Are HOAs (home owner's associations) unlibertarian?
Consider:
* They are voluntary in the sense that you can choose to move away or not purchase the property in the first place, but a statist can make the exact same argument about taxes and governments in general.
* They have the power to foreclose on your home and give it to a board member for pennies on the dollar, over a small infraction or debt. This seems to be punishment vastly disproportionate to the damages, as per the NAP or as per anyone's idea of common sense.
What do you guys think? Anyone willing to shed more light on these two items?
Thanks!
They are not unlibertarian because they are completely voluntary. To be analagous to the State the HOA would have to annex your property, or have done so to some owner of the property in the past, and then forever lay claim to it even if they make no further agreements with future owners.
Your second point contains very good reasons why I wouldn't advise anyone to join an HOA with broad power over your property or with the ability to change the rules of the HOA without giving you the ability to quit the association. Being unadvisable and being unlibertarian are two entirely different things, however.
Merlin (emphasis added):2) condition after the sale: this is nonsensical. The moment I sign the contact the house is mine and no one can take it away anymore. It’s my property. Whatever conditions the HOA sought to impose cannot be enforced because property has now been transferred to me, and no conditions can apply to the usage of my property.
This (bolded statement) is tautologically true but does not entail that HOA-contracts are illegitimate. In order to get to this conclusion, you must also assume that property boundaries must be (metaphorically) smooth rather than jagged -- i.e., you must assume that certain rights, though logically disconnected, are not legally disconnectable.
For example, the right to eat an orange is logically dependent on the right to break its skin -- you cannot do the first without doing the second. Hence, possession of the first right must come with possession of the second.
On the other hand, the right to go fishing on a certain lake and the right to harvest ice from it are logically unconnected -- you can do one without doing the other, and vice-versa. There is therefore no basis to say that these rights cannot be held by two different people.
shazam:This seems to demonstrate that the HOA is essentially private socialism. While it would not violate the non-agression principle if entered into voluntarily, it is inherently economically inefficient.
Wouldn't this "private socialism critique" apply to every market entity comprised of more than one person, including a company with a single hot dog stand as its asset and ownership shared between three brothers?
Merlin:A single owner HOA, on the other hand (or a shares HOA, for that matter) has both the means to calculate how well its doing, and the incentive to act.
At least on my part, I'm talking about a shares-based HOA (a corporation, co-op, comprised of share ownership in the HOA accompanied with an exclusive property lease contract granted by the HOA to the shareholder). The value (desirability) of such shares on the open market would be directly affected by the quality of the management (bylaws, regulations, etc.) of the HOA. If the rules are bizarre, or over the top as judged by the market no one would want to partake in them, hence the value of the shares would go down as everyone tries to sell, with no buyers in sight.
The "mutual" case is somewhat of a strawman. Even the hot dog stand company has a clear share (equity) delineation among the three brothers.
Z.
There is something compelling about Merlin's argument that you "must be on someone else's property for him to impose his will on you." "Either," according to Maiku, it's "absolute ownership or nothing."
If someone can impose conditions on your own property, then you really don't own the property at all. This could be considered as Caley McKibbin aptly said "the same as the seller still owning the house."
However, a bank that grants a mortgage may place conditions on the mortgager to preserve the value of the collateral. For example, a property owner may not bulldoze his own house.
If the bank has a superior claim to the property, because the bank can "evict" the mortgager upon default, then the bank should be considered the real property owner, and the mortgager considered as having mere possession of the said property.
If the mortgager has provided a deposit of 20%, on a 30 year mortgage, then every year the mortgager "buys" from the bank 1/30th of the claim remaining, on top of the 20% he already "owns."
The contract is completed when the mortgage is paid in full. No more restricted by previous conditions, since all of these have been removed, the property owner comes into absolute ownership and may do as he wishes on his own property.
For a property within a Homeowners' Association (HOA), no matter how many payments are made, the claim by the HOA on the property can never be extinguished, unlike a mortgage.
