J. Patrick Sutton Cases & Issues Blog

When Subdivisions are Cities In All But Name

Lately, I've had a number of subdivision governing documents ("declarations," "CCR's," etc.) come across my desk that are just bizarrely lengthy and complicated. As I've said in previous posts, it's not reasonable to expect homeowners without law degrees to read and understand these documents. I realize that's the whole point — that lawyers and association managers have to run the show behind the scenes, generating fees in the process. But then we have the odd situation where homeowners are supposed to be able to control their own communities, but in effect the communities are run by a permanent bureaucracy of unelected, highly-paid technocrats. Can you say "Yes, Minister"?
It seems to me that at a certain point, a community of a given size is no longer a subdivision controlled by homeowner directors, but in virtually every respect a local government. But if that is the case, the "city council" is woefully underdeveloped as an institution — is, in fact, enfeebled by the power and knowledge wielded by their agents (lawyers, association managers). I've seen this in practice, in fact: directors who retain me to give them advice separate from the advice they get from the association's general counsel and association manager because they feel the board, as a whole, is essentially inert or captive. Even the process of special meetings and recalls is enormously difficult and expensive in the case of very large HOA's, and at the end of the day, the best a group of activist owners can do is hope that they can keep a coalition together long enough to make some changes around the margins. At a certain level of size and complexity, it is probably impossible for a subdivision to jettison large-scale association structure and restrictions no matter how fed up a minority of owners may be. Then people sell their homes and move on, a new board comes in, and things come back around to the permanent staff again — the lawyers and association managers.

These large subdivisions come into being because government won't undertake to pay for the infrastructure, and developers have a great deal of political clout to plow earth and build. But in the process, property owners in large subdivisions are denied important rights that residents of towns and cities enjoy — rights pertaining to fair elections, citizen participation, the passing of ordinances, and due process in the prosecution of residents for violations of restrictions (ordinances). I think that owners in large subdivisions have become second-class citizens when it comes to effective representation in what is, in truth, local government. Instead, their local government has been privatized and put into the hands of well-to-do, white-collar people in remote cities who have incentives and motives very different from those of the homeowners who pay these third parties to run their communities.
J. Patrick Sutton Cases & Issues Blog