefore, not bound by the First Amendment to the same extent as other authorities. Accordingly, HOAs can pass restrictions that abridge an individual owner’s right to what would otherwise be Constitutionally protected free speech. For example, HOAs can prohibit your expression of support for a local sports team by prohibiting the flying of team flags. (Otherwise, we would all certainly have large “Go Buccaneers” flags in our yards). In the eyes of the state, your right to express your support of a sports team is fundamental and cannot be abridged – but to an HOA, there is a risk of starting a feud between neighbors that could disrupt the peaceful feel of the neighborhood and is therefore subject to restriction.
Florida Statute Chapter 720 sets the baseline for HOA operations. While it emphasizes open meetings and resident participation, it also grants HOAs the authority to enact "reasonable restrictions" on speech that directly interferes with the use and enjoyment of the common areas and facilities. While some items of speech are protected under Chapter 720 (such as the right to display the United States and certain other flags), items that are not specifically listed in Chapter 720 may be subject to restrictions by an HOA. Determining what constitutes a "reasonable" limitation is where things get nuanced. Courts weigh individual expression against the legitimate interests of the HOA. For example, displaying a small political flag on your balcony might be deemed permissible, while an oversized banner blocking residents' balconies might be considered "interfering with their use and enjoyment." (The exact phrasing of the restrictions in your Declaration is going to have a heavy impact on how restrictions are interpreted by the courts and outcomes may vary wildly as a result).
An HOA's ability to limit speech is perhaps never more obvious than when discussing architectural review and approval. Depending on your covenants, your HOA may be able to tell you what color to paint your house specifically to deter individuality. Arguably, your right to paint your house is an act of free expression, something the First Amendment is specifically designed to protect. However, if you purchase a house subject to a Declaration that says houses can only be painted white – you have contractually waived your right to express yourself in that way. House color is only one of several typical restrictions on expression, with others including landscaping restrictions, yard sculptures/ornaments, house decoration, etc.
Since every situation is different, depending on the phrasing of the covenants, the exact act or statement being made by the owner, and the method in which the owner attempts to make a statement, there are no bright-line rules when it comes to determining if a restriction is going to be valid in the eyes of the courts. For the most part, aesthetic restrictions that seek to ensure a common appearance of the community are probably going to be held valid. Restrictions that target a specific idea are going to be harder to justify. For example, a restriction stating that only political signs featuring republican candidates will be permitted would almost certainly be found to be unenforceable. Accordingly, before attempting to amend your documents to include prohibitions on what may be considered free speech, you should consult with an attorney familiar with HOA governance and how the First Amendment applies. We can help ensure that restrictions on expression are content-neutral and are applied to protect the uniformity of the neighborhood.
Florida’s vibrant communities thrive on a delicate balance between individual expression and collective well-being. While HOAs have a certain freedom from First Amendment restrictions as non-state actors, that freedom has to be applied in a fair manner and should err on the side of allowing owners the right to speak freely amongst themselves. By fostering open communication, understanding the legal framework, and the need to involve owners in the restriction amendment process, owners and HOAs can develop a harmonious environment where both sunshine and diverse voices find their place, even within the boundaries set by the HOA itself.
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#2 · August 29, 2024, 10:46 am
Quote from NJ HOA Info on August 29, 2024, 10:46 amAre Homeowners' Associations Mini-Governments?
By Deborah Goonan Published Sept. 29, 2015
Independent American Communities Blog
From time to time, you will hear elected officials refer to Homeowners’ Associations (HOAs) - using the term generically to include condominium associations, cooperatives, and property owners’ associations - as "mini-governments." But are HOAs really comparable to U.S. local governments, as guided by the principles of our Constitutional Republic? Let's unravel the truth.
Your HOA is a corporation like no other.
The very first thing a real estate buyer or property owner should know is that HOAs, with very few exceptions, are set up as non-profit or not-for-profit corporations. Even though HOAs often perform maintenance, security, and code enforcement functions of a local government, they are not municipalities. Therefore HOAs are not governed as cities or towns.
Instead, HOAs are governed by a set of documents that includes the Articles of Incorporation, By-Laws, and Covenants, Conditions, & Restrictions often referred to as Restrictive Covenants (1) or CC&Rs. (In a condominium, these restrictions are called Declaration of Condominium.) Most legal experts view CC&Rs as a contract between individual owners and the Association, even though individual buyers have no power to negotiate the terms of this contract prior to purchase.
Governing powers held by HOAs are dictated by laws (statutes) that vary by state. These powers include the authority to collect assessments, as well as to issue fines or other penalties for violating a rule, restriction, or covenant. HOAs can also file a lien on your home or even foreclose if you do not pay your assessments or, in some cases, if you fail to pay fines.
How do HOA corporations compare to other corporations?
