SB 948 California Senate Bill - INTRODUCED
Here are three new bills introduced in the California legislature pertaining to CIDs. Fred Pilot sent the links and bill summaries. What you have here is mandatory training for BOD members; tightening of open meeting "sunshine" requirements; and a 2% limit on assessment increases for low and moderate income housing. I would expect pretty stiff opposition to these, except maybe the training of board members. How can anybody object to that? It is impossible to defend the current state of ignorance, especially considering the rate at which the California legislature is heaping new procedural rules on their heads.
Existing law requires the Department of Consumer Affairs and the Department
of Real Estate, to the extent existing funds are available, to
develop an online education course for the board of directors of an
association regarding the role, duties, laws, and responsibilities of
board members and prospective board members, and the nonjudicial
foreclosure process.
This bill would, in addition, as of January 1, 2009, require every
member of the board of directors of an association to complete at
least one 3-hour course during every term of office relating to
decisional and statutory law regarding common interest developments.
The bill would require such a course to be approved by the Department
of Real Estate.
5 comments:
Pretty typical of California - let us have our cake and eat it too. All of the regulatory and procedural requirements that have been heaped on associations cost money. Money that MUST come out of the pockets of all the homeowners (at least those who pay their assessments). I have heard of associations that have spent literally thousands of $ just to comply with the new election rules in California. If you believe that such rules are necessary that is fine, but you have to be willing to pay for them as well. Since associations are corporate entities they have to be run in a business-like manner, they can't treat their budgets in the cavalier way that many governments do. 2% doesn't even come close to the CPI over the past couple of years.
Tom has a good point. I've been saying for years that the California approach is hyper-technical and burdensome. It's a whole series of major reform laws, mostly emerging from the California Law Revision Commission. What the CLRC is doing basically involves getting a whole lot of smart lawyers together and coming up with a lawyer's idea of how to run a community. And the result is, not surprisingly, a lot of rules and procedures that only a lawyer can understand. And this can be expensive. I think the election statute (which was not really a CLRC product as I understand it) must be a huge hassle for most associations. The law requires each association to first create its own election procedures, which have to comply with the statutory framework (including election monitors), and then they have to implement their own procedures. And who is supposed to pay the monitors? But the reason all this came about is pretty clear: there were a lot of abuses, and those abuses were brought to the attention of the legislature, and the reform juggernaut got rolling. I wrote an article for a CAI publication a few years ago where I said that abuses could lead to an adversarial relationship with state legislatures, in turn leading to over-regulation. That may be what's happening in CA.
Evan:
Not only a huge hassle, but a huge, expensive hassle. What is most amusing is that the election law has spawned an entirely new industry of election monitoring companies who assist associations in meeting the complex requirements of this law.
I totally agree that we have achieved over-regulation. I would argue though that it has never been demonstrated that there were or are "a lot of abuses". We all agree that there are abuses of process and authority in associations as well as other types of organizations, but has it been demonstrated that they are substantial in nature across the tens of thousands of associations in California or the almost 300,000 across the US? I don't think so. In fact, what we have is over-regulation by anecdote. Demonstrably not the best way to make new law, whether it is community association law, tax law, or any other law.
T
Tom:
I agree on a couple of points. There is no doubt that particularly egregious examples of bad behavior often become the spark for regulation. Bu that's true for many policy areas--not just HOA regulation. We call that the "policy window" theory. Something happens that allows people to point to an issue and say "Look how bad this is!" That moves it up the policy agenda. It is a strange system sometimes.
And it is certainly legitimate to argue about how prevalent the bad behavior really is. I don't know, and I don't think anybody knows for sure due to the lack of publicly-available data in most states. But check out the volume of complaints to the Nevada and Florida ombudsman offices. I think it is pretty high.
But what I see with community associations is a structural problem: the whole institution depends on volunteer directors, and they don't have the time, energy, money, and in some cases the expertise to learn how to do their jobs as well as the law expects them to (and as well as they need to, if this institution is going to rehabilitate its public image).
I realize that CAI and a few other organizations offer seminars for owner-directors where they could learn how to do their jobs. But I don't think the penetration into that market is very deep. I wonder what percentage of the nation's directors have been comprehensively trained? I think it is pretty small. The vast majority are just operating on a wing and a prayer.
Question: shouldn't there be mandatory training for HOA/condo directors? And shouldn't there be a system for paying for some of it, such as an annual small payment by associations, and/or a fund set up by developers? You can't give somebody a haircut without getting trained and getting a license, but you can make decisions about whether other people's kids can play outdoors with zero training. Makes no sense to me. (I have some ideas about how to do this training, but I'm still working out the details. More on this later.)
Then we have the additional problem that when directors do things that owners think are wrong, there is in most states no low-cost and impartial forum for addressing it.
So there is no feedback loop to hold owner-directors to a higher standard of knowledge and performance. If they screw up, they usually get away with it. The owners just lump it because the cost of objecting is far greater than the benefit. Then people say, "look how happy everybody is."
I think that legislatures should create some low-cost education and dispute resolution arrangements, rather than prescribing Byzantine systems of rules. That just compounds the problem of the gap between expectations and performance. I realize that in CA there is an effort to use small claims court for HOA disputes, and I want to see how that pans out. It may be a good approach.
A little disingenuous to suggest that there is "government by anecdote."
If you google a little, you can find the discussions in the California legislature about the hundreds of thousands of complaints they got that finally pushed them into action.
Yes, I just got home from a frustrating meeting where the Board of Directors wasted another three hours talking over maintenance procedures that none of them understood. As a former maintenance supervisor, it was eerie.
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