Legislators shift tactic on HOA reforms

Article Courtesy of The Arizona Republic
By Chris Fiscus
Published Feb. 9, 2004 

One bill would make homeowners associations wait seven years before they could foreclose on a home for unpaid fees. Another would apply the open-meetings standard used for governments to HOAs. 

Still others would open up the books to residents while making it easier for homeowners to speak out at meetings. 

At least 17 bills have been pitched in the Legislature to try to reform HOAs, and lawmakers say some from the current crop have a strong shot at reaching the governor's desk. 

"The pressure is there. The people are tired of it," said Rep. Chuck Gray, R-Mesa. "It's come to a head because of some HOAs trampling over homeowners."

Gray alone is proposing six HOA reform bills. "This is not a mud puddle that I wanted to wade into," he added, but residents asked him for help. 

There's also a different approach at work these days. In recent years, lawmakers tried to craft a massive reform bill that touched on countless aspects of associations. That failed. Some considered that a lesson learned, and this session offers a slew of narrowly focused bills, each addressing a specific HOA concern.

Those pushing for change are careful to note that they are going after the "oppressive" associations, not all of them. But some fear that in trying to curb abuses by a few, the proposed laws could harm many.

"I think we do it right," said Paul Monaghan, president of the Arrowhead Lakes HOA, which represents more than 1,000 Glendale homes. 

"The architectural review committee operates in front of everyone, the board operates in front of everyone," he said. Consider all of the financial 

HOA bills and you 

To track the progress of the homeowners association bills, or other bills, at the Legislature, go to www.azleg.state.az.us

To make your voice heard: 

House Majority Leader Eddie Farnsworth: (602) 926-5735. 

Rep. Chuck Gray, R-Mesa: (602) 926-5495. 

House Speaker Jake Flake, R-Snowflake: (602) 926-5219. 

Senate President Ken Bennett, R-Prescott: (602) 926-5584. 

records and other information given out to residents, he said, and, "we probably send people more than they want."

If anything, he adds, many of the association's members demand more enforcement. "They say, 'We want you to enforce stronger, harder, faster.' "

There is an increasing interest in the Legislature to take action. There are more bills introduced, more lawmakers signing onto those bills, even lawmakers testifying about their own HOA nightmares during hearings.

"I think everyone down here knows HOAs are an issue that has to be dealt with," said House Majority Leader Eddie Farnsworth, R-Gilbert. There is growing support "for reigning in these quasi-government entities."

HOAs can be a police force of sorts with the power to foreclose on homes. 

"That's a tremendous, tremendous power," he said. "It has been abused by people with very little accountability."

The proposed bills include:

Farnsworth's House Bill 2402, which would make HOAs wait at least seven years from when a lien is recorded before foreclosing on a home for unpaid fees. It also would require that the house be sold for fair-market value, rather than at a fraction of its value at auction as is now often the case, to try to protect a homeowner's equity. His bill will be heard this week. 

House Bill 2381, which would block association board members from entering into contracts that would benefit them or their relatives. The bill is in response to concerns about boards handing lucrative management, landscaping, construction or other contracts to relatives.

House Bill 2378, which would apply provisions of the state Open Meetings Laws to HOAs.

House Bill 2177, which would make it easier to view association records and speak during HOA meetings.

The bill would allow members to have designated representatives at association meetings and would allow any attendees to speak. It also would change the criteria for when a meeting can be closed.

Other proposed bills would tackle HOA rules such as allowing residents to display political signs on their property (some now prohibit the signs) or remove the use of proxies in HOA voting. 

Four of Gray's HOA bills cleared a House committee last week and will be heard by a new committee today. 

Other HOA bills are pending in the state House and Senate.

Pat Haruff, a retired businesswoman who lives in Mesa, spent the better part of four years lobbying at the Capitol and launched a grass-roots group to protect homeowners' rights from overzealous associations. 

She said the various bills have a better shot at surviving this year.

"A message is finally getting to the legislators," she said. "They're finally beginning to listen to reason."

She also applauds the one-slice-at-a-time approach to reform. "What happens when you get a huge bill, 25 or 30 pages? The bill usually dies because there are so many issues and so many conflicts, they don't know what to do with it, so they just vote it down." 

But this time, she adds, "This is our year."