Sunday, March 2, 2014

HOA Disclosure Laws Provide False Sense of Accomplishment

Our Colorado legislature will pass more "disclosure" laws in 2014.  Disclosure laws are intended to ensure all information about a transaction is exposed guaranteeing the parties involved in the event are not deceived and have all information to make a sound decision.  In law making, however, disclosure Bills can present a false sense of accomplishment.  They appear forceful, problem solving and protective of rights but in reality are meant to preclude change.  They are too often the result of Bill sponsors caving into interest group pressures to remove that which could affect change.  The Bill is rewritten to exclude any enforcement provisions.  Disclosure Bills are more often than not ornamental, administrative, and empty and provide a false sense of accomplishment.   Most HOA laws are disclosure types.  They direct the HOA or property management company to document but not change the practice and fail to address enforcement.  The HOA Transfer Fee Disclosure Bill exemplifies this illusionary legislative tactic.  The transfer fee is known to be abusive, excessive, and misused and the original Bill had a defined solution.  It was changed to a disclosure Bill.  Now the abusive practice simply must be documented but nothing in the Bill will stop the practice.  Even HOA laws addressing release of records to home owners or rules for elections are ornamental.  The laws are well intentioned and defined and require documentation and disclosure but are absent of enforcement from the home owner’s perspective.  Legislators can feel good and boast about their vote but in reality they supported more of the same.  Thus, disclosure laws require documenting the problem to be solved but do little to change it.  The next time you read about passage of a “disclosure” Bill know that it is in reality a law in which its' original intention and effectiveness has been watered down or removed to ensure continuation of the practice intended to be corrected.

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