There is no way for the property owner to "buy" the claim from the HOA, or bring the contract to a completion. [1] [2]
If the HOA has a superior claim on the property, because the HOA can "evict" a property owner, then the HOA should be considered the real property owner, and the property owner should be considered as having mere posession of the said property.
If the HOA is the real property owner, and the claim is perpetual, with conditions that can never be removed, no matter how many payments are made, then this arrangement is functionally equivalent to a lease.
For a lease, the landlord rents to the tenant a property. No matter how many payments a tenant makes, the landlord will never remove his claim on the property, as he has a perpetual claim on the property.
The landlord has a superior claim on the property, since the landlord can evict the tenant upon contract default. The landlord is the real property owner. The tenant merely possesses the property, as long as he abides by the contract.
Now if the HOA should be properly called a landlord, and the "property owner" a tenant, then the HOA can place whatever condition on the property it wants, within the contract, for a perpetual period of time.
This brings about the problem of contract enforcement. If we accept Merlin's view, then mere promises on a contract can never be enforced, but property rights as security can be enforced. [3]
For example, let's say a landlord rents a property to a tenant for a 10 year lease, with monthly payments made in advance. But then when one year elapses, the tenant defaults, and is evicted.
If promises on a lease contract can be enforced, then the tenant still owes 9 years of lease payments to the landlord.
If promises on a lease contract cannot be enforced, then the tenant owes nothing, and the landlord has a vacant property he can lease to someone else.
Let's assume the latter is true. If the landlord wishes to bind the tenant to a 10 year lease, then he may demand from the would be tenant a security deposit in advance, perhaps equivalent to one month for every one year of lease (or 10 months worth).
This security deposit is a pledge by the tenant to the landlord for future performance on the contract. If the tenant breaks the lease, the landlord keeps the security deposit, and the tenant does not owe anything more.
For a property within a HOA, the "buyer" is paying up front in advance the entire lease for an infinite period of time. However, why would anybody sign a lease for a commitment in perpetuity? [4]
If you think about it, signing a lease that lasts beyond your potential lifetime, while paying up front for it in advance, is really a bad deal for a tenant, and a good deal for the landlord. [5]
This is somewhat of a mystery why anybody would do that. Here I suspect this is an attempt to create a quasi-asset, such that lease contracts can be bought and sold on the open market.
If a lease contract is sold, the "buyer" is assuming the lease obligation, and the "seller" is compensated for the remaining value on the lease.
Normally, lease payments are fixed throughout the duration of the lease, since contracts cannot be unilaterally modified. In other words, lease payments cannot be raised, until the lease expires.
For a HOA, the same is true, but since everything is paid up in front, for a perpetual period of time, then there should be no additional charges beyond that. However, the HOA charges fees for maintenance and services.
Not only that, the HOA may periodically raise the HOA fees should costs increase or the reserve fund is too low. Furthermore, the HOA may charge special assessments from time to time for unexpected expenses.
How can these HOA fees and special assessments be consistent with an unmodifiable contract? Remember, the HOA lease is for a perpetual period of time, and thus can never expire. [6]
If the HOA fees were treated like utility charges, then maybe those charges can be passed on from the HOA to the "property owners." The problem with this approach, is that unlike utilities, HOA fees are mandatory and can never be avoided.
For example, if a cable company raises its rates, the tenant can always unsubscribe from the service, but if a HOA raises its fees, and the "property owners" refuses to pay, then it means eviction.
If someone were to be evicted, then it should be for a contract violation on not paying the amount due. But can this be justified if the amount due is not fixed within a lease contract?
Maybe a possible solution would be how a HOA a structured. If a HOA is structured as a mutual, where the landlords and tenants are one and the same, then any expenses incurred by the HOA would, if left unpaid, would ultimately be a liability against the assets. [7]
If tenants cannot be charged the amount, then the landlord is responsible for the expense. But since in a HOA the tenants are also the landlords, the HOA fees are assessed on the "property owner", not as tenants, but as landlords.
