Enforce or Amend - Nuestra Mantra, Su Mantra

We had a Board governance question recently about whether a five year old board resolution was enforceable by today’s board. What a deceptively simple question with a deceptively complicated answer! The simple answer is yes, a previous Board’s resolution is still Association policy today, but a majority of today’s Board can always resolve to alter, append or revoke the previous Board’s decision.

But, here comes the complicated part of the answer. The Board member asking the question in this situation elaborated about the subject of the resolution, and we learned that the terms of this resolution granted a “free pass” to a group of homeowners whose own yards and landscaping were encroaching on the Association’s common area. This resolution gave those owners explicit permission to violate an unambiguous provision of the CC&Rs. This Board basically said that these owners could treat Association property as their own. In a sense, the Board believed it had voted to surround these owners with a corporate “force-field” and thereby ignore these serious violations of the governing documents. In this Association, another owner was now challenging the encroachment and this new neighbor was frustrated that these owners were expressly allowed by the Board to violate the CC&Rs.

Since the Court of Appeals decision in the Johnson v. Pointe case, Enforce or Amend, has become our mantra. We have consistently advised clients and counseled management that with regard to enforcing the documents in a community association, Enforce or Amend, is the Board’s only real, legal choice. Either the Board must take enforcement action or upon Board or member initiative, the Association must act to approve an amendment to the problematic CC&R provision.

Boards do make other decisions besides Enforce or Amend. In this case, the Board made a resolution to avoid enforcement and to circumvent the proper amendment process. And for a time, their stop gap measure held back the flood of owner concerns or questions. Other Boards play the ostrich and ignore the violation altogether. Still other Association Boards of Directors pick and choose to enforce what they believe to be the most serious or “popular” kinds of violations in hopes that the other violations will fade into obscurity.

But all of this Enforce or Amend avoidance behavior is risky. Other owners can use or make claims of non-uniform enforcement. Owners can and have filed lawsuits claiming damages for the Association’s failure to enforce. Still other owners have sought the protection of the Federal and State Fair Housing laws by alleging that some owners in the community are treated differently and cite inconsistency in enforcement as part of the evidence.

We are sometimes perplexed at the lengths Boards will go with Enforce or Amend avoidance. The simplicity of Enforce or Amend is what makes it so hard. The case does not consider the complexities of enforcement such as cost, severity of the violation or the difficult nature of some homeowners. The Johnson v. Pointe decision does not allow a Board to ignore provisions that no one in the community likes. These are some of the excuses Board members give for their reluctance to Enforce or Amend. But in our experience none of the excuses and none of the avoidance measures matter to the Judge. In situations where the CC&R language is clear and the violation is obvious, any other choice but Enforce or Amend leads to a path of serious risk for the Association.

April 27th, 2008

“Let Them Make Tape” - Why Arizona’s Criminal Statutes do Nothing to Stop an Owner from Videotaping Your Next Board Meeting

The 1980s was supposed to have been the video age, but the dawn of MTV has nothing on Youtube. Now we all can fritter away hours a day (Hey you, get back to work!) on mind-numbing video-bytes of nothing. But don’t make the mistake of believing that your Association issues are not fodder for the amateur videographer in your neighborhood. The clip below is a sampling of what was caught on tape at a Florida Condo Board Meeting.

But not here in Arizona, right? Other states may have laws that directly authorize this kind of recording, but let’s not kid ourselves: there is no express legal prohibition against video taping a Board meeting in Arizona. While I agree that there could be criminal repercussions for video taping someone without that person’s consent, Arizona’s criminal statutes qualify that prohibition (and the criminal statutes certainly do not deputize the HOA or its attorney to police such a statutory violation). If the video taping or photography is being done in a location or at an event where there is no “reasonable expectation of privacy,” then you and I cannot make any complaint to law enforcement.

The criminal statute, ARS § 13-3019 (a statute that prohibits secret videotaping), does nothing to confer upon any Board the authority to prohibit or limit video taping at a Board meeting. A criminal statute (in most cases) does nothing to confer affirmative rights to a non-profit corporation. Criminal statutes are enforced by governmental agencies. Because this criminal statute really does not apply to the Board’s governance of its own meetings, the answer to the question of whether or not an owner can videotape a Board meeting is really quite simple: ”Maybe”.

Why maybe? Remember, CC&Rs are a contract and in most cases only the governing documents confer any kind of affirmative right or authority to the Board or the homeowners. Arizona’s condominium and planned communities act make Board meetings open. Those same statutes also allow homeowners to designate non-owners as spokespersons. Many Boards invite non-owners to meetings as guests. Most of the time, these meetings are held in quasi-public, if not public, places. Other than certain subjects that the law allows the Board to discuss in executive session, there really is likely no reasonable expectation of privacy in most Board or other Association meetings. There may be some room for a Board to write a policy or make rules about how the Association will conduct its meetings. After all, it is the Board’s meeting and a policy to prohibit audio or video recording could be enacted. Arizona’s criminal statues may not apply, but the Board is not without recourse to control the meeting environment and the related procedures. It should be inherent in the Board’s ability to control its own meetings. (Note: If an owner can assert a legitimate disability that is aided by videotaping a meeting, the Board is obligated to reasonably accommodate that disability.)

