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| Avalon, California - Dear American Homeowners Resource Center and Interested Attorneys,
I am writing to you about an extremely serious problem and I hope you can give advice and assistance on how to pursue a remedy.
I am a resident and former Director of a Common Interest Development (CID) called Hamilton Cove Homeowners Association (HCHOA), a waterfront condominium development on the gorgeous island of Catalina. This is within the 27 th District legislative of California.
Our Association intentionally and with malice, refuses to follow many of our governing documents (By Laws, Rules, CCRs, and Articles of Incorporation) as well as state law (Davis Stirling Act, Civil Code 1350-1376, and Nonprofit Corporations Code, 7110 et. seq., as well as 5002-5080). I am talking about hundreds of violations including failure to audit the Association's finances, failure to hold all Board Meetings in public, failure to permit residents to petition the Association with grievances, failure to afford members due process, failure to take and keep Minutes, and failure to permit members it considers "hostile" to the Association from accessing their property or using the common areas. This Board makes up different Rules for different members of the Association and chooses to apply certain Rules against some people but not others. You have on the island of Catalina a privately run portion of your District in which the rule of law, freedom of speech and due process rights are no better than those on the island of Cuba. Because of the criminal behavior of the Association, I resigned my postion as Director.
What is astounding is that the Board members who mastermind this illegal behavior are two lawyers, one of which is a Los Angeles County judge! These Officers of the California Court are intentionally and knowingly violating the law.
Why does the Association act this manner? Because it can. All Associations in California can, it's just that most don't know it. These lawyers know it. They know the laws controlling CIDs can be ignored. The State of California lets these private governments intentionally abuse their residents and never holds them accountable.
What the public needs to know is that CID governing documents and State laws on CIDs are unenforceable in California. Why? Because there is no regulatory agency charged with oversight of these CIDs once they have passed the initial sales stage. If Association Boards, like the one at Hamilton Cove, fail to carry out their responsibilities or to comply with the law, owners have no recourse except to the Courts (for example, the state recently passed a bill mandating Internal Dispute Resolution, an inexpensive way to internally settle disputes? Our Board refuses to offer it to any residents they consider "adverse" and they demand to charge all owners who request it, even though this is specifically prohibited).
Resorting to the judicial system is not only expensive (averaging $40,000 per complaint) but also very risky. The risk is so high that no one in their right minds would pursue it on their own. First, Association resources are much larger than any one person, and an unlimited amount of legal talent can be purchased and used against the private citizen. To make matters worse, according to the law in California; the owner who loses a court contest is liable for the Association's attorney's fees. There is a cottage industry of lawyers in California whose function is to protect Association Boards from having to follow the law in return for access to the Association's deep pockets. At Hamilton Cove, it is Tinnelly and Hylton. These lawyers allow the Board to ignore the law even though they say they represent the Association and not the Board. In any type of enforcement action, these attorneys may charge the Association several hundreds of thousands of dollars. These expenses are passed onto the Association if not assigned to the member who complained (see above).
So anyone who challenges their Board in Court to follow a simple and clear law promised them by the state of California is taking on hundreds of thousands of dollars of risk. And even if the member takes the risk and wins, his Association will then be on the hook for a multi hundred thousand legal bill, part of which will be charged to the person who won! What does the member get for all his trouble and expenses? Nothing that was not already guaranteed to him by law. No damages, punitive or otherwise, accrue to an Association's intentional or reckless disregard of the law. What happens to the perpetrators, the Board members? Nothing. California does not have a law which penalizes Associations or Board members for gross or recurring violations of the governing documents or state law. There is not a single penalty in California for intentionally violating Davis Stirling or other applicable laws, such as the Corporations Code. The Attorney General claims he has no jurisdiction over CIDs.
Further, there are no non-judicial protections for individual homeowner's rights, including those rights guaranteed by the California and United States Constitutions. Civil Code 1354 provides that restrictions contained in governing documents are enforceable unless "unreasonable". The presumption is that the Association's rules are reasonable until proven otherwise in a court of law regardless what these restrictions are. If an owner disagrees, you must first pay the fine or give up your property rights and go litigate in Court. Again, you face a multi-hundred thousand legal bill. And there is nothing in Davis Stirling or any other California law which limits the Association's power to adopt rules and regulations affecting use, public expression, occupancy or behavior in separately, privately owned units within the CID. So for all practical purposes, Associations like Hamilton Cove have carte blanche to abuse its members with impunity, and the lawyers who run our Association know it.
When we purchased our villa in Hamilton Cove, we were expressly assured by our agents Bart Glass (who was Executive Vice President of the Association and still is) that all Rules, By Laws and CCRs and state laws were strictly followed at Hamilton Cove. He lied to us. There was no independent resource, governmental or otherwise, to find out how many people were dissatisfied with the governance at Hamilton Cove. In fact, there are dozens of people. But we could not contact them because the Association refuses to make the names and addresses of the residents available to anyone, including prospective buyers. Right now there are more protections in California for car buyers than condominium buyers. Is this reasonable? We need a Meagan's Law for deviant CIDs.
Any attorney who would like to bring suit against Hamilton Cove Homeowners Association, either to represent us or a group of us as a class, on a contingency fee basis, are urged to contact me. We offer free use of our villa on Catalina if you should be required to come to the island for research, filings etc. It's a short ferry ride from Long Beach.
Hamilton Cove, hopefully, represents the worst that California CIDs have to offer. We are prepared to fly to California, Sacramento, anywhere and at a moment's notice to litigate against this Association. Please help us make a public example out of them.
If anyone has any ideas, proposals or guidance, please do not hesitate to contact me.
Respectfully,
Stephen B. Chasko, M.D., J.D., F.C.A.P., Member and former Director, Hamilton Cove Homeowner's Association
Avalon, California
FAX: 610-383-8152 |
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