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July 29, 2008
Be Careful What You Wish For
States continue to pass legislation designed to "fix" the problems with condo's and HOA's. Whether they fix or compound the problems, only time will tell, but one thing is for sure, the people living in associations will pay more because of the laws.
The majority of legislation proposed every year is usually a response to a problem with a few associations, boards or management companies. Since the people pushing it are loud and adamant, many of their proposals are adopted - some in their original form - some altered through the process. I any event, they are often punitive, and most are dealing with some form of oversight of associations. Oversight and regulation costs money, so associations are taxed by the state to cover the costs (in the case of Florida, they are overtaxed which allows the state to take the excess for other purposes, screwing the condo owners twice). Virginia just taxed all associations to set up an oversight board and ombudsman. California has an association election law that is almost impossible to follow and probably doubled the costs of annual meetings there.
What will be accomplished? Probably not as much as the people pushing the legislation think. Idiots will still move into and serve on association boards because the owners will elect them without much thought. So there will always be associations with problems - this will just provide another way of dealing with it. Manager licensing will get rid of a few small companies, but won't stop the periodic embezzlement or people getting licensed who just aren't that good at managing, And the costs of licensing and regulation will be passed along to - who else - the owners.
I'm not anti-legislation. I just think this piecmeal approach will end up costing everybody more and won't go very far in solving association problems. I'll do another blog about what I think may be a better option, down the road a piece.
Posted by joewest at July 29, 2008 9:26 PM
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