Wednesday, March 14, 2007

CAI's objections to AARP HO Bill of Rights
I have read the full 3 1/2 page letter from Tom Skiba to AARP objecting to the AARP Homeowners' Bill of Rights, drafted by attorney David Kahne. I see no reason to amend my earlier comments that were based on the summary I linked to from Ungated, the CAI blog that Tom writes.

To sum up, here are the main points of the AARP document:

Security against Foreclosure
Resolve Disputes without Litigation
Fairness in Litigation
Be Told of All Rules and Charges
Stability in Rules and Charges
Individual Autonomy
Oversight of Associations and Directors
Vote and Run for Office
Reasonable Associations and Directors
An Ombudsperson for Homeowners

CAI objects to this. Why?

They don't like the process of developing the document because it didn't include CAI or other industry representatives. I have already addressed that issue. And they don't like the substance because it involves increased state legislation, and more state oversight of HOA board activities. It imposes limits on what HOA BODs can do to people. I think it needs to be pointed out that this type of reform legislation really limits the powers of the attorneys and managers who constitute CAI. Because make no mistake about this: for all this talk of local democracy and consumer choice, the real power in the HOA universe is in the hands of attorneys. They are the ones who exercise the powers of the BOD, when owners don't go along with the program. And that is the power--lawyer power--that gets limited by state regulatory legislation that gives owners some rights. What David Kahne is trying to do (among other things, but centrally) is give the owners some way to stand up to the association's attorney. He does that by giving them some enforceable rights and relief from the boilerplate language that puts the owners in an essentially powerless position from the moment they take the deed to their property.

CAI also want to get AARP corralled into the cozy little UCIOA amendment process that the Uniform Law Commissioners are undertaking (with a CAI stalwart as the ABA advisor to the committee). The AARP project, because it is apart from that ULC process, could throw a monkey wrench into creating an industry-friendly "new" legal structure that would leave the current power dynamics intact.

Here's how I think CAI wants things to end up: The BODs would have nearly absolute power over homeowners, whose only options, if they feel they have been mistreated, would be to elect a new board or sell their home and move somewhere else. The association attorney and property manager would (and do) control the BODs. CAI trains and organizes the attorneys and property managers. The states would require certification of property managers. CAI would provide that certification. The out-of-control owner-run insurgent groups would be shut out of the policy process and branded as loons and nutcases, and their websites would be shut down. The press would get off the "HOA abuses abound" angle, and instead go to CAI for comment on community association issues, and print the PR line. Particular complaints about abuses would be conclusively presumed to be either a) lies and distortions spread by neighborhood malcontents who couldn't get along with Mother Theresa, or b) unrepresentative anecdotes that fail to capture the true level of mass satisfaction with HOA life. And the state legislatures would pass UCIOA and move on from HOA legislation to other matters, like selling the state tollway system to Spanish and Australian corporations to finance free health care and early childhood education for all. Happy ending. That's the desired endgame as I see it. Maybe Tom can correct me if I am wrong.

Here's the problem with that scenario: things were basically like that in the early 1990s, but things have changed. Too many people are now aware of what's going on in Privatopia for that status quo ante to be reinstituted. When a mega-interest group like AARP weighs in, and when half a dozen state legislatures have reform legislation on the books or in the hopper, and when I can name you probably two dozen law professors and at least that many reporters who understand this issue area very well...when all this happens, it is too late to silence or co-opt all the dissenting voices and have everybody speak with a single tongue.

Change is happening right now, and I don't think it can be stopped. I don't know if all the change will be for the good, and I have been critical of some of the reform legislation. But it is coming. And that AARP document is going to give owner rights a much bigger place at the table than they would have had if the industry had their way. That's a good thing, not only for owners but for the industry, if they would just take the long view. I wish I could get CAI to understand that some of their own policy positions are actually adverse to their own long-term interests. But I'll leave that for another post.


Anonymous said...

In my opinion:
The true victim's are not loons, nutcases, malcontents; or, the like. Those whom have been horribly victimized are PEOPLE!

Kevin said...

Mr. McKenzie - Thank you for your informative post.

I think there are several problems with the AARP's proposal. First, most of the provisions are broad platitudes with little or no mechanism for implementation. Second, most states already have laws that contemplate the provisions of the AARP's proposal, especially the states that have adopted the UCIOA. UCIOA already has a provision that awards attorney fees to the prevailing party. UCIOA also has a records inspection provision allowing owners the right to inspect non-privileged association records, such as financial statements.

