Article Courtesy of The Arizona Republic

By Cary Aspinwall

Published July 5, 2005

 

New state laws for homeowners associations might have saved Michael Moulton and his neighbors a lot of trouble, if only they had taken effect a few months ago.

Moulton, who lives in Chandler's Carino Estates, was among dozens of homeowners who said they were misled last year into signing what they were told would be non-voting proxies "for quorum purposes" in a board of directors election. Candidates and their supporters later filled in names to influence the election, he said.

Residents' accusations of proxy tampering forced a second election.

"The way the proxies were written, they could use them to cast votes for themselves, and that's not right," said Moulton, who applauds a new state law that outlaws proxy voting in homeowners associations.

On Aug. 12, proxy voting will be outlawed. It is a change that will mean less opportunity for voter fraud and fighting in the more than 10,000 HOAs in Arizona, both residents and experts say.

The change is part of a HOA rules reform package that was passed under House Bill 2154, authored by Rep. Chuck Gray of Mesa.

HOA reform bills have been on the increase in recent years, but real problems were not being solved, Gray said. Last year, there were at least 19 bills regarding HOAs, three of which Gray authored, with six making it to the governor's desk, he said.

This year, Gray said he worked with consumer groups and HOA management groups to develop one bill that would fix the most widespread and serious problems.

The biggest impact of HB 2154 will be eliminating proxy voting, spelling out a simpler process to remove HOA board members and requiring HOAs to apply homeowners payments to unpaid assessments first.

"Having been swimming in the HOA deep water for quite some while, I would say that about 10 percent of the HOAs were causing 90 percent of the complaints," he said.

Pat Haruff, president of the Coalition of Homeowners for Rights and Education, said the problem is more widespread than state officials realize.

"Out of the more than 10,000 HOAs in Arizona, I'm willing to bet that more than 9,000 are plagued with these kind of problems," Haruff said.

As a vocal advocate for homeowners rights, she said her phone rings every day with calls from frustrated homeowners with HOA problems.

"It's constant," Haruff said. "The Secretary of State's Office refers people to us because nobody helps them but us."

Valley attorney Curtis Ekmark said that many problems could be solved through better education for homeowners and HOA board members.

With a slate of laws passed each year, it becomes more difficult for a homeowner or board member to keep up, Ekmark said.

For an HOA resident or board member, understanding what laws mean can be a bit like reading an operations manual written in Latin. There are seminars, manuals, classes and luncheons devoted to explaining the nuances and complications of the laws.

"There are so many HOAs that are going to end up violating the laws because they don't know about the changes," Ekmark said.

Haruff said it's the responsibility of board members to keep current with the law.

"All of these boards are going to be in a big huge shock," she said. "I wish I could be in some of those boardrooms when they get the word."

All parties say there's more work to be done in HOA law, but the debate continues on which are most needed.

"This bill fixed a lot," Gray said. "These are quasi-governmental agencies and the new laws will require them to operate on a level playing field."