But maybe a novel idea would be to let them make tape. Maybe there should be several cameras – one at the Board table pointing back at the membership, another focused on the Board members and one in the hallway (a la People’s Court) capturing reactions as homeowners and board members exit the meeting room. The truth is that most meeting videos would be tedious and uninteresting. Many owners that demand such transparency from the Board would grow tired. Meeting minutes would continue to be the preferred and helpful method of memorializing Board discussion and action. I even believe that most owners would eventually ask that the cameras be removed and shut off.

Youtube is here to stay. Cameras are on their way to your next Board meeting. Let them make tape.    - J. Roger Wood

Add comment March 23rd, 2008

Nosy Neighbors Get Permission to Get Nosier

- By J. Roger Wood

“Isn’t it Ironic?” As Alanis crooned more than a decade ago, it’s ironic that our lives are so public when many of us work so hard to keep such things private. We all crave the spotlight and our 15 minutes of fame, but when the spotlight hits our not-so-pretty side, we scramble for the safety of shadows. In recent years, public has successfully nipped at the heels of the private. The Internet beamed into our homes and we voluntarily have posted personal thoughts, drunken college party pics and photos of the kids for all the world (and potential employers) to see. Now, this creeping menace of the public invading the private has moved into the vacant house next door.

Over the years, many of the firm’s clients have spent time, money and considerable effort to better understand how to follow A.R.S. 33-1805 and 33-1258, the planned community and condominium statutes that regulate access to records of the community association. Boards of Directors have heard neighbor complaints and attempted to balance the public right to know with a homeowner’s right to privacy. Our clients and even many homeowners have kept specific personal information specifically private.

Then a few years ago, the Arizona legislature modified 33-1805 and 33-1258 to clarify that an Association is obligated to give homeowners clearer access to Association “financial and other records of the Association.” For the best boards and community managers, this legislative change was without consequence to day to day Association life. Good boards and community managers have long known that transparency of Association business and unfettered access to records is one of the keys to good governance. Full disclosure = happier, informed homeowners. But even with the broader language, our legislature did understand that homeowner and Associations should keep certain personal information private. These changes created more tension between the public’s right to know and the homeowner’s right to keep private matters private.

It is simple to understand the reason why owners want (and should receive) detailed financial information about their Association and how their assessment dollars are being spent in their community. The check and balance of the people’s right to know about the governance and finance of the Association is important to how Associations function. But it is often perplexing how much of the juicy details Neighbor A “has to know” about Neighbor B’s lot file. Boards are often unsure when the records request asks for more than just budgets and expenditures. How much information should the Association give to Neighbor A? What parts of the lot files are sacrosanct? Why can’t these two neighbors just get along? Again with the irony.

Then, last month, a glimmer of (false) hope. The Arizona Office of Administrative Hearings issued a ruling admonishing an Association for failing to disclose copies of a violation letter. Neighbor A wanted the dirt on Neighbor B’s ATV riding habits and Neighbor A had to know how big of a hammer the Association had used in its violation letters. Perhaps a neighborly visit next door could have answered the question and calmed concerns. But the Pollyanna pipedream of neighborly door to door communication has been sacked for these kinds of records requests. Neighbor A sends his letter asking the Association to empty the lot file and disclose it all.

Judge Kowal has come to the rescue. While the state law does allow an Association to choose to keep “personal” information private, the statutes do not define “personal”. Administrative Law Judge Kowal pulled out his dictionary and determined that personal means “of or relating to a particular person” His decision then goes on to say that homeowners who choose to buy a home in an Association are bound by the contractual CC&Rs. Then he leaps ahead to conclude that because enforcement is a function of the contractual relationship, enforcement documents about one owner’s property are now public fodder for the neighbors to review. Making an analogy to the public right to know about criminal prosecutions, Kowal opines that Association enforcement action is part of the public discourse, not to be protected by any confidentiality. Did he just compare an owner’s violation of a private contract to criminal action by the state? This is not only irony, but troubling for us all on either side of an enforcement situation.

The bottom line is that the landscape of lot file confidentiality has changed. ALJ Kowal’s decision does not list all of the possible types of personal information that an Association should or can protect in an owner’s lot file. But even though his opinion does take a big chunk out of the personal, Judge Kowal concludes that the usual suspects of what we all should keep private are “social security numbers, birth dates, and sensitive information such that a reasonable person would expect such information to remain confidential.” Social security numbers and the DOBs are understandable, but when is Neighbor A’s voyeuristic want to know Neighbor B’s situation reasonable? We find that Neighbor A v. Neighbor B problems are rarely anything but illogical and unreasonable. Once again with the irony.

There are a few ways to react to the decision and we are aware that homeowners in other communities have already seized the opportunity to request copies of their neighbor’s enforcement information. We could be cute and tell you to plaster your correspondence with personal information. Every letter could bear the owner’s social security number. Each correspondence could “cc” the Association attorney to keep things confidential. We could encourage a Board to create a rule or policy regarding owner records, retention and what parts of the lot file the Association considers to be private. The CC&Rs could be amended to define the word “personal”. Obviously some of those ideas would not comply with the spirit of the law nor with Judge Kowall’s decision.

We are all going to have to navigate this invasion of privacy together. We will need to look at each case and specifically weigh Neighbor A’s right to know against Neighbor B’s desire to keep life at home private. This is the stuff of reality television and like good little American voyeurs we all love to watch. It just is not so much fun when it hits home. It really is a wee bit ironic. Dontchathink?

Add comment February 20th, 2008