California Condo & HOA Law: Pros and Cons of State Agency Oversight

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 .......

Posted by Beth Grimm at April 17, 2005 9:47 PM

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