Saturday, December 27, 2014

Misrepresenting who Represents HOAs and HOA Home Owners

The latest misrepresentation of who represents HOA home owner's interests comes by way of Colorado Public Radio (CPR) and their article "Could limiting defect lawsuits bring more condos to Denver?" .  The article's point person for an opinion on what is best for HOAs and thus HOA home owners is no less than the Community Association Institute (CAI).  The problem is that this organization doesn't and never has represented HOA home owner's interests.  Their members are property managers (PM) and lawyers not HOAs or home owners:  let's get it right!   The CAI spends time and money in State and Federal legislatures lobbying to ensure legislation promotes their interests and mostly at the expense of HOA home owners rights and wallets:  against ending/limiting of the unjustified and illegally applied HOA home sale transfer fees costing HOA home owners millions each year (pocketed by CAI members not HOAs);  oppose limits on fees, fines, and add-on charges on HOA home owner debt (a million dollar+ income supplement to property managers and HOA lawyers and not a dime to the HOA);  blocking efforts to implement a recommendation in a Colorado State study that supports out of court dispute resolution for home owner complaints that would save HOAs and home owners in legal costs and not require lawyers to settle disputes;  and opposing legislation that would require home owner approval prior to using HOA funds on costly litigation or major capital expenditures.

When our State legislature and regulatory agency required guidance on writing legislation, guidelines, and ethical standards to implement a new law to mitigate abusive practices in the  (PM) industry they relied on the CAI for expertise.  Licensing is implemented to protect homeowners against the abusive practices of PMs (the CAI's members) so why the undue influence in writing rules from the very industry that caused the problem in the first place?  This is what happens when an organization is accepted to incorrectly represent HOA home owners.
Then there is the CAI's objection to a requirement in the proposed construction defects legislation that mandates home owners vote on the use of their HOA funds prior to the HOA entering into costly litigation.  This would effectively decrease the number of HOA law suits, ease of access to HOA bank accounts enjoyed by HOA lawyers, and save HOAs millions each year in litigation costs (but the CAI is only protecting home owner interests, right!)

Just one more example to seal the case on misrepresenting the CAI to be home owner centric.  This involves their lobbying efforts with FHA/HUD and the State legislatures to allow the continuance of the abusive HOA home sale Transfer Fee.  The fee is charged by, amount determined by and retained by property managers in the sale of a residence in an HOA to prop up PM income: no benefit to the HOA.  If not paid at home closing it can preclude the home sale.  What else it can preclude is FHA/HUD loan approval/insurance on home sales as HUD doesn't allow the presence of these fees in the home sale transaction.  Thus this fee can dampen home sales and the building of affordable housing that benefits from  HUD loans.

CPR is not alone in getting who or what the CAI is wrong.   The Denver Post, our legislators, television, and other media outlets are all equally wrong.  When confronted they seem to be unaware of who or what the CAI represents, their legislative actions, how they make their money, and who are their paying members.  Informed and accurate reporting and legislating would ask these questions. Interesting to note that when the media indicates the CAI represents HOAs and home owner's organizations they can't or don't try to identify just one: there aren't any!  This ongoing, unquestioning and inaccurate practice of who or what represents home owner's interests is problematic and detrimental to home owner interests and ensures the governance and oversight of HOAs will continue to be skewed against home owners until the media and legislators get it right.

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