While I sympathize with owners who have had to face unreasonable BOD's, my experience (I'm an HOA attorney) suggests that the bulk of BODs act in a democratic manner using reasonable business judgment.

There are, of course, exceptions, but I think they are limited. But the press only reports on the HOA that forecloses on its $100 lien, and rarely reports on the benefits of HOAs.

I'd welcome the opportunity to discuss this issue with you in more detail. In fact, it was your book that got me interest in HOA law during law school!

Kind regards,


Anonymous said...

Great post!!
You really summed things up.
I certainly hope you are correct that change is beginning to happen. If it is happening, I believe we homeowner owe you a tremendous debt of gratitude for your book and other writings.
Thank you very much.

Tom Skiba said...

Well, we clearly disagree Evan. But that doesn't make either one of us bad people.

I agree with Kevin that unfortunately most of the "specifics" in the AARP proposal are platitudes. The specifics are quite aggressively non-specific in fact.

As you well know, the devil is in the details on issues that are this complex and just saying something like: Associations and directors will behave reasonably is absolutely meaningless. Reasonable is in the eye of the beholder. And how about expecting homeowners to be reasonable too?

As I said in my blog and in our letter, CAI believes that many of these ideas have merit and we are prepared to work with AARP and others in making them reality.

BUT they have to be implemented in a reasonable (there's that word again) and practical way. Definitions have to be clear and agreed upon, processes have to make sense, and individuals and associations have to have the information and direction required to make thoughtful and effective business decisions.

Anonymous said...

To Attorney Kevin,
"UNREASONABLE BOD's?" I think not. As a former Board President for almost nine years, who did, and did, and did, all by the rules, I firmly disagree with you. I do not think the media represents; or, even identifies, many of the victims. The victims are so beside themselves, they do not know where to turn; or, what to do. Many of these Board Members, and their associates, are very sick, ugly, controlling, conspiring, evil, uneducated individuals. Some of these groups are American grown gangs, that believe anyone vulnerable is their next conquest and meal ticket. Where have you been for the last 7, 8, 9, 10 years? Maybe you should take some additional legal courses from Dr. McKenzie and learn
what has truly been happening, to really fine, unsuspecting people.

Anonymous said...

To Mr. Skiba,
Maybe you should consider WHY AARP did not ask; or, request imput from you; or, your group for this proposal. I believe you will be able to come up with the RIGHT answer very quickly.
The truth, is the truth and it is unfortunate that greed get's in the way of good business sense and practices. Some from your "group," and working under your doctrine, are responsible for how all of you are viewed. You really have no one to blame, but yourselves. I firmly believe that your group IS responsible for ALL your chapters and affialites. Spring cleaning is long overdue!

Anonymous said...

In response to Mr. Skiba's post:
Who is we? I guess it is CAI, and who requested your groups assistance, or input? Your opinion, is one thing, but it is only an opinion.
From reading all this though, I would like to know where a group, like CAI, believes they have the right and luxury to invade someones life and home without the individuals consent and approval?
Nasty diseases simply creep in too!
It seems like McKenzie and some others are on the right track.

Tom Skiba said...

OK, I guess this calls for some facts about CAI and about community associations in general since some of the misconceptions seem to be rampant.

First, CAI doesn't create community associations, never has and never will. Community associations are created by governments and built by developers. We could get into a long discussion as to why community associations offer advantages to governments and developers, along with environmentalists, urban planners and others, but we will leave that for another time.

But it is important to note that community associations have been extremely popular and successful over the past several decades. In 1970 there were approximately 10,000 associations in the US. Today there are about 300,000. One in six Americans (about 50 million) live in an association and the vast majority of them are happy with their homes and living circumstances according to the most recent independent Zogby poll.

So what does CAI do. We provide products and services, primarily education-related, to over 28,000 dues paying members. Our goal is to give all the participants in the community association field the tools that they need to do the best possible job they can for their communities. We test and certify that community association managers have met specific, established criteria for knowledge, skills, and abilities. We help boards and homeowners make smart choices for their communities.

Who is CAI. Well, some claim that we are just a lobby for association attorneys, but nothing could be farther from the truth. More than half of our members are board members and homeowners in community associations. Professional community managers make up the next largest group. Our business partners are the smallest group and include banks, insurance professionals, accountants, landscapers, painters, and many others (yes even a few attorneys). Most of our business partners are small, local businesses in towns and cities across the country. All of our members have an active role in the organization's governance and policy-setting.

Our principal activity is education. CAI conducts literally thousands of educational programs each year across the country ranging from homeowner programs at our 56 chapters, to on-site board training programs, professional manager development education, and specialty programs for management company executives, attorneys, large-scale managers, and many others. We also produce books, newsletters, and other products to develop and disseminate information with audiences throughout the industry.

