April 28, 2005
General Legislation Information
Here is the scoop on some California Legislation. Did you know that you can follow California legislation by going to www.sen.ca.gov where you can plug in a bill number and subject/author and pull up any bill from the current or prior session. You can find out what the legislative analysts say, and sign up for updated versions of the bill. And you can find out what various interest groups are saying by the bills by visiting sites such as California Legislative Action Committee, Responsible Neighbors, and California Association of Community Managers.
Collections Issues – Foreclosure Restrictions: There has been bad press in the past few years about foreclosures of CID property for small assessments. The Associations claim that the owners ignored notices and the Boards were fulfilling their fiduciary duty to collect assessments. The press stories claim that Associations are abusing privileges granted by statute and documents by using nonjudicial foreclosure as a means of collection. SB 137 would seriously curtail collections processes of any debt under $2500 by eliminating the ability to move toward foreclosure. The clear intent of the bill is to stifle foreclosures as a means of collection of delinquent assessments that do not add up to $2500. The bill has a strong and determined author, and is co-authored by leaders in both houses of the California government. Some effort is being made to soften its effect by seeking amendments to the bill. Last year, a similar bill (AB 2598) was defeated after an all out effort by industry groups that try to help associations cope with difficult issues was made. The PR effort lead to a veto by the Governor, who requested that rather than a drastic changes, incremental changes to the foreclosure laws should be considered. SB 619 is a bill that proposes some lesser changes to the foreclosure laws relating to notice and other topics. CACM (manager’s group) is the sponsor of this bill. Stay tuned – these are hot topics in California.
Election Bills:. SB 61 calls for secret balloting processes; however the means of implementation have been criticized by some as difficult. SB 186 curtails amendment campaign processes by limiting communications that can be sent to owners. Both bills cover elections including for the Board and for other subjects such as special assessments and updating/amendment of document projects. The bills presume that association elections are problematic but ignore that fact that apathy is a rampant problem in CIDs.
Records Inspection and Contractual Matters: AB 1098-David Jones, is a bill proposing considerable reform in records inspection matters and elections. It would allow inspection of all association records, even those that are privileged via executive sessions and attorney-client communications. It would eliminate bidding and contracts from subjects that may be considered in executive sessions (closed meetings). It ignores the fact that the Corporations Code has some language that if incorporated into the Davis Stirling Act, would satisfy some of the concerns obvious in the bill.
You can be informed and read the bills by searching for them at the site noted above. I will continue to provide periodic updates on these bills. ...
And other topics. Come back for a visit.
Posted by Beth Grimm at 9:28 PM
Update on CID Oversight Bills
Common Interest Development Oversight And Education: As noted in the last post, the California CLRC proposed language for a bill on oversight and education for California CIDs. Two legislators introduced bills. (SB 551-Lowenthal and AB 770–Mullin). Both adopted language recommended by the CLRC. These bills provided for an Ombudsperson at the state level who would receive calls from anyone wishing to ask for education or assistance in resolving a dispute. The bill provided for an 800 telephone number and website, and focused some on mediation as a process for resolving disputes. Considerable dissatisfaction was voiced with regard to the $5 per door fee (which would be collected up front as a $10 – 2 yr. fee with each association’s registration occurring within the next two years). There is not much else worth mentioning this year because in the one week period between April 21 and April 28, one of the bills was changed to a two year bill for more consideration and then was terminated by failure to make it out of a committee meeting. The other bill is expected to follow suit.
Posted by Beth Grimm at 9:17 PM
April 17, 2005
Pros and Cons of State Agency Oversight
The State of California is in the midst of considering state oversight of common interest developments (CIDs). Other states have oversight programs of various types, Florida and Nevada being two of them. The California Law Revision Commission (CLRC) has been studying the issues for more than 2 years and has held several public hearings. The original focus of the CLRC was education and oversight (by accepting complaints from persons who live in CIDs) with a heavy dose of enforcement including punishments for board members guilty of wilful violations of the laws regulating CIDs and public posting of Associations whose Board is cited with a violation of the law. The CLRC moved away from incorporating enforcement provisions at the outset but held onto that component by proposing incorporation of the enforcement provisions 3 years after the effective date of the new "agency" (used for lack of a more descriptive word). Opponents to the enforcement component suggested that it is patently unfair for the State to focus so heavily on meteing out punishment given that it has failed to provide any education geared to help HOA boards understand their responsibilities under HOA law.
Two California legislators have introduced bills this legislative session that adopt the suggested language of the CLRC (SB 551-Lowenthal and AB 770-Mullin providing for creation of an ombudsperson program that would involve oversight through assistance in resolving disputes and education). These bills will be making their way through the legislative session and it will be interesting to see what happens. Running parallel to these two comprehensive bills is a simpler bill (AB 304 - Battin) which also provides for a CID ombudsperson. All bills ground the program in the Department of Consumer Affairs.
Industry groups and consituents in California are now and will continue to weigh in on the practical aspects and potential pitfalls of the obbudsman/education program. Stay tuned for more information. You can also review the history on these bills on the CLRC website (clrc.ca.gov), and pull copies of the bills from the State website (sen.ca.gov). Stay tuned .......