My ears are burning...somebody must be talking about me.
Over at "HOAs", Mika Sadai's Yahoo group that owner activists frequent, a min-debate about me popped up amid the serious discussions they are having on the legislative front--(and by the way, if you haven't checked out that group, along with George Staropoli's "hoanet" you ought to).

The issue was that I practiced law for ten years, including six years in civil litigation when I did mostly HOA representation. Does that mean that my views on the subject--in this case my opinion that HOAs need to have some recourse to foreclose--are suspect?

This is an interesting predicament when you think about it. If you have never worked in the industry you are morally pure, but on the other hand you don't really know what's going on behind the curtain. If you have done legal work for associations, you are tainted forever, but you have a body of knowledge that can only be acquired by experience. This is similar to the issue that broke up the friendship between Sartre and Camus. Sartre believed philosophers should get their hands dirty by being involved in practical politics (which in that case meant revolution), and Camus said he would stick to writing. So--which is better--the knowledge you gain from actual involvement with an imperfect system, or the moral purity you keep by never doing the work? Hard to say.

As for me, I think I was lucky to have the best of both worlds. I stumbled into HOA practice from the construction defect side, and I never did any covenant enforcement or collections work, and never wanted to. I was a litigator, better known as a trial attorney. My job was representing the association against the developer or against an insurance company, or some variation on that theme.

But of course from doing this, I learned a lot about how associations work and how lawyers do covenant drafting and enforcement along with association general counsel work. I certainly began to see very quickly how the cards are stacked against the owners. I noticed among other things how the lawyer works with the BOD, and how the owners are shut out of the loop most of the time, and how a great deal depends on how the lawyer views the owners. Some attorneys want to keep the owners informed and supportive, but others think the mushroom theory is the way to go (keep them in the dark and give them just enough BS to keep them alive). It became obvious to me that the best lawyers understand that it is much better in the long run to keep the owners involved.

So I'd say that I had the best of both worlds in that I learned about this industry without having to go up against individual owners. I saw good board members and control-freak nut cases, and saw the same kind of variation with the owners--some were terrific, others were...not. Good and bad lawyers, board members, and owners. Kind of like people in general. The problem is an unbalanced system that has little or no protection for owners against the misbehavior of lawyers and board members, while there are all kinds of checks against owners getting away with anything improper.

I think this experience did influence my views on many things. As for foreclosure, to me it is an extremely harsh remedy that should only be available as a last resort and with greatly increased limitations and protections for the owner. I want to stop these foreclosures for $250 and $2500 in attorney fees, and I think nonjudicial foreclosure should be legally prohibited.

But to take away the foreclosure power completely is the wrong way to go, it seems to me. Banning HOA foreclosure is premised on the illusion that there is somebody else to pay the bills, some pocketbook or cash trove somewhere that will pay the pool cleaning company and resurface the streets. But there isn't. There is no getting around the fact that when you buy into an HOA you take on a major financial responsibility. If the association doesn't pay its bills, then IT will become the debtor, and IT will be getting attacked by collection agencies.

The way things are shaping up I think even with foreclosure power many more associations are going to be in wobbly shape in the near future. If associations can't keep the flow of assessments coming in because people feel they have no teeth, it will be that much harder.

And if you are pro-owner, if you want owners to be happy, you don't want their association to be in financial trouble. I just can't see how increasing the financial fragility of HOAs is good for owners, and if somebody can, please explain it to me. The biggest problem potentially facing owners--one I think the owner groups should think about fixing legislatively--is what I call the "bottomless pit" liability of individual owners for corporate debts and liabilities. The law is shaping up so that the owners are going to be stuck with the bills for BOD-generated liabilities, non-dischargable in corporate bankruptcy--(see Le Parc and Oak Park Calabasas). That would include debts and tort judgements. This is a frightening prospect indeed. Jim Lingl, an attorney who does a lot of legislative work in California, is trying to get a bill passed that would protect owners against this sort of thing. If you have a story to tell him about such an incident, send him an e-mail at lingllaw@aol.com