Monday, July 03, 2006

DaVaro Deception: An Argument for NO! NO! NO! ON AB SEVEN, SEVEN, OH!

The best argument we can present against AB770 can be found in the performance of Coto de Caza board of directors led by Varo/Mezger/Hill

NO! NO! NO! ON AB770
AB770 is SB551 in drag masquerading as CAI's full employment act
July 03, 2006
By Donie Vanitzian (View author info)

Los Angeles, California -

The message is clear: Do not buy a condominium, townhouse, co-operative, mobile home, or single-family dwelling if it is located in a common interest development, has a homeowners association, and a board of directors. Don't do it.

If you have a deed-restriction on your title, sell and get the hell out while you are able. That is, before this legislature passes more bad bills and you are stuck paying for their mistakes and it becomes impossible to extricate yourself from this type of property ownership. If the legislators are serious about giving owners a bill of rights, they need not look far. They must:

1) Codify penalties against boards, management company owners/personnel, and ass. attorneys;
2) Codify the disclosure of "risks and liabilities" to all potential buyers;
3) Enlist the assistance of the State Bar of California to make filing complaints against ass. attorneys less intimidating, and with measures preventing retaliation against complainants;
4) Codify an owner "victim fund" consisting of prompt restitution to the harmed owner because of an association's wrongdoing;
5) Codify a "Lemon Law" that allows a 'no questions asked' 14-day return of deed-restricted property to the seller. This already exists in California time share statutes;
6) Allow owners to tax-deduct all assessment payments made to the association for any reason;
7) At the time of sale, refund to the owner all monies paid into the association's reserve account with interest.


Have you noticed how none of these Senators and Assemblypersons can write a SHORT bill that encompasses only "one section" of the statute? Mullins bill "amends" Civil Code section 1373 to ADD another Civil Code section 1363.7, and ADD another Chapter (11) to the Civil Code.
All of the recent bills are adding bulk to the statutes. They are road hogs eating up space because the legislator wants his or her name in the books. We all PAY the price for their narcissism and arrogance, let alone their sell-out to campaign contributors and contributions and heavy-handed influence in laws WE must LIVE by.

Owners are reminded that such industries do not have a "vested interest" in property. ONLY owners have a "vested interest" in property. Such industries have an interest in getting PAID - BY YOU. The industry's arguments in favor or against such bills, all revolve around industry goals.

It is imperative owners understand that a homeowner's disagreement with a bill is for fundamentally "different reasons" than an industry composed of parasites disagreeing with the same bill for "their own" reasons.

Aside from his inconsistencies, promises, and breaches, one of the unfortunate realities plaguing Democrat Assemblyman Mullin's flailing ombudsman bill is that he chose to adopt the industry's language which is notably attributable to Community Association Institute (CAI) and its long-arm lobby CLAC. Part of the language right out of the ombudsman bill states:

"Anecdotal accounts of abuses within common interest developments create continuing public demand for reform of common interest development law. This results in frequent changes to the law, making it more difficult to understand and apply and imposing significant transitional costs on common interest developments statewide. By collecting empirical data on the nature and incidence of problems within common interest developments, the Common Interest Development Ombudsperson provides a sound basis for prioritizing reform efforts, thereby increasing the stability of common interest development law."

Including that unprofessional and indefinable language shows a blatant disregard for the ownership rights of all residential deed-restricted titleholders. That language alone should be enough to ipso facto kill this bill-but homeowners will look aside and chant the same old tired refrain of "but we need something" or worse yet "something is better than nothing." No. "Something" is NEVER better than "nothing."


By supporting bad bills, owners are asking for "Folsom Prison CC&Rs." As with much of the bad bills we are witnessing making it to the California Assembly and Senate floors, AB770 is inconsistent with good government.

1) It fails to cap it's "own" expenditures;
2) Is funded only by one segment of property owners (residential deed-restricted owners) which amounts to double taxation without representation for this class of owners;
3) It continues to use nebulous, inconsistent, and indefinable language -- leaving itself open to challenges in court;
4) It prejudices homeowners rather than help them;
5) Worse yet, it "backdoors" the already FAILED Common Interest Development Bureau which was nothing more than a bank for at least ten other State Departments (many were unnamed in the proposed statute);
6) AND constitutes a guaranteed RISK to homeowner personal assets.

Where's the democracy in having bad bills like this rammed down our throats?


