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Legislation
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Arizona Governor veteos construction defect bill, HB2034 for homeowner associations
It would have required majority vote of homeowners before boards and lawyers filed suits using homeowners money and equity
May 07, 2003
By
Marcus Aurelius
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From: AZGOV
Date: Mon, 7 Jul 2003 16:45:48 -0700
To: "'ahrcnews@ahrc.com'
Subject: RE: Homes
Dear Friend,
I am responding to your letter on behalf of the Governor. Please accept our apology for the delay in response. The Governor greatly appreciated hearing from you on the issue of HB2034. Thank you for the input you provided, it was taken into careful consideration, and we encourage you to continue to advocate for that in which you believe.
Thank you again,
J. Millett
Governor's Office of Constituent Services
MESSAGE FROM AN AHRC VIEWER SENT TO GOVERNOR OF ARIZONA
-----Original Message-----
From: ahrcnews@ahrc.com
Sent: Sunday, May 11, 2003 6:51 AM
To: azgov@az.gov
Subject: Homes
MB>Feedback:Misguided and ill-informed Arizona governor. WAKE UP !!!
What is it going to take to get the legislators and elected
officials to understand that residents in HOA's/CID's pay property taxes,but have no representation due to the fact that they repeatedly fail or refuse to protect the rights of the individual owners just like the misguided and ill-informed Arizona governor?
Does her own HOA/CID have to have its coffers emptied by construction defect lawyers or a member of her family subjected to foreclosure due to the till being drained and the special assessment thugs coming around for another run
at licking out what's left in the bottom of the trough for her, and others like her, to WAKE UP ?
WAKE UP, WAKE UP, WAKE UP !!! This is serious, people are hurting and losing their homes. This is not an isolated or frivolous issue.
Seniors and others may in fact move to HOA's / CID's to not have to worry about maintenance and repairs, but they do not move into these settings to be abused and defrauded by unscrupulous persons who practice both HOA and construction defect law - writing the contract that makes the construction defect problem on one HOA lawyer's desk and then carrying the resulting defect case down the hall to another lawyer in the same firm to clean up.
Are elected officials too ignorant to see what's happening? or do they see it and not care?
Governor Naplolitano WAKE UP !!! Too much time in the sun...too many much time golfing...close friend of Governor Davis (California)...whatever it is, WAKE UP and tend to business. That's what you're there for isn't it???
WAKE UP ! and take care of your constituents
MESSAGE FROM AHRC
Dear Janet:
The above was sent to AHRC News by a homeowner.
Please click here for other reactions on what you have done for homeowners.
American Homeowners Resource Center
http://www.ahrc.com
Posted Jul 8 2003 6:19AM CEST
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Username withheld
San Juan Capistrano, California |
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From: Clancy Jayne
Date: Mon, 12 May 2003 07:49:38 -0700
To: 'AHRC News'
Subject: RE: Misguided and ill-informed Arizona governor vetoes HB 2304 - Construction Defect bill
Marcus go after the 9th floor. I voted for this bill and feel it has good reason.
Clancy Jayne
Arizona House Representative - District 6
Official biography of Arizona Representative Clancy Jayne
Clancy Jayne : Republican - District 6
House of Representatives
1700 W. Washington
Room 128
Phoenix, AZ 85007
Home City: Yuma
Occupation: Business Owner
Member Since: January 2003
Biography: Clancy Jayne moved to Arizona in 1956 as a young boy with his parents Clarence & Peggy Jayne.
Mr. Jayne graduated from Mesa High School in 1967. He is married to Kathleen Jayne and together they have 6 children and 14 grandchildren.
Clancy has resided in the North Valley since 1989. Serving his community is something that comes naturally to Clancy Jayne, starting with his Eagle Scout at the age of 16.
Clancy Jayne lists the following current and former community service: Maricopa County Planning & Zoning Commission Member; President, North Valley Partnership; Deer Valley YMCA, Charter Board Member; Vice Chair, Phoenix Parks Foundation; Member of the American Legion and Moose Lodge; Member of the NRA; Member of the National Association Mortgage Field Services and serves as an Honorary Squadron Commander, Luke AFB.
