Law limits homeowners associations

Measure makes it harder to transfer communal land

and requires records to be open.


Article Courtesy of The Sacramento Bee

By Terri Hardy

Published October 14, 2005

For more than two decades, a Natomas homeowners association has allowed some residents to boost their property values and move their fences onto communal property - a practice that sparked threats of lawsuits and allegations of conflicts of interest.

Now under a new law authored by Sacramento Assemblyman Dave Jones, any homeowners association in California must gather approval from two-thirds of property owners if they want to offer up communal land for exclusive use.

"This situation was ripe for abuse," Jones said. "If they could take common area through a simple majority vote ... it just didn't seem fair."

The new law, to go into effect July 1, 2006, also requires homeowners associations to allow members to inspect their accounting books and board minutes.

It was sponsored by the California Alliance for Retired Americans. Alliance lobbyist Marjorie Murray said the Jones bill was an important piece of consumer protection legislation.

"It lays out a fair process for making decisions about common areas," Murray said. "And it's especially important for seniors, who want to know how their precious dollars are being spent."

Jones took up the issue after The Bee wrote a story about the contentious issue at Swallows Nest, a gated enclave of 253 homes off Garden Highway.

Deborah Howard, a member of the Swallows Nest Homeowners Association board, has defended the practice, saying it provided "elbow room" for homeowners with small lawns. Since the mid-1980s, at least 38 homeowners had been allowed to move their fences onto communal property at Swallows Nest.

A few homeowners earlier this year protested the decision, claiming the extra land was granted to a select few and could be used by board members themselves to extend their properties.

Karen Pardieck was one of those critics. She worked with Jones on the bill and praised the assemblyman's responsiveness.

"This law will curtail actions of self-serving board members and result in board decisions beneficial to the entire community and not just a few," Pardieck said.

Neither Howard nor Ray Resler, an adviser for Swallows Nest's management company, returned calls for comment.

During this year's controversy, Pardieck and two other Swallows Nest residents ran write-in campaigns challenging incumbents on the property giveaway.

Pardieck was narrowly defeated, but was appointed to the association's architectural committee. Soon after, Pardieck said, the board removed her from that position.

"They said I could not be trusted because I had gone to The Bee with my concerns," said Pardieck, who recently moved from Swallows Nest in order to care for her elderly mother.

Jones' bill also addresses an issue at the heart of a feud in Roseville between a property owner and his homeowners association. Don Chaney has tried unsuccessfully for more than a year to review invoices for purchases made by his Sun City Roseville Community Association.

Chaney said the new law would allow residents quick access to homeowners association records and pressure the organizations to make the information available.

"My association always has taken the position that an invoice is not an accounting record, but I think they just didn't want to provide the information," Chaney said.

Earlier this month Chaney won a small claims suit that forced his homeowners association to produce detailed financial records for review. Chaney said he still hasn't seen the documents.

Sun City Community Association President John Sullivan has stated that the organization won't appeal the decision and will be responsive to the new law. Sullivan said the association would "attempt to do what is right."

Sullivan did not return calls for comment Thursday.

Jones said he heard "lots of horror stories" about homeowners association abuses and decided legislation was necessary.

"I was struck by the fact that 8 million Californians live in common interest developments," Jones said. "These associations function like many governments, but homeowners don't have the same types of protections."

Jones' bill received unanimous support in both the Assembly and Senate and was signed into law by the governor.