In general, the HOA concept should be considered more consistent with a landlord-tenant relationship, than a property transfer rule, and to do otherwise would make it more complicated than it has to be.
MacFall:Libertarian: The HOA recieves a property, and decides on a continual basis whether or not to maintain the restriction. Later occupants have the ability to buy the deed and own the property unencumbered. Unlibertarian: The HOA recieves a property with said restriction. A later occupant wishes to buy the deed unencumbered, but is not able to do so because the encumberments are considered to exist forever, even after the property has changed hands.
Merlin:For a typical contract has no when clause, no time when the house is yours. At any time, if you fail to do something, they take it away. Hence, its not a transfer of property. At any time, you can claim you money back, as they can with the house. Its rent.
Merlin:Now, if I pay you 100 buck to mown my lawn tomorrow, and you cancel in the afternoon, what has happened? Must you mow my lawn? No, its just a promise of your, and hence you can default. But that’s no the end of the story. For you do not own the 100 bucks I gave you. For our agreement was that I’d give you 100 buck to mown my lawn, hence those 100 buck become yours when my lawn is mowed, not now. You do not own them, hence I can easily call those back. Is this an acceptable outcome?
Merlin:Now the HOA could give you single-rent contract: you pay the market value of the house upfront, and what you get is to rent the house. You keep it as long as you comply with the owners (the HOA) regulations.
Caley McKibbin:If there was such as a thing as a value as rent contract and you were mentally retarded such that you would pay the value of a house as rent, the seller could take your money and instantly evict you for any invented reason, rinse and repeat.
Caley McKibbin:A purchase with the stipulation that the seller can arbitrarily change the terms at will is not really a purchase at all. It is simply person A giving person B money for nothing. "You pay me x and I still own the house." That is not a valid contract to begin with.
Merlin:My point is that most HOAs I know ff are mutuals, i.e. socialism incarnate. Otherwise I see no problem at all with their operation.
Sure, and not that I know of, but that doesn't speak to my point.
In the case of an HOA (and an other cases we can imagine, such as Nozick's immaculate conception argument) we see that we can bring about by 'libertarian' means a situation which is 'not libertarian,' or more correctly, a situation in which there is a clear property rights answer, and a clear intuition from libertarianism, that conflict. This should not happen if libertarianism (or the world) were a deductive system where, given the right axioms and well-applied reason, the answer is automatic. Libertarianism, rather, is a way of life and a way of looking at things, not an automatic answer to every problem.
If you purchase the p[property no one has the right to impose something on you, even if the sale contract stipulated such rights. Ownership gives 100% rights and cannot be subject to impediment. Thus, HOAs are, to my mind, very unbliberatrian and actually remind me of these block parliaments we had in Albania during communism.
For a HOA to be truly libertarian, it would have to own all property and than rent it out to clients and than stipulate any conditions it pleases, but like this, they’re just ministates.
So contracts are unlibertarian?
Is the contract of you selling yourself into perpetual slavery libertarian? Should it be enforced? It’s the same thing here: as long as it’s your property (house/body) you can change your mind about it at every time, and ask for no one’s permission in doing so.
No one can drag you to a work you no longer want to perform anymore than they can fine you for not enforcing a rule you no longer want to enforce.
If you purchase the p[property no one has the right to impose something on you, even if the sale contract stipulated such rights. Ownership gives 100% rights and cannot be subject to impediment. Thus, HOAs are, to my mind, very unbliberatrian and actually remind me of these block parliaments we had in Albania during communism. For a HOA to be truly libertarian, it would have to own all property and than rent it out to clients and than stipulate any conditions it pleases, but like this, they’re just ministates.
Doesn't this go against what most anarcho-capitalists believe in? If the HOA stipulates that the walls must be painted green for all time, and all occupants of the property must work 6 weeks out of the year for the HOA, and the original purchasers (and subsequent purchasers) accepted these agreements, isn't this consistent with anarcho-capitalism?