Mr. Jayne, a Republican, owns a successful small business doing property inspection and securing. He has lived in the State of Arizona over 45 years and all of his children and grandchildren continue to reside here – Clancy Jayne cares about the future of our State.
Committee to Elect Clancy Jayne
20018 N. 18th Drive, Phoenix AZ 85027-4248
Mobile (602) 541-7948 Home (623) 581-1499
Email: cljayne@aol.com
Posted May 12 2003 7:02PM CEST
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Username withheld
San Juan Capistrano, California |
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Remember that when a lawsuit is filed, it is almost impossible to get financing to sell or refinance a property. I owned a condo and some years ago experienced exactly that situation.
I was stuck with a high interest loan in a falling interest rate environment and could do nothing. Others could not sell except to buyers willing to put 30% down or alternatively to buyers who had substantial secondary financing from the seller. The entire market place for those condos was grossly affected.
I watched the market price of the condos jump 25% when the lawsuit was settled, simply because the financial institutions would take risk again and consequently financing returned to normal.
M. Singer
Posted May 12 2003 6:04PM CEST
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Username withheld
San Juan Capistrano, California |
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Dear Arizona Governor:
Here's one reation to your refusal to protect homes and families in Arizona. Please make this part of the Arizona government public records.
Misguided and ill-informed Arizona governor. WAKE UP !!!
Does her own HOA/CID have to have its coffers emptied by construction defect lawyers or a member of her family subjected to foreclosure due to the till being drained and the special assessment thugs coming around for another run at licking out what's left in the bottom of the trough for her, and others like her, to WAKE UP ?
WAKE UP ! and take care of your constituents...........
For more reactions on your veto on HB 2034 please click this link
Auto Response from Arizona Governor
Dear fellow Arizonan,
I recently received your email and would like to thank you for your interest in our state's future and for taking the time to share your thoughts and concerns.
Please know that your email will receive immediate attention.
If you have further questions, you may call my office at 602-542-1318. I look forward to working with you on building a better Arizona.
Janet Napolitano
Governor - Arizona
The above response was edited.
Click here to email Arizona Governor
Posted May 11 2003 8:16PM CEST
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AHRC Admin Account
San Juan Capistrano, California |
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What is it going to take to get the legislators and elected officials to understand that residents in HOA's/CID's pay property taxes, but have no representation due to the fact that they repeatedly fail or refuse to protect the rights of the individual owners just like the misguided and ill-informed Arizona governor?
Does her own HOA/CID have to have its coffers emptied by construction defect lawyers or a member of her family subjected to foreclosure due to the till being drained and the special assessment thugs coming around for another run at licking out what's left in the bottom of the trough for her, and others like her, to WAKE UP ?
WAKE UP, WAKE UP, WAKE UP !!! This is serious, people are hurting and losing their homes. This is not an isolated or frivolous issue.
Seniors and others may in fact move to HOA's / CID's to not have to worry about maintenance and repairs, but they do not move into these settings to be abused and defrauded by unscrupulous persons who practice both HOA and construction defect law - writing the contract that makes the construction defect problem on one HOA lawyer's desk and then carrying the resulting defect case down the hall to another lawyer in the same firm to clean up.
Are elected officials too ignorant to see what's happening? or do they see it and not care?
Governor Naplolitano WAKE UP !!! Too much time in the sun...too many much time golfing...close friend of Governor Davis (California)...whatever it is, WAKE UP and tend to business. That's what you're there for isn't it???
WAKE UP ! and take care of your constituents
Posted May 11 2003 3:19PM CEST
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Username withheld
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Dear Representative:
Today you will vote on HB 2034. This bill is very important to your constituents, the homeowners of Arizona.
This bill will give the homeowner the power to decide whether the HOA can file a Construction Defect lawsuit. It will require that before a Board of Directors may start litigation against the builder they MUST have 51% of the homeowners approval. REMEMBER, IT IS THE HOMEOWNER WHO ULTIMATELY PAYS!