Most businesses are corporations. You are probably aware that contractors such as roofers have a legal right to place a lien on your home for nonpayment for services they have completed. On the other hand, as a consumer, you also have the legal right to withhold payment to a roofing contractor that has failed to complete the job. You may then settle the dispute in small claims or civil court if necessary.
However, an HOA is not like other business corporations. If, for example, your HOA does not maintain the elevator, or plow the snow from the roads, or repair a leak in the roof of your condo or townhouse, you cannot withhold payment of your assessments.(2) If you do, you risk late fees, interest, attorney and collection fees, lien and possibly even foreclosure of your home.
By comparison, let’s say you purchase a new car from an auto dealer, and you finance that purchase with a loan. What happens if you stop making regular loan payments? An auto dealer or its lender has the right to repossess your vehicle because it is collateral for the loan. In other words, you signed a promise to either repay the loan or return the vehicle.
But the auto dealer would have no legal right to take your vehicle away if you paid in full with cash at the time of sale. Likewise, if you borrowed the money for the car from your credit union, and stopped making payments on the loan, the credit union could repossess your car, but the auto dealer could not.
See the difference? Your HOA has the legal right to foreclose on your home for non-payment of assessments and related charges, even though the HOA did not lend you any money to purchase the home. What other corporation can do that?
Homeowners' Associations have been granted statutory powers that were once rightfully reserved for government.
In short, assessments are comparable to property taxes. They must be paid, no matter what. This is the reason many of your local and state politicians refer to HOAs as "mini-governments." In essence, your HOA taxes your property by way of assessments, and then provides services that would otherwise be provided by the municipal or county government.
To summarize, a homeowners' or condominium association is almost always a non-profit corporation, and the only classification of corporation that has been granted limited governing rights under state law.
Why are HOAs set up as corporations?
Prior to the proliferation of HOAs starting in the 1960s, only a municipal corporation could compel its residents to pay taxes or fines. Around the time of the Civil Rights Era, new federal policies aimed at eliminating housing discrimination were enacted.
During the early days of "white flight," homeowners' associations were deliberately created as private, exclusive communities, where buyers could escape cities for new suburban neighborhoods. Since HOAs are private, non-profit corporations, it has always been argued, internal governance can be dictated by contract. The U.S. Constitution protects the rights of individuals to engage in contracts, without undue government interference.
While Restrictive Covenants could no longer discriminate on the basis of race or religion, they could still be written in a way that would effectively exclude buyers who would not be willing or able to afford to maintain lush landscaping, or to join the community's Country Club. Aesthetic restrictions could be written to require uniformity in appearance and to restrict uses of the property that would convey an image of relative poverty, such as hanging laundry on a clothesline or living in multi-generational households.
So what's wrong with classifying communities as corporations, but treating them as mini-governments?
Today's suburban communities are somewhat more diverse than they were 4 or 5 decades ago. However, it can be argued that, to this very day, in many portions of the country, HOAs tend to be segmented by socioeconomic status. You can readily observe that "estate" homes and luxury condos are often physically separated from standard tract homes, manufactured home communities, or affordable townhouse and condominium communities.
Over the decades, fair housing laws have been amended to add protections for families with children and people with disabilities. Fair Housing law is deemed to be in the public interest, and therefore claims of housing discriminiation at the federal and state level often successfully challenge and override restrictive covenants in HOAs.
But many other fundamental rights that Americans take for granted are, in the eyes of current law, surrendered to the terms of CC&Rs.
And while states have bestowed HOAs with powers befitting a "mini-government," they do not explicitly constrain those powers as enumerated by the U.S. Constitution. This contradictory arrangement results in Association-Governed Residential Communities such as homeowners', condominium, and cooperative associations having more power over the lives and property of its residents than the local, state, or federal government.
It explains how your HOA can get away with fining and suing a homeowner thousands of dollars for minor violations such as having an imperfect landscape, putting up a shed in the back yard, or displaying unapproved decor on the front porch or balcony. It explains why your Association's newsletter and website will probably not have an Editorial section, and why there is a closed internal system for voting, making rules, and covenant violation hearings.
All of these facts beg the question: Is it in the public interest to treat HOAs as both corporations and "mini-governments?"
Are Homeowners' Associations Mini-Governments?
By Deborah Goonan Published Sept. 29, 2015
Independent American Communities Blog
From time to time, you will hear elected officials refer to Homeowners’ Associations (HOAs) - using the term generically to include condominium associations, cooperatives, and property owners’ associations - as "mini-governments." But are HOAs really comparable to U.S. local governments, as guided by the principles of our Constitutional Republic? Let's unravel the truth.
Your HOA is a corporation like no other.
The very first thing a real estate buyer or property owner should know is that HOAs, with very few exceptions, are set up as non-profit or not-for-profit corporations. Even though HOAs often perform maintenance, security, and code enforcement functions of a local government, they are not municipalities. Therefore HOAs are not governed as cities or towns.