The ombudsman will limit the types of disputes it hears. Proof of this was garnered way back in 2003! At that time, the California Law Revision Commission published its recommendation regarding "Alternative Dispute Resolution in Common Interest Developments." It stated that such "disputes typically fall into one of several categories:" The problem? Though the following are pigeonholes created by the CLRC, they fall short of predicting what the ombudsman office will and will not categorize as "acceptable" disputes. Interesting that the CLRC feels confident that only THEY can determine what category disputes exist but they owners can't. Be prepared to be "pigeonholed" at the ombudsman's office too. They will make owners conform whether they want to or not.

(1) Financial disputes (maintenance, common charges, special assessments, fines and penalties, restrictions on resale or transfer, access to books and records).
(2) Architectural controls (repairs, alterations, painting, decor, landscaping).
(3) Pet issues (barking dogs, wandering cats, animal waste).
(4) Use of private space (leasing/subleasing, commercial or professional use).
(5) Personal interactions (facilities use, parking, noise, rudeness).

Nearly each of those problem areas could have easily been addressed with legislation meant to protect the owners' rights, but not one legislator felt it was important enough.

The California Law Revision Commission also stated that "good information is not available concerning the incidence of disputes of this type in California. They are not uncommon, however. Data is available from other jurisdictions in which there is government oversight of CID operations. That data suggests that a dispute reaches the point where it becomes serious enough to lodge a complaint approximately once per 200 dwelling units per year. In California, with its estimated 3.5 million CID dwelling units, that would yield about 175,000 "serious" disputes in CIDs each year."

Ask yourself, is that a good enough reason to tax deed-restricted titleholders to fund a bureaucracy that gathers data?


The goal of AB770 and its stepsister SB551 is to create administrative gridlock that the ass. attorneys and their firms will control and profit from. Logically, where do owners think the education propaganda will be generated? It is unlikely that the industry will allow the ombudsman to order copies of the book Villa Appalling! Destroying the Myth of Affordable Community Living, will they?


Aside from no cap on spending and no cap on fees collected from owners, there is no agency that owners can file complaints against the ombudsman. Watch for this legislative trick: the legislators will remove the word "fees" or lower the amount of fees in order to get the bill passed, but then add it back into the statute "after" the bill passes.


There is no cap on the department's spending. There is no cap on the fee amounts charged. There is no cap on the fee amounts collected. Owners: if there is no cap on these amounts, you will never know by how much your monthly assessments will be raised each month, each year. You will not be able to calculate your risks.


Presumably the ombudsman will be attempting to rectify the wrongs committed against owners who have a vested interest in PROPERTY. However, the ombudsman bill makes no provisions for restitution to owners for their injuries or harm done. Think about this closely. The owner goes to the ombudsman supposedly seeking a "resolution." The resolution might include restitution for injuries caused to the owner. Yet this bill is intentionally silent on that matter.


What is so difficult about imposing penalties against recalcitrant boards? This legislature will not do it. Short of that, the legislature should impose a moratorium on building common interest developments and impose a moratorium on adding additional legislation to the Davis-Stirling Act.


Read carefully, this bill like its wicked stepsister SB551, professes to have the power to impose fines on associations BUT ONLY IF they LOSE disputes with the owners-the obstacle course laid out in front of owners who might have used the so-called bureau, makes it impossible to accomplish "anything" in a timely manner, let alone get anything of substance actually "accomplished" at all.

Just like Nevada, Florida, Arizona (some defend Arizona's system, I do not for reasons that will not be furthered in this California paper), Virginia, Hawaii, and it goes on and on. All are black holes for unaccountable cash generated by no one else but owners.

Regarding the Nevada Ombudsman's office, someone told me "there is a surplus of several million dollars. The only money being spent is for state funded CAI seminars that work out to something like $5,000 per attendee, but 6, maybe 8 people attend."

After losing, Lowenthal chants the disingenuous democratic mantra: "Let's hear from the homeowners." Excuseeeeeeeeeeeeeeee me! Like he hasn't heard from homeowners! What planet is this guy on? Owners should seriously consider recalling Lowenthal from office.


This bill makes "fees," er, uh, strike that. This bill makes "donations" payable directly to the Secretary of State! There is no tax deduction for your payments to the Secretary of State for all these fee-reimbursing donations that go toward funding these bureaucracies claiming to help "you." In fact, there is no guarantee they will help you at all or that your grievances will be addressed. That decision will be decided by some bureaucrat who will tell you: "You don't have standing." "This is outside our jurisdiction." Those are the typical government catchall phrases for being able to collect money but not produce the goods.