Homeowners should have control over their own property and what happens in their community. There is actual documentation that construction defect lawsuits have been filed without the presence of construction defects. Once a lawsuit is filed the homeowners property is stigmatized......the lawsuit MUST be disclosed before sale of the property.
Tell me, would you buy a home that is involved in a multi million dollar lawsuit and there was a possibility that you would be faced with a very large SPECIAL ASSESSMENT to pay.
The attorney's don't care, they get paid win or lose. There also have been cases where the HOA has won but after the attorneys get their fees and costs there is NOT enough money to fix the defects (if they actually exist). CAI and Curtis Ekmark want this bill to fail, they basically are the only "special interests" OPPOSED to this bill.....
Curtis Ekmark, President of CAI, often makes this statement to all of you in committee, "We only want the homeowner to be in control of their own destiny". Well, here is your chance to grant Curtis and CAI their wish.......VOTE YES on HB 2034.
We, the homeowners, are fully aware that this bill was introduced by the developers and was written to protect the developers but it comes through the back door and protects the homeowners. I am sure protection and rights is what you want for the citizens of Arizona!
Please read the article I have provided below.....it is very important to help you understand why you should vote YES on HB 2034.
VOTE YES ON HB 2034!!!!
Pat Haruff
President
CHORE
Coalition of HomeOwners for Rights and Education
Below is an article written by a homeowner in Southern California.....found on the internet! It pretty much says it all.
_____________________________________________________________________________________________
Stop Me Before I Sue Again
I am filing a lawsuit I do not wish to file. With a lawyer I do not wish to hire. For a claim that has no merit. Against a company I do not wish to sue. With an agreement for legal fees I am not allowed to see.
This lawsuit is driving down the price of my home, disrupting my formerly tranquil neighborhood, and all to correct alleged construction defects in our homes that largely do not exist, we cannot see, do no harm, or will not manifest themselves for many years in the future, if at all.
Of all the crazy lawyers jokes I have ever heard, this is the craziest-and least amusing. But this is no joke; it is happening right now to me, and thousands of other homeowners in Southern California, and they are not laughing either.
Our story began last year, when a law firm sent our homeowners association a letter, telling us we could win a lot of money because our condos were probably just full of defects.
This was not a joke, but a surprise to me and my neighbors, who thought we lived in nice houses, in a nice neighborhood that didn't have any problems that a guy with a tool belt couldn't fix on a Saturday morning.
But the lawyers told us different. Oh no, they said, you have lots of problems-you just can't see them.
We didn't believe the lawyers, and we told our board of directors we wanted nothing to do with their bogus lawsuit.
They did not listen. Instead, they salivated as the lawyers dangled the prospects of large buckets of money in front of them. Money that would come after we filed a construction defect lawsuit. Money they said they would collect from an insurance company, supposedly eager to avoid a lawsuit.
The fact that we didn't have defects didn't seem to disturb the attorneys. They knew of a quirk in the law that would help win the case-and help the attorneys collect a 30 to 50 percent contingency fee.
No one listened as we told them these lawsuits would prevent us from selling, or refinancing, our condos, thus hurting our home values.
No one listened as we told them the builder had videotaped every step of the building process so thoroughly that it was held up as a model of how to prevent defect lawsuits on the CBS news show 48 Hours.
No one listened as we insisted that the only ones who would make any money on this lawsuit were the lawyers.
Finally no one responded when we asked to see the leaky roofs, the crooked doors, the dangerous construction that would merit such a radical course of action. They could not respond: These items did not exist.
But our board didn't listen. So with the two votes that made up a majority of the board, they voted to proceed with the lawsuit on behalf of over 220 homeowners, signing on agreement with the lawyers that, to this day, remains a secret.
So how many of us are in a lawsuit we want nothing to do with?
We thought we had options. We presented a petition to the board-complete with 117 signatures, more than 50 percent of the homeowners-that would have derailed the lawsuit. The board simply and completely ignored our plea.