While many of our resources and programs are designed for and only available to our members, we also make a substantial amount of information available free through our website and through our educational foundation at, where you can find best practices reports on such widely divergent subjects as energy efficiency, transition from developer control, strategic planning, and reserve studies.

We actively solicit a wide variety of opinions and positions on issues facing our industry. That is why we have invited professionals like Evan to speak at our meetings and write for our publications. That is also why we regularly have a variety of homeowner advocates participate in our programs and publications - so that other voices and points of view are heard.

Do we get involved in legislative issues? Of course we do, as every organization and individual has a right to. One of our most significant recent successes was to work with FEMA to change its rules to enable local governments to be reimbursed for debris removal on public roads within assocation boundries after the devastation of Hurricanes Katrina and Rita on the Gulf Coast. An effort that saved local governments, community associations, and individual homeowners literally tens and maybe hundreds of millions of dollars.

Do we want to protect the ability of associations to operate as efficient and effective businesses? We certainly do. Folks are free to disagree with us, and we have the same right.

Finally, are associations Utopia? Of course not, there is no such thing. So any expectation that you can create a living situation for a large group where everyone is happy all the time is just ridiculous. Heck, most of us can't manage that within the confines of our own families, much less a community of hundreds or even thousands.

One final point, and I think one where Evan and I agree. Do the rules and laws governing associations need to evolve as needs, expectations, and demographics change? Of course they do. In any industry that is as dynamic as the housing industry change has to be continual But, we aren't convinced that additional government regulation is always the best approach. We believe that individuals and businesses, educated and informed, are vastly better equipped than governments to make decisions effecting their own homes, businesses, and well being.

Anonymous said...

Mr. Skiba, thank you for your explanation and insight into CAI.
What you have written sounds good, but why would any association need; or, elect to utilize your services? In my experience, and from what I have learned, those homeowners, who have been the most victimized, share the coincidence of their boards being directly affiliated with CAI. As should be understood, and in many situations, correlation does not necessarily equal causation.
Everyone has read horror story, after horror story, inflicted by some of these boards. How is it that a CAI affialiation; or, correlation ALWAYS comes up in these cases? Without going into details, I personnaly know the horror of all of this, and in truth, the situation has been devastating.
I, as so many others, have great difficulty in allowing your group to have had; or, have any impact in/on my life without knowledge of the potential negative, destructive, power and greed driven consequences, and intentional acts of discrimination, that many times appear to be part of the package.
Why does CAI have to tell lawmakers how to run planned communities, their boards, etc. Are you implying our elected officials aren't intelligent enough to do it themselves?
If education is your objective, then, I believe you may want to choose much more wisely, who it is that you educate.
Also, it is my understanding CAI self credentials. Do you have any type of accrediation? I would be interested to know this.
I have also heard one of CAI's motto's is: "empower the powerless." Is this true?
I do hope some day, those at CAI, will be able to accept their share of the responsibility, for the damage done to those so innocent.
Thank you.

Anonymous said...

As long as this conversation is going on, I would like some information about CAI.
How many women does CAI employ in management positions, or, at he corporate management level?
How many of CAI's chapters are run by women?
What is the total membership of CAI and how do the numbers break down by gender and type of affiliation, designation, etc.?
How many in CAI's management level positions live in any type of planned community? For clarification, a community with CC&R's, rules, regulations, etc., more comonly and collectively called an "Association."
Does Mr. Skiba, posting for CAI, in this discussion, live in any type of an association?
How many of those in the total membership, (chapters, affiliates, CAI credentialed professional's etc.), live in an association?
How many of CAI's affiliated attorney's live in an association?
Those with CAI may want to consider the following:
When you all go home and leave the conflict, lies, deceit, fraud, etc., that you hear about at the office, what about those who are forced to go home and have to live with these abuses from their CAI trained, empowered board members?
In my opinion:
Many of the groups have become a haven for bullies, thieves and power junkies.
They harbor highly disfunctional, abusive, narcarsistic, and sociopathic individuals,
who have very bad, or nonexistent, social and personal relationships.


Anonymous said...

Tom Skiba said..."Well, we clearly disagree Evan. But that doesn't make either one of us bad people."

It doesn't make Evan a bad person.

Anonymous said...

> half a dozen state legislatures have reform legislation on the books or in the hopper

> Change is happening right now

So five years later, what has changed?

I don't see homeowners in HOAs being any better off or having more protections now than we did then.