Posted:
Feb. 14, 2011
Justice John Zebrowski, Chair
California Law Revision Comm.
Dear Justice Zebrowski,
Thanks for your work to improve Davis Stirling. I think it is irredeemable. Specifically, it fails to address the concerns of small associations, half of all HOAs in California. It also protects the interests of the HOA management industry to the detriment of actual homeowners. And it fails to provide a practical dissolution procedure. While the commission's work is primarily technical in nature, those of us whose lives have been significantly and negatively altered by Davis Stirling plead with anyone we can for relief from this onerous albatross. You are well aware of the conflicting civil, corporate and other regulations Board members must wade through.
In my personal case, a fellow homeowner in my HOA has sued on alleged improper election procedures. One of the top management firms in Sacramento managed our election. Even they were not aware of the requirement for something called "election rules" and so our three member volunteer (i.e., dragged kicking and screaming) board and their spouses work almost full time meeting with lawyers, pouring through documents and adjusting our expectations for retirement. We have spent well in excess of 100 thousand dollars on lawyers. We are a six unit association and our monthly dues per home are $2000. I will say it again. Every day each household writes a check for $50 to lawyers, since around $1500 per home is just for lawyers. Every month. Every home. No cruises. It is an absurd penalty for alleged minor Davis Stirling compliance issues.
Our plaintiff pays no dues or assessments. And we have been advised to lien her house would be more trouble than it's worth because of the lawsuits. We did go to court to try to collect dues a while back, and after winning in small claims, our de novo judge said it was all "too complicated" and rescinded our judgement. There's a pattern here. Nobody can figure this stuff out.
D&O insurance? Our Directors and Officers Insurer, Farmers, assured us that they would take over if a lawsuit was filed. They did not, claiming insurance does not cover defense costs when the plaintiff asks no damages.
I have pleaded with my own representatives in the legislature and many others for help. The groups you think might represent my interests in the legislature (CAI, ECHO etc.) certainly do not. They are industry trade groups dedicated to the preservation of the badly written, disastrously amended Davis Stirling. Does it really seem logical that a six unit association who used to gather once in a while to decide which plant goes next to the driveway should now employ three lawyers and a property management company? Our "manager" writes a few checks; they pay the gardener, utility bill, the insurance company and..........mainly.........the lawyers.
Among Davis Stirling's worst provisions is that individual homeowners are liable for judgements against and costs of the association TO THE FULL EXTENT OF THEIR ASSETS. In an age when the wealthy are walking away from their mortgages because they no longer think homes are good investments, where is our "walk away"? We can't.
The law can follow us to collect against personal assets because of the malfeasance, ineptitude or just plain honest mistakes by our volunteer board. Few condo buyers realize they are going into a business with people they do not know and are liable for their mistakes. We all now face bankruptcy because one homeowner with a grudge decided to use the law to ruin us.
The real estate industry, lawyers, and HOA managers seem to have more sway with legislators than do homeowners. Please be the voice of sanity and conscience and help us little guys. We are drowning in laws that have ruined our plans for own lives. Moving the sections around and correcting for clarity is all well and good but deck chairs on the Titanic come to mind.
Thank you.
Lois Walker
River Landing HOA
1413 Garden Hwy.
Sacramento, Ca. 95833
916 804 7541
CC. Norma Torres, Chair
Assembly Housing and Community Development Comm.
Mark De Saulnier, Chair
Senate Transportation and Housing Committee
Sen. Darrell Steinberg
Senate President Pro Tem
Dr. Richard Pan
Assemblymember, 5th District
Brian Hebert, Exec. Secy.
California Law Revision Comm.
Marjorie Murray
Ca. Home Law