California Senator Jackie Speier To Oppose AB555
Bill seeks monopoly in the management of HOA
MAY 12, 2002
Article Courtesy of AHRC News Services 
By Peter Amherst
Sacramento, California 

State senator, Jackie Speier (D - 8th. Senate District), has added her voice to those opposing AB 555, calling it " A Seriously Flawed Proposal". 

AB 555 (John Dutra-D-20th assembly district) is a bill that would authorize private commercial interests that are engaged in the management of homeowner associations to set up a licensing agency for homeowner association managers that is exclusively under their operation and control. Furthermore, the bill would grandfather in these commercial interests, exempting them completely from the educational requirements of licensing. Several of the commercial interests pushing this bill through the Assembly already operate the very schools that would be the sole provider of the licensing courses. It is estimated that these commercial interests would profit handsomely from this self-dealing bill. 

Critics of the bill are aghast both at the sheer naked self-interest embodied in the bill, and the fact that such a bill could even appear in the California state legislature after a decade of attempting to clean it up. Senator Speier labeled the proposed state licensing agency as "a private organization run for self-interested purposes". She further described it as "simply private enterprise engaging in anti-competitive business practices". 

The author of AB 555, Dutra, says that the bill is needed to protect homeowners in homeowner associations from unethical and incompetent managers. Critics respond that that this is like putting the fox in charge of the chicken coop. They point to the example of the now-bankrupt Marquis Management company that used to be the largest management company in Southern California. It belonged to all the same organizations that are promoting this bill, but it had a sophisticated scam going that defrauded homeowners of hundreds of thousands of dollars. Some of its key employees now work for the very same companies that are promoting this bill, and whom the bill would automatically certify as being ethical and competent. 

Senator Speier stated that: 
"In its current form, the bill would establish a nonprofit organization with all the bells and whistles of a government agency - - - - - - - -While the entity is, in fact, a private nonprofit, the exercise seems to be an attempt to put the imprimatur of state legitimacy on a largely privately- developed curriculum and licensing process." 

As there are 7 million Californians who live in homeowner associations, the bill's impact would be massive. Thousands of small management companies face the prospect of being wiped out by their competitors - the large corporations that currently dominate the homeowner association management scene. It is these very corporations that would be ruling on the certifiability of these small management companies. Many homeowners fear that once these large corporations put the small management companies out of business, the large corporations will be free to unilaterally and radically raise their prices. Homeowner critics say that this bill oink..oink..oinks like a pork barrel bill should. 

Homeowner advocate groups are strongly in favor of the licensing of homeowner association managers, but not by homeowner association managers. Homeowners want a stringent educational program conducted by an impartial, professional, public educational institution such as a community college or university. They want a homeowner oversight committee that will be able to quickly and effectively discipline managers who violate a common set of ethical and legal standards. They point out that the present proponents of AB 555 quickly lose interest in a licensing bill when they hear about such homeowner proposals. 

Many homeowners cannot fathom why assemblyman Dutra is pushing such an anti-homeowner bill. However, some of the homeowners who have been in the trenches for over 10 years on these issues point out that former assemblyman Dan Hauser was wined and dined by the very lobbyists who are behind AB 555 on the night before a bill hearing. On the following morning, as chair of the Assembly Housing Committee, he would push through legislation that lined the pockets of the lobbyists. These homeowners say that a few dollars on wine and food was never such a great investment. 

As the fight gears up in the state legislature, homeowners state that they have drawn a line in the sand. After decades of anti-homeowner legislation, they say that they are committed to opposing this bill to the hilt. They say that they smell corruption behind this bill, and that they are determined to expose it to the clear light of day, even if it means asking the Department of Justice for an investigation. 

Legislators remember the undercover FBI investigations that resulted in some of their colleagues going to jail. Many homeowners say that it is time for heads to roll again. 

Please click here to read CA Bill AB 555 and all related documents!