We'll fix that at the upcoming election in a few weeks. But much of the damage has already been done. Already a few people bought into our complex, unaware of the hundreds of defects that the lawyers said exist. Including water pooling on exterior stairwells, when we have no exterior stair wells, and lots of other defects on items that do not even exist.
But here's the catch: Even though these defects do not exist, as our own attorneys claim they do-thus they must be listed on real estate disclosure forms. Costing all of us lots of money in lower home appraisals and prices. And maybe even legal costs from the new, and disgruntled, buyers.
Even if we drop the suit now, which we still want to do, the biggest investment any of us will ever make is tainted, costing each of a good portion of the equity we were counting on for retirement, or our kids' education, or just plain old savings.
And all because a lawyer sent us a letter, a pipe dream, that our board did not have the sense to rip up into a million pieces, and treat like the rotten, corrupt, insidious sick joke that it was. And is.
Marci O'Brien
Mission Viejo, California
Posted May 11 2003 8:19AM CEST
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Username withheld
San Juan Capistrano, California |
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Why didn't the Republic identify (see article below) Curtis Ekmark for who he really is, a Construction Defect/HOA attorney?
That omission seems just a little deceptive to me. Of course he is happy, he still gets to line his pockets with $$$$$ from the homeowners whether the lawsuit is valid or not. As to Kevin DeMenna, the correct description of who he represents would be to say, he represents the Boards of Directors, because that is who his boss represents. Who is his boss? Curtis Ekmark, HOA/CD Attorney!
The Republic prints weekly columns, one Q & A written by an HOA Attorney, and another column where the questions are answered by HOA Attorney's.
These are nothing but disgraceful ads for the attorneys but the most disconcerting of all is that they ALWAYS recommend hiring an attorney who specializes in Association law. There is only one catch here, the very attorneys who are writing, answering and recommending to hire an attorney DO NOT and WILL NOT represent the homeowner.
I wonder, do these attorneys immediately tell the caller (a homeowner) that they have a Conflict of Interest? Do they tell the homeowner that they represent the Board of Directors *before* the homeowner spills the beans?? Do you, Governor Napolitano see any problem with this?
Was the veto of HB 2034 the reverse of the inane statement we have heard so often from legislators, "Everyone is against this bill so it must be good"......yes, folks our legislators actually have made that statement. In this case EVERYONE except CAI and the Construction Defect attorneys were in SUPPORT of HB 2034! And won't this now cost more in costs to the courts?
Was this acknowledging the "will of the people"??
What in the world is the Governor talking about when she says, the right to sue should never be abrogated. The homeowners right to sue would not have been taken away by HB 2034 and Governor, your reasons for veto are frankly, very weak!
Governor, what plans do you have for investigating and prosecuting when there are no defects and Construction Defect litigation is filed? Please see a plea from a homeowner attached, obviously none of your advisors read it or if they did, they simply ignored the truth and the facts.
I am shocked that you and others feel that it is OK for a Board of Directors to decide whether *my home* should be clouded with the stigma of litigation, valid or not. My home is *my* property, the Board's not responsible to my family or the lender, I am. The only area where the Board should be in control is the Common Areas.
Maybe this benevolent Board will start helping me and other homeowners with the house payments and upkeep of MY HOME. Or maybe Curtis Ekmark who only wants "the homeowners to be in control of their own destiny" will protect us from wrongfully filed lawsuits and bad judgments of the Board. Sure and remember that "beach property..............."
But then again, maybe some in the legislature truly don't understand what "property owner" means. Just look at what some have tried to do to the Eminent Domain bill. Those legislators are not concerned for the property owner, only for the Cities and Towns who they truly protect and represent. Wake up voters, your humble home could be next!!
Who pays when the lawsuit is a loss and the "other sides" legal fees must be paid?? Does anyone smell a SPECIAL ASSESSMENT coming?? But remember, the attorney's get paid WIN OR LOSE!!!! Oh and one other thing, if there are truly construction defects and your HOA wins, WILL THE ATTORNEYS LEAVE ENOUGH $$$$ FOR THE DEFECTS TO BE FIXED???
