1 HOA United, Proposed Legislation DRAFT Legislative Advocacy Summary
Common Sense for Common Interest Community Homeownership2 EXPAND and COLLAPSE the list using the quick filter funnel located just below ‘Edit’ in the upper-left hand corner. 3 H 1 A single statute to govern common interest communities (CICs) in each state 4 H A uniform state statute for CICs reduces administration, confusion, friction and legislation and promotes uniform expectations and governance. All forms of common interest communities benefit from the same fundamental governance requirements. Reference UCIOA implemented by Alaska, Colorado, Connecticut, Delaware, Minnesota, Nevada, Vermont, Washington, and West Virginia. 5 H 2 Accountability with readily available enforcement mechanisms 6 H Homeowners, volunteer leaders, associations and their most involved vendors (management companies and attorneys) must uphold the law and governing documents. Private legal representation and lawsuits are expensive, time-consuming and ultimately unaffordable, untenable and/or inappropriate mechanisms to enforce reasonable standards.
“We have wonderful laws on the books, but if there’s no access it doesn’t matter.” – Senator Manka Dhingra WA Legislative Session February 20227 C Homeowners are third-party beneficiaries to contracts with a managing agent WA HB1569 8 C Specific remedies for statutory non-compliance California Florida Florida – II 9 DET >> Failure to disclose meeting minutes and other records. California Colorado Florida 10 C Requirement to engage in alternative dispute resolution (ADR) California Florida Colorado North Carolina 11 C Governmental authority to enforce violations Arizona Maryland Maryland – II Indiana 12 C Small claims for damages and monetary relief <$10,000 California 13 H 3 Foreclosure protections 14 H Due to a variety of lax state regulations, some homeowners have been forced into foreclosure for owing as little as $200 in delinquent assessments. Attorneys’ fees can add thousands of dollars to create delinquencies over 1,000% higher than their starting balance. Surging housing affordability crises and rampant challenges addressing homelessness need solutions starting with keeping CIC homeowners in their homes. 15 C Mandatory plain-language notice with recommendations and minimum requirements Washington 16 C Past-due assessment-specific minimums Washington 17 C Moratorium on interest and penalties until a dispute is resolved? Show an example 18 C Small claims court for amounts up to the jurisdictional small claims limit. California 19 H 4 Enforcement due process and limited, reasonable penalties 20 H CICs act as hyper-local governments to enforce their governing documents, yet their authority to do so in a reasonable manner often fails to comply with standards imposed on other forms of government. The US Supreme Court acknowledged the need for “the protection against excessive fines” in Timbs v. Indiana (2018). 21 C Specific due process requirements North Carolina 22 DET >> Notice with not less than twenty (20) business days to respond 23 DET >> Opportunity to be heard and present evidence 24 DET >> Formal notice of a decision 25 DET >> The right to appeal decisions of an adjudictatory body to the full Board of Driectors 26 C Strictly limited penalties for enforcement of violations of the governing documents. Colorado Florida North Carolina 27 DET >> Specific remedies for violations related to health, safety and of an ongoing nature 28 C … 29 H 5 Precise election processes 30 H Common interest communities are governed by directors, most or all of whom are homeowner member volunteers. Legislating the “who, what, where, when and why” provides for fair, impartial elections. 31 C Reasonable notice California 32 C Equal access to resources California 33 C Freedom of expression Examples California 34 C Minimum requirements for serving as a volunteer director Florida Florida – II Texas Florida – III – HB919 35 C Independent inspector of elections California 36 H 6 Open meetings and reasonable notice 37 H The importance of acountable and transparent corporate, nonprofit and governament and has been realized by 38 C Notice for meetings of the Board, Committees & Members UCIOA Florida 39 DET >> 14 days notice OR a calendar of scheduled meetings 40 DET >> Notice >= 2 business days before every meeting must include all agenda items Florida 41 C Opportunities for homeowner comment Arizona 42 C Notice for rule-making and related violation and enforcement policy changes 43 DET >> Pre- and post-approval notices UCIOA 44 C Notice for changes to assessments of any kind UCIOA 45 C 46 H 7 Financial stewardship 47 H Shared financial responsibility in the form of assessments that pay for common obligations (buildings, green spaces, ponds, roads, etc.) are THE reason CICs exist. When finances get out of control, things fall apart. 48 C Reserve study requirements 49 DET >> Required annually WUCIOA Florida 50 DET >> Must include all infrastructure and components with a useful life <= 75 years Florida 51 C Minimum annual reserve contributions and cash-flow levels 52 DET >> Reserve contributions >= 10% of the annual operating budget 53 DET >> Minimum cash flow to avoid foreseeable special assessments, NOT “full funding” Example Study 54 C Annual operating budgets must be ratified by the owners WUCIOA 55 DET >> Requires notice and allows a majority of owners to reject the board-approved budget 56 H 8 Transparency through detailed record-keeping and disclosure 57 H CICs function as both nonprofit member corporations and hyper-local governments that must maintain detailed records and provide for disclosure. 58 C Precise record definitions Records Policy WUCIOA California Colorado 59 C Minimum requirements for meeting minutes Texas 60 C Free and frictionless electronic disclosure for the most common records Florida 61 DET >> Ensuring that the entire Board receives the same information Colorado 62 C Governing documents must be published on a centralized website or web portal Florida 63 H 9 Purchaser disclosures 64 H Homeowners need to understand what they’re purchasing before entering into a binding contract for the single largest assest they may ever own. 65 C Plain language disclosure detailing the general nature of CIC obligations Colorado 66 DET >> Additional educational material about the basic functions and needs of CICs 67 C Explicit resale document disclosure requirements WUCIOA 68 C … 69 H 10 Education 70 H … 71 C Required Volunteer Board Member Education Maryland Florida 72 C Optional Homeowner Educational Materials Maryland 73 C …
