The Arizona Senate will vote this week on an important bill, and the measure has virtually nothing to do with illegal immigration or the state budget fiasco. Senate Bill 1162 is about something more fundamental — your rights to own private property, and your rights to “freely contract.”
I’ve gotten lots of response when I’ve written previously about how these rights are threatened by homeowners associations.
One such response was from a real estate agent, saying, “You’re unhappy in your neighborhood and you’re free to leave it (even though I hadn’t written about my own HOA), so let me help you get in to a different home.”
I called and said, “You’re right, I need to move. I want to buy a house in the East Valley that’s less than 10 years old and is not regulated by an HOA. Where should we begin looking?” He followed up with me two days later and said, “Uh, well, given your parameters, the choices are rather limited …”
Indeed, it is difficult for anybody in our area to escape HOAs. Mesa and Gilbert both require home developers to provide private management — an HOA, in other words — to oversee recreational areas, parks, walkways and other “common areas.” Why? City governments can collect property taxes and spend that money on “other things,” while parks and streets are funded by the dues and fees that HOAs collect from you. Municipal governments love this. Meanwhile, the freedom to purchase a home devoid of HOA control is steadily dissipating in Arizona.
Others have responded by saying, “We all have the right to freely contract with other parties. Just because somebody enters into a contractual agreement with an HOA and then decides they don’t like the situation, that doesn’t warrant governmental intervention.” I agree with that entirely.
But when I speak of problems with Arizona HOAs, I’m not speaking of disputes over how often the shrubs should be trimmed, or what color the house should be painted.
Let me illustrate the severity of our Arizona HOA problem with an analogy. Imagine that you and I contract with each other to start up a widget manufacturing business. Then, we contract with a third party, “person X,” to sell out widgets in exchange for $1,000 a month in salary. Then you and I change the terms of our agreement and decide that “person X” will now only be paid $500 a month. Should “person X” still be obligated to work for us, even though we’ve changed the terms of our agreement? In a court of law, the answer to this should be, and likely would be, no.
But if “person X” is a homeowner who signed an HOA agreement, then, according to state law and recent court rulings, they have virtually no recourse no matter what the HOA does.
As I’ve researched this problem, I’ve found several serious and egregious examples. There was the guy (who insists on remaining anonymous) who bought a single-story home in a Maricopa County neighborhood that permitted two-story home conversions. When he presented his plan for a second-story addition to his HOA, they denied approval. The guy eventually took his case to court and in the middle of the lawsuit, his HOA changed their rules to prohibit second-story additions.
The guy lost his right to add on to his house, and was ordered by the court to pay the HOAs legal bills, all the while the members of the HOA board, many of whom owned two-story homes and didn’t want another one in the neighborhood, arbitrarily changed the substantive terms of the contract. Is this man “freely contracting” with his HOA? In reality, he’s held hostage by it.
And then there’s Marlene, an elderly widow in a wheelchair. Before she bought her home in Pinal County’s Gold Canyon, she arranged an agreement with the home seller, the home developer and the HOA to allow her convenient access to her wheelchair-outfitted van (without the van she’s stranded and can’t get around town). Yet after she moved in, the HOA began sending her fines and threats to tow the van, because, it alleged, it was improperly parked — never mind the agreements it had made with her. So much for the “right to contract.”
I’ve now begun chronicling some of the struggles for private property rights with my colleagues at the Arizona Web TV network. We’ve set up a separate Web site where Marlene’s story is depicted (other stories will be coming soon). Log on to www.HOAWebTV.com to see for yourself how the “right to freely contract” is being upheld. Then, contact your state legislators and ask them to support SB1162.