Indeed, HOAs can act like mini-states. Although libertarian in theory (through voluntary agreements), the actual outcome could be quite unlibertarian in actual effect. Given an unlibertarian HOA, would the love it or leave it argument apply, or not?
Is the contract of you selling yourself into perpetual slavery libertarian? Should it be enforced? It’s the same thing here: as long as it’s your property (house/body) you can change your mind about it at every time, and ask for no one’s permission in doing so. No one can drag you to a work you no longer want to perform anymore than they can fine you for not enforcing a rule you no longer want to enforce.
It's my understanding that many on this site do believe that you can indeed sell yourself into perpetual slavery (take the dying man of thirt in a desert situation, and a man offers him water in return for perpetual slavery).
What if you no longer decide to paint your walls green, and the contract stipulates that they can simply take your house away from you if you don't follow the rules. Since you voluntarily agreed to it, isn't it a valid contract? If not, then why not?
Ultima:What if the statist claims that all property is illegitimate to the same degree, since it was all stolen from native americans who were the original homesteaders of the land. If we accept that the stolen private property is legitimate, don't we also have to accept the government's claims over the land? There’s no reason why stealing it again would make the claim more legitimate. Unless the state is the original owner, it has no claim against you.
Ultima:What if the statist claims that all property is illegitimate to the same degree, since it was all stolen from native americans who were the original homesteaders of the land. If we accept that the stolen private property is legitimate, don't we also have to accept the government's claims over the land?
There’s no reason why stealing it again would make the claim more legitimate. Unless the state is the original owner, it has no claim against you.
Does stealing already stolen property also make the claim less legitimate? Also, was the property really stolen twice, or did the "governed" consent to it?
If we are not going to roll back claims back to the native americans, then why wouldn't we consider the state the original owner of the land? Marshals of the state drove out the indians, thus "homesteading" the land, and making it available to white settlers. This argument against the validity of a government claim to land while accepting all private claims to land seems biased: We are discriminating against the government simply because they are called "the government", when in reality they are just an actor like any private actor. If government ownership by force was illegitimate, why is private force legitimate? If government made land available to white settlers via force, then why aren't they considered defacto ultimate owners of the property?
This argument against the statists simply does not seem very robust; if we accept "love it or leave it" in the case of an HOA, then it seems we also have to do so with government, at least governments that have been entrenched for a long period of time, and didn't just come in recently and steal the land from a bunch of other people.
A purchase with the stipulation that the seller can arbitrarily change the terms at will is not really a purchase at all. It is simply person A giving person B money for nothing. "You pay me x and I still own the house." That is not a valid contract to begin with.
If there was such as a thing as a value as rent contract and you were mentally retarded such that you would pay the value of a house as rent, the seller could take your money and instantly evict you for any invented reason, rinse and repeat.
HOA's are as libertarian as Kim Jong Il's Palace. Like professional associations (unions), they only work within the existing state system and have no theoretical plausibility beyond.
Well, what if the contract says "You own the house, but we reserve the right to foreclose to settle debts and rule violations". What if the contract says "You agree to contract modification by majority vote". Isn't it voluntary if you agreed to the contract, whether by buying the property new or as a resale?
I'm not sure that you've proven that point. I don't like many things about HOAs, but I have not yet found anything decidedly unlibertarian about them. I find that disconcerting, given my own voluntarist leanings.
It's decidedly illogical. It's the democracy fallacy. One of the possible outcomes of the arrangement is the nullification of the arrangement. Agreeing to agree with conceivably anything is null. It's like I came here and said, "I hereby agree with everything that you ever say henceforth." It makes no sense. Period. That is why it is the same as the seller still owning the house. An owner has the equivalent power of that "agreement" from anyone and everyone else. It's just semantics, word play, guff.
Is it the idea of a unilaterally modifiable contract that you don't accept, even if entered into voluntarily? It might be illogical, but plenty of people live in HOA arrangements today where the HOA has the power to seize their home and sell it for pennies on the dollar if they neglect to pay their bills on time or break HOA regulations.
