August 11, 2004

By AHRC News Services
Copyright AHRC News Services

The next few weeks will be crucial for the fate of several homeowner association bills that are making their way through the California legislature. The legislature must vote on all bills by August 31. The governor has until September 30 to either sign or reject them.

The major battleground is over AB 2598 (Steinberg) and SB 1682 (Ducheny)

The national office of CAI has put out a press release that they are planning a full court press on the governor to reject the Ducheny/Steinberg anti-foreclosure bill. You can expect them to make claims that these bills will financially devastate homeowner associations - whereas it is their own pocket books that may be affected.

You can expect them to say such things as "we are the friends of homeowners". With friends like these, homeowners maybe advised to call Homeland Security!

Who knows what sorts of other tricks they will get up to! Hence, it is very important that homeowners contact Governor Schwarzenegger to ask him to sign this bill, and to send a copy to your local media. These are important battles.

These two bills have now been made into mirror-image bills - that is, they are identical. They will forbid non-judicial foreclosure for unpaid assessments that are less than $2,500. The bills' authors made a major concession to secure the support of the California Association of Realtors (CAR). CAR had threatened to oppose the bill unless the provision mandating that a foreclosed home be sold for 90% of appraised value, be changed to 65%. CAR said that it would be very difficult, if not impossible, to sell a home if the minimum selling price was 90% of appraised value. If they could not sell a home, they could not earn their commission. Such is the nature of special interest politics. The authors chose to lower the minimum selling price to 65% of appraised value. They were concerned that the governor might veto the bill if the powerful CAR opposed it.

Another major HOA bill is AB 2718 (John Laird). This bill requires full disclosure of the reserve requirements for a homeowner association and that status of those reserves.

This part of the bill is good, but homeowners have been stonewalled by Laird's legislative aide, Clyde McDonald, on another portion of the bill that would create a lien on a home.

The bill authorizes "reasonable" charges for homeowners to obtain reserve information. Many homeowners know from experience that in reality, "reasonable means unlimited". If these charges are not paid, the homeowner association can put a lien on your property.

Clyde McDonald assured homeowners that this was not the intent of the bill, and promised to get an official opinion from the legislative counsel to that effect. He never has, despite numerous requests over the past 2 months. The bill is now on the eve of passage in the senate with that same provison intact. Many homeowners believe that McDonald had no intention of seeking an opinion from the legislative counsel, and was simply delaying until the bill passed in order to protect the interests of groups such as CAI, ECHO and CACM. Homeowners plan to write a formal letter of complaint to the Senate Rules Committee.

The third bill is AB 1836 (Harman). This bill requires an additional dispute resolution procedure in homeowner associations.

The fourth HOA bill is SB 1581 (Battin). It requires that elections in homeowner associations be held by secret ballot. It is expected to pass.

The fifth major HOA bill is AB 2376 (Bates). It requires that homeowner associations have a "fair, reasonable and expeditious process regarding approval of homeowner requests to make physical changes to the owner's property. It too is expected to pass.

So get out your pens and quills and get your letters of support in to the governor. It is your home that is at stake. Don't let this opportunity slip by to make a major breakthrough in the law.

Other states are watching and if California passes these laws, the implications nationwide are hopeful and profound.

VIEW THE BILLS - WRITE GOVERNOR ARNOLD SWARZNEGGER

Write Governor Schwarzenegger to ask him to sign Homeowner Association Bills - AB 2598(Ducheny), SB 1682 (Steinberg), AB1836 (Harmon), SB1581 (Battin), AB 2376 (Bates) and Veto AB 2718 (Laird)

• AB 2598
Thank Assemblymember Darrell Steinberg

• SB 1682
Thank Senator Denise Ducheny

• AB 1836
Thank Asssemblymember Tom Harmon

• SB 1581
Thank Senator Jim Battin

• AB2376
Thank Assemblymember Patricia Bates

• AB 2718 - A lien Bill for Homeowners and a profit maker for Realtors, Lawyers and Managers
See attached analysis of AB2718 and letter to analyst Nora Crowley
Write Assemblymember John Laird