Just what homeowners need: the bill admits there is a FISCAL IMPACT. The result of a fiscal impact is simple: It costs "owners" money. It doesn't cost the "public" money, it cost "owners" money -- this is not a fee that will be shared with the general public as all other Government Departments do. This is money that owners will pay directly to a special fee-collecting department AFTER they pay their monthly credit card bill$, car and home in$urance bill$, homeowner a$$ociation regular, $pecial, and emergency, a$$e$$ment$, student loan$, college tuition, health in$urance, gas$ water electric bill$, telephone$, ga$oline, car maintenance, car in$urance, doctor bill$, medication$, and on it goes.


Legislators keep asking for solutions, but frankly, THEY created the PROBLEM -- THEY need to FIX IT. One of the first things that needs to be done, is to require definitive and comprehensive disclosures OF EVERYTHING to all buyers. It is the BOARD that must be responsible for this, NOT the homeowner. In that way, the board can be penalized for nondisclosure NOT the owner. The owner can only disclose and provide what they know and have, nothing more. But the liability and risk is placed on the owner. This is unfair because all the evidence is in the custody and control of the board of directors.


A lemon law should be codified and applied to ALL residential deed-restricted property purchases, giving the buyers 14 days to "return" the mess back to the owner.


You want to resolve disputes without lawyers? The Davis-Stirling Act needs to include the State Bar of California Disciplinary committees to start clamping down on bad ass. lawyers and disbar them. Rather than closing their discipline files, hold those lawyers accountable for their actions.

Owners too, must file complaints against those lawyers whether they hired them or not, and you must keep filing those complaints until the bar gets the message: We are not going to take it anymore. (See


"Ombudsperson to ATTEMPT to resolve a dispute between an association and owner by conferring with the two parties to reach MUTUAL AGREEMENT"?
What does an "ATTEMPT" mean? Owners think that the Ombudsman WILL achieve a RESOLUTION, NOT an "ATTEMPT!"

Homeowners already have the kind of dispute resolution mentioned in AB770, for 'free,' at the Los Angeles City District Attorney's Dispute Resolution Program. Our tax dollars pay for this and there is no limit to the number of mediations an owner can request, nor is there a fee. It is FREE. (See, telephone (213) 485-8324).

Why do owners need a statute to create yet another dispute arena that only WE must pay for?


If you want to hear from the homeowners then STOP MAKING EXCUSES and ANSWER your damn telephone when constituents call and TALK TO THEM. They put you in office, the least you can do is hear what they have to say without a go-between.

Beating a dead horse. Loser Lowenthal vows to return next year with "enforcement and fines." Ha! Ha! Ha! Fancy that! Next year! He vows to return next year, to do what he could have done ten years ago but didn't have the courage to do; that is, impose penalties against the boards and management companies in the Davis-Stirling Act -- but homeowners don't hold your breath because it's a bunch of hot air.

I'm on the record demanding penalties against boards and management company personnel be written into the Davis-Stirling Act. Each year the legislature fails to do this.

Why do owners need a stinkin' "bureau" to accomplish this one-line item instilling penalties? Because Lowenthal and buddies like Mullins, typical of industry panhandlers, want to pork it up for us-the-owners who generate all the cash they feed off of. They do not want to impose penalties against boards and management companies when they can create a cash cow to fund them and their buddies at our expense. Such bureaus will not create millions in cash to pass around the various departments, they will create BILLIONS in excess revenue.


Statute: "Managing a common interest development is a complex responsibility."

Response: If it is, then the legislature had/has a duty to perform, at its own expense, its own demographic, sociological studies, and pilot projects PRIOR to imposing this type of ownership responsibilities on owners. They also have a duty to impose a moratorium on building.

Statute: "Community associations are run by volunteer directors who may have little or no prior experience in managing real property, operating a nonprofit association or corporation, complying with the law governing common interest developments, and interpreting and enforcing restrictions and rules imposed by the governing documents of the common interest development."

(a) Why did the legislature make it mandatory that owners belong to the association, and make it mandatory to pay fees at-will, and make it mandatory to lose one's home for failure to pay ANY assessment? It matters not, that the legislature finally addressed nonjudicial foreclosures: it is way too little and way too late. Understand that homeowners have lost their California homes, some for as little as an alleged $150 owing the association, most in trumped up fees and charges. Which makes even more interesting to learn that the Davis-Stirling Act was amended to CHANGE THE DEFINITION OF "VOLUNTEER." These "directors" are now "volunteers-by-the-new-definition" ONLY BECAUSE the legislature wrote that stipulation into the Davis-Stirling Act. The legislature also wrote into the law that association directors MUST be UNPAID volunteers or they will not be insurable, never mind that the ongoing