What if instead of being unilaterally modifiable, the HOA simply said that "you must paint your walls green and work 6 weeks out of the year for the HOA", but with no possibility of further modifications without renegotiation. Would you accept this contract, if entered into voluntarily?
What if instead, the HOA had a modifiable contract as before, subject to majority vote, but instead of attaching it to the house itself, they attached it to the common property outside of the house. Now, instead of being foreclosed on, you will simply be barred from leaving your home if you don't agree to all of the HOA's rules and stipulations. Would you also consider this unlibertarian?
Try this out: A person builds a house in a development, and freely chooses to join the adjacent HOA. That is his right. He lives there until he dies, and leaves in his will that the property shall forevermore belong to the HOA. That is NOT his right. He does not have the just power to restrict the rights to his propery in perpetuity. The only thing he may justly pass on to the HOA is the right to choose whether or not to release the property from the restriction.
Libertarian: The HOA recieves a property, and decides on a continual basis whether or not to maintain the restriction. Later occupants have the ability to buy the deed and own the property unencumbered.
Unlibertarian: The HOA recieves a property with said restriction. A later occupant wishes to buy the deed unencumbered, but is not able to do so because the encumberments are considered to exist forever, even after the property has changed hands.
I believe real estate law in some parts of the US takes the second route. That is decidedly unlibertarian. The owner of a property cannot justly continue to control it for decades, centuries, or eternities after his death. A deed restriction can only be justly enforced until the person who created it dies, at which time the person who recieves the property has the full and exclusive right to use and dispose of it.
Do away with that tiny (but significiant) detail of property law, and the HOA as an instutution is no threat to a free society.
Pro Christo et Libertate integre!
Is it the idea of a unilaterally modifiable contract that you don't accept, even if entered into voluntarily?
You can't enter into it. It's a contradiction of the mechanism of ownership transfer.
It might be illogical, but plenty of people live in HOA arrangements today where the HOA has the power to seize their home and sell it for pennies on the dollar if they neglect to pay their bills on time or break HOA regulations.
They have the power that the state confers to them, which is hardly libertarian.
That is quite different. Note, however, that silly terms would require discounting the sale price to find buyers.
A modifiable contract is only valid if a range of possible modifications is given. Otherwise it is still the same as no ownership transfer. How non-compliance is handled is, firstly, a matter that pertains only to valid contracts. Secondly, you can't simply seize a house for some little rule violation unless that consequence is also specified, as it would fly in the face of all sense of proportion.
Think of it like this. If you flipped it around so the terms said the buyer, rather than the seller, can change what the buyer must do, it would cancel out and be a simple sale.
It is robust unless you want to prove that the state a) homesteaded every single bit of territory it arrogates under its name (if it did so with stolen funds it's already lost the case) and b) that there is some issue with a voluntarily arising "love it or leave it" type situation.
Freedom of markets is positively correlated with the degree of evolution in any society...
I see a fine difference here.
If the HOA sells you a house, it can impose two kind of conditions.
1) conditions preceding the sale, i.e. sign the contract in a red tux. That’s OK because this condition is part of the contract and failing to comply will fail to transfer property.
2) condition after the sale: this is nonsensical. The moment I sign the contact the house is mine and no one can take it away anymore. It’s my property. Whatever conditions the HOA sought to impose cannot be enforced because property has now been transferred to me, and no conditions can apply to the usage of my property.
Now the HOA could give you single-rent contract: you pay the market value of the house upfront, and what you get is to rent the house. You keep it as long as you comply with the owners (the HOA) regulations. Perhaps on termination you even get back what you paid, without interest of course. So there are ways around that. But other that this, I see imposing conditions on the use of someone’s property as wholly unliberatrian. You must be one someone else's property for him to impose his will on you.
Note that this is no different form what the state does nowadays: “sure man, it’s you house but there are limits. Even here its my law, not your, that goes”. I find this particularly despicable in states. At least socialists had the decency of taking away all property before using it as they saw fit.