Article Courtesy of The Sacramento Bee

By: Lakiesha McGhee
Published January 25, 2005

The Rocklin resident says living in a homeowners association can cause problems that often call for attorneys and high court costs, which many people can't afford. Rules and laws governing associations also can be confusing, he says, and the regulations have loopholes that leave room for interpretation - and disagreements.

"Some people really think we have a choice in whether or not we live in a homeowners association, but we don't," Robinson said Friday after speaking in front of the California Law Revision Commission.

He supports the commission's proposal to create a state bureau to oversee California's more than 36,000 homeowners associations, which are growing in numbers, wealth and power.

The commission met at the Capitol on Friday to discuss public response to its plans.

After considering written and oral testimony, the panel found the public generally favored the idea of the new bureau. However, the commission said more research is needed before presenting a final recommendation to state lawmakers.

"I don't want to see this project stalled or delayed because the public sentiment seems to be in support of it," said the commission's Vice Chairman Edmund Regalia. "But I do agree we want to have more data."

The commission is scheduled to hold an informational hearing March 9 before the state Assembly and Senate housing committees.

Brian Hebert, the commission's assistant executive secretary, said additional ideas and suggestions from the hearing will be used to refine the proposal.

According to the commission's tentative recommendation, the bureau would be funded solely by fees from homeowners associations and operated as a five-year pilot program under the state Department of Consumer Affairs.

The bureau would help educate officers of homeowners associations and residents about their legal rights and obligations. It would collect data and anecdotal accounts of abuses, provide mediation outside the courts and, as a last resort, issue citations for violations of the law.

Over the past few months, the commission has collected about 50 responses to its proposal.

Most of the input came from individuals, but a few comments came from groups, such as the Common Interest Development Bill of Rights Coalition, the California Association of Community Managers, and the Community Association Institute's California Legislative Action Committee.

Hebert, who fielded many of the comments, noted opposing views concerning the state assisting homeowners associations.

The primary concerns involve how the bureau would be funded and managed and whom it would serve.

He said some people also expressed distrust of the proposed state agency, saying it could be biased in its decisions and not have the best interests of homeowners at heart.

In a letter to the commission, Darell Baxter of Gold River said, "We do not want to pay additional homeowners dues to pay someone to deal with a new government agency, nor do I want my tax dollars spent on more state control."

Marjorie Murray, of the Common Interest Development Bill of Rights Coalition, voiced concerns that a $10 annual fee per household to fund the bureau would not be distributed equitably among those who would access its services.

She said the current proposal leaves homeowners to bear the costs alone.

"If anyone needs to be regulated or have oversight, it's the agents of homeowners associations, including the collections agencies, the property managers and attorneys," Murray said.

Hebert agreed that more information is needed to analyze the cost of the bureau but said tapping the state's general fund would not be feasible.

According to the commission's proposal, the $10 fee would produce $30 million in revenue a year, which is comparable with budgets of similar agencies in other states and jurisdictions.

An ombudsman program for homeowners associations in Nevada, however, charges $3 per unit per year, according to the commission's reports.

The Nevada ombudsman handles 3,000 complaints annually.

Beth Grimm, an attorney, said she is concerned that the proposed bureau would create unrealistic expectations.

For instance, the bureau only would have power to enforce what's called common-interest development laws.

It would have no authority over an association's governing documents, known as covenants, codes and restrictions.

Hebert said the bureau would not have the power to stop a foreclosure on a home for unpaid association dues, which is the type of emergency response some home owners are seeking.

Associations vs. homeowners

November 2003: Fair Oaks homeowner Ken Murray replaces his wood shake roof with a material Sacramento County fire officials view as safer, but his homeowners association sues, saying the new roof violates the association's rules. In February, the Westridge-Fair Oaks Homeowners Association settles its lawsuit: Murray agrees to replace his new roof to avoid the even higher court costs.

December 2003: A Calaveras County homeowners association forecloses and sells Thomas and Anita Radcliff's home in Copperopolis. The reason? The retired couple had failed to pay $120 in association fees due in January 2003. The Radcliffs testify at the Capitol, helping to spur a bill that would have banned associations from foreclosing on homes for debts less than $2,500. But Gov. Arnold Schwarzenegger vetoes the bill, which associations said would put them in financial danger.

September 2004: Rocklin homeowner Larry Robinson tells the California Law Revision Commission he faces problems interpreting the rules of his homeowners association. He says the Springfield at Whitney Oaks Homeowners Association forced him to remove tiling from his front yard, even though it was not visible from outside his property. Robinson says he almost resorted to court action but couldn't afford the $25,000 it would cost.

December 2004: Foothill Farms condominium owner Jody Falty complains she has been fined $150 for allegedly allowing her cats outside without leashes. The Village Greens Condominium Homeowners Association enforces its pet-leash rule with a $50 fine per violation. Falty's situation attracts the attention of homeowner advocates and state lawmakers.