Can an Unconstitutional Law Force You To Sell Your Home to a Private Investor?

[dead0man]

(usually with a question in the title, the answer is no, maybe not this time)
Reason

So, that means all is A-OK with the world, right? Well, if you're a generic condo owner in Arizona, that's mostly true (N.B.: Condominium associations are for people who think HOAs aren't a big enough pain in the ass). But it's not so great for Jie Cao and Haining Xia because the ruling contained a sting.

"When the Xias bought their unit in January 2018, they agreed to be bound by the Declaration, which grants the Association the 'rights, powers and duties as are prescribed by the Condominium Act,'" argued the court. "A forced termination and sale under the statute is unconstitutional but for an owner's contractual agreement under the declaration."

So, the Xias are out of luck, because they contractually agreed to be bound by the law as it stood when they signed. The law at that time allowed for forced sales, and tough sh**t for them that the provision was later ruled unconstitutional.

"That ruling violates common sense," argues Timothy Sandefur, vice president for legal affairs of Arizona's Goldwater Institute, which has filed an amicus brief in the appeal to the state's supreme court. "While it's true that contracts are typically interpreted as including whatever law is in existence at the time the contract is made—a principle lawyers call lex loci contractus—that principle does not extend to laws that are unconstitutional. The reason is that an unconstitutional law isn't a law at all—it's a legal nullity."

[Tintrlvr]

Seems like the likeliest resolution here is that the Arizona Supreme Court will laugh out the argument that the Condominium Act is unconstitutional under the state constitution. Among other things, being a "taking" just means that you get just compensation (as opposed to things that are not takings, which property owners do not get compensated for - e.g., zoning is (probably) not a taking), and the forced sellers did get just compensation. The lower court ruling is strange, certainly.

[Sestak]

The American judicial system has taken pains over the years to ensure that the answer to "can an unconstitutional law still do X" is usually "Yes".

[xelas81]

Isn't this case where only one (or few) condo unit owner is preventing a re-development of condo building?

At the time, Arizona law (Section 33-1228) allowed an 80 percent supermajority (later increased to 95 percent) to terminate a condominium agreement and to "provide that all the common elements and units of the condominium shall be sold following termination." PFP Dorsey exercised its votes to force the remaining individual owners to sell their units to the investment company.