Instead, HOAs are governed by a set of documents that includes the Articles of Incorporation, By-Laws, and Covenants, Conditions, & Restrictions often referred to as Restrictive Covenants (1) or CC&Rs. (In a condominium, these restrictions are called Declaration of Condominium.) Most legal experts view CC&Rs as a contract between individual owners and the Association, even though individual buyers have no power to negotiate the terms of this contract prior to purchase.
Governing powers held by HOAs are dictated by laws (statutes) that vary by state. These powers include the authority to collect assessments, as well as to issue fines or other penalties for violating a rule, restriction, or covenant. HOAs can also file a lien on your home or even foreclose if you do not pay your assessments or, in some cases, if you fail to pay fines.
How do HOA corporations compare to other corporations?
Most businesses are corporations. You are probably aware that contractors such as roofers have a legal right to place a lien on your home for nonpayment for services they have completed. On the other hand, as a consumer, you also have the legal right to withhold payment to a roofing contractor that has failed to complete the job. You may then settle the dispute in small claims or civil court if necessary.
However, an HOA is not like other business corporations. If, for example, your HOA does not maintain the elevator, or plow the snow from the roads, or repair a leak in the roof of your condo or townhouse, you cannot withhold payment of your assessments.(2) If you do, you risk late fees, interest, attorney and collection fees, lien and possibly even foreclosure of your home.
By comparison, let’s say you purchase a new car from an auto dealer, and you finance that purchase with a loan. What happens if you stop making regular loan payments? An auto dealer or its lender has the right to repossess your vehicle because it is collateral for the loan. In other words, you signed a promise to either repay the loan or return the vehicle.
But the auto dealer would have no legal right to take your vehicle away if you paid in full with cash at the time of sale. Likewise, if you borrowed the money for the car from your credit union, and stopped making payments on the loan, the credit union could repossess your car, but the auto dealer could not.
See the difference? Your HOA has the legal right to foreclose on your home for non-payment of assessments and related charges, even though the HOA did not lend you any money to purchase the home. What other corporation can do that?
Homeowners' Associations have been granted statutory powers that were once rightfully reserved for government.
In short, assessments are comparable to property taxes. They must be paid, no matter what. This is the reason many of your local and state politicians refer to HOAs as "mini-governments." In essence, your HOA taxes your property by way of assessments, and then provides services that would otherwise be provided by the municipal or county government.
To summarize, a homeowners' or condominium association is almost always a non-profit corporation, and the only classification of corporation that has been granted limited governing rights under state law.
Why are HOAs set up as corporations?
Prior to the proliferation of HOAs starting in the 1960s, only a municipal corporation could compel its residents to pay taxes or fines. Around the time of the Civil Rights Era, new federal policies aimed at eliminating housing discrimination were enacted.
During the early days of "white flight," homeowners' associations were deliberately created as private, exclusive communities, where buyers could escape cities for new suburban neighborhoods. Since HOAs are private, non-profit corporations, it has always been argued, internal governance can be dictated by contract. The U.S. Constitution protects the rights of individuals to engage in contracts, without undue government interference.
While Restrictive Covenants could no longer discriminate on the basis of race or religion, they could still be written in a way that would effectively exclude buyers who would not be willing or able to afford to maintain lush landscaping, or to join the community's Country Club. Aesthetic restrictions could be written to require uniformity in appearance and to restrict uses of the property that would convey an image of relative poverty, such as hanging laundry on a clothesline or living in multi-generational households.
So what's wrong with classifying communities as corporations, but treating them as mini-governments?
Today's suburban communities are somewhat more diverse than they were 4 or 5 decades ago. However, it can be argued that, to this very day, in many portions of the country, HOAs tend to be segmented by socioeconomic status. You can readily observe that "estate" homes and luxury condos are often physically separated from standard tract homes, manufactured home communities, or affordable townhouse and condominium communities.
Over the decades, fair housing laws have been amended to add protections for families with children and people with disabilities. Fair Housing law is deemed to be in the public interest, and therefore claims of housing discriminiation at the federal and state level often successfully challenge and override restrictive covenants in HOAs.
But many other fundamental rights that Americans take for granted are, in the eyes of current law, surrendered to the terms of CC&Rs.
And while states have bestowed HOAs with powers befitting a "mini-government," they do not explicitly constrain those powers as enumerated by the U.S. Constitution. This contradictory arrangement results in Association-Governed Residential Communities such as homeowners', condominium, and cooperative associations having more power over the lives and property of its residents than the local, state, or federal government.
It explains how your HOA can get away with fining and suing a homeowner thousands of dollars for minor violations such as having an imperfect landscape, putting up a shed in the back yard, or displaying unapproved decor on the front porch or balcony. It explains why your Association's newsletter and website will probably not have an Editorial section, and why there is a closed internal system for voting, making rules, and covenant violation hearings.
All of these facts beg the question: Is it in the public interest to treat HOAs as both corporations and "mini-governments?"
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