STOP, STEP BACK, AND THINK ABOUT WHAT YOU ARE DOING TO HOMEOWNERS IN THIS STATE.
All of you also need to be reminded that the "reason for CC&Rs" is NOT to "keep the property values up"!!!! THINK ABOUT IT.......
This veto action from a Governor who promised before she was elected to help the homeowners....... is just another double cross from another politician.
Where are the STATESMEN?????
My message to Governor Napolitano. Governor, you need to start talking to the people who are affected by legislation, this State passes what they feel........and stop listening to your *advisors* who obviously know nothing about what it means to live in an HOA and to be under the often abusive, powerful and uninformed thumb of Boards of Directors. The legislature needs to begin to listen to us instead of the so called special interests they call "stakeholders".
How many more embezzlements will occur before you, the legislature and the Attorney General step forward and do something about protecting the citizens of Arizona who live in uncontrolled HOAs??
For the record, the homeowners have been trying to get the legislature and you (as attorney general and Governor) to help us, but our message as fallen on deaf ears. We have already been devastated by the bogus arguments of all these "stakeholders" with HB 2307 and the "Famous 7" who refused to listen to the homeowners and voted NO on HB 2307!!
NO, those people you heard in the Senate committee who were against HB 2307 were NOT speaking for homeowners! And of course, the people truly affected were SHUT OUT by the Chair of the Senate Commerce Committee!
CHORE will make the effort once more in next years legislative session to gain protection for the homeowners.
We hope our message that CAI, the HOA Attorney, the Management companies, the Developers, the Realtors, the Title companies, the Cities and Towns do NOT care what happens to the homeowners will be heard by this states legislators. They are only interested in their CASH COW and do NOT represent the homeowners.
We no longer want to listen to your messages of, "You need to take baby steps" or "We must take this slowly"......NO, the legislature can and should fix this mess in one session.
We are asking the legislature, who created this mess to mandate a regulatory agency to enforce all laws that govern HOAs. That agency should be the Attorney General's office and the legislature has the power to do this.
If you are not going to do this and help us, then SUNSET ALL LAWS governing HOAs.
CHORE will begin work on a Ballot Initiative and obtaining the signatures required. If you and the legislature will not help us then *we* will do what is needed to fix this form of uncontrolled, unregulated quasi government the legislature has created to enable the special interests. We have been ignored and lied to far too many times and will not turn the other cheek anymore.
We wonder who will be the one to "step up to the plate" and as one lawmaker puts it "do the right thing"!
Please do not underestimate our resolve!!!!
Pat Haruff
President
CHORE
Coalition of HomeOwners for Rights and Education
Posted May 11 2003 8:18AM CEST
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Username withheld
San Juan Capistrano, California |
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Arizona Governor Napolitano vetoed the bill on Wednesday.
Let's see what the various groups had to say about the bill before the Government Committee hearing:
---------------------------------------------
Michael Delmonte, testified in opposition to HB 2034 and the amendment. He stated that he lives in a 126-unit condo complex in south Chandler. He indicated that a temporary fix was done in some instances prior to any settlement being realized. Mr. Delmonte commented that homeowners and HOAs do not like to litigate; however, litigation is necessary when the major reconstruction is costly. He said since many of the homeowners are not in their homes year-round, they depend on the HOA boards to resolve any problems.
In response to Senator Cheuvront, Mr. Delmonte said the defect litigation could affect the resale of the condos. On the other hand, he said some homeowners had problems selling their units because of defects that had not been fixed. Senator Cheuvront said that the stigmatization of a lawsuit makes it more difficult to sell the unit; therefore, it is even more important to have input from as many homeowners as possible because it will affect all the units in the HOA.
Gretchen Jacobs, Arizona Senior Citizens Forum, Inc (Forum), testified in opposition to HB 2034. She stated the Forum is an organization that represents over 70,000 people in Arizona. She said people move into an HOA because they do not wish to deal with certain problems. She said currently the Forum opposes the bill and she will need to look further at the Harper amendment before taking a formal position.
Spencer Kamps, Deputy Director, Homebuilders Association of Central Arizona, testified in support of HB 2034 and the Harper amendment. He said he does not believe anyone disagrees that the goal is to fix the problems. However, this measure deals with the consequences of litigation, which results in a long time span to resolve the problems.
Further, he commented that typically approximately 40% of settlement funds go to the attorneys or experts in the situation, and are not necessarily used for home repairs. Mr. Kamps said if the board of an HOA votes to sue, there are major consequences to the homeowners. He said the entire property is stigmatized whether or not a defect is present in a particular unit.
He said a study was conducted in California and realtors have experienced these types of situations where property values decrease in developments under litigation.
He emphasized that when a lawsuit is filed, the assets of the HOA are at risk. Therefore, a consensus from the homeowners should be required in order to take that step. He outlined the options available to the HOA if the threshold is not met to file a lawsuit.
Representative Hubbs, stated she is also an attorney and has taken a number of homeowner classes. She said she has also been president of an HOA of 30,000 members. She said she originally believed the Harper amendment would be okay; however, she has heard from several large HOAs that oppose the amendment. She indicated that even though there is a law, there is no remedy.
She said Sun City West is experiencing turmoil regarding this issue based on votes because of the difficulty in assembling people. She said this subject has been researched and discussed, and the homeowners would rather trust the HOA board to take care of any problems.
Wendy Briggs, Attorney, Steptoe and Johnson, representing the American Insurance Association (Association), testified in support of HB 2034. She stated the Association is a large organization of property and casualty insurers, and they would like to see this legislation reduce the number of construction defect lawsuits.
Tom Farley, Arizona Association of Realtors (AAR), testified in support of HB 2034. He stated when an HOA decides to file a lawsuit, all properties in the HOA become stigmatized. He said since the disclosure of a lawsuit is required, a property’s value in that HOA is diminished even without any defects. He explained that this bill allows the members of the HOA a voice in how the HOA goes forward in a construction defect lawsuit, and AAR encourages support of the bill.
In response to Senator Tibshraeny, Mr. Farley stated that a lawsuit also diminishes the value of a single-family home in a residential HOA development.
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As can be seen from the above testimony, there are two concerns: The ever present mantra of not decreasing property values no matter what and the right to enforce property rights. The special interests make it clear about their money concerns. The homeowners are asked to rally other homeowners who may not be directly affected by the defects and cannot enforce their property rights alone.
As for CAI, Curtis Ekmark, president of the CAI-Arizona chapter, is a "big winner" construction defects lawyer in terms of several million dollars. Why be concerned about his fees when, for once, this action would help the homeowner?
What is operating here is the utilitarin misguided theory of the "greatest good for the greatest number", and the disregard for individual rights. Socialism versus individual rights.
And no one stopped to raise the response that property values would drop like a brick if word got out about leaky roofs, cracked structures etc.
Posted May 8 2003 10:34PM CEST
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George Staropoli
(View Profile)
scottsdale, Arizona |
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CALL TO ACTION........CALL TO ACTION......CALL TO ACTION
Everyone's help is needed again......HB 2034 is at the Governor's office for signature. It seems that the Construction Defect attorneys represented by CAI and Curtis Ekmark are sending the message to the Governor's office that the homeowners are NOT in favor of HB 2034. CHORE supports this bill!!!
This bill, although it may help the developers, it comes through the back door to give rights back to the homeowner. It mandates that before a Board may begin a construction defect lawsuit 51% of the homeowners must approve it. We all know that not all construction defect lawsuits are valid suits but trumped up charges to line the pockets of the attorneys and who know who else.
The homeowners know the difference and they should be the people to decide whether the stigma of a lawsuit should cloud their property......NOT THE BOARD!!!
Please send your emails to the Governor urging her to sign HB 2034 into law, your action is needed now!!
Send to azgov@az.gov Governor Napolitano.
Pat Haruff
President
CHORE
Coalition of HomeOwners for Rights and Education
Arizona
Posted May 8 2003 7:33AM CEST
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Username withheld
San Juan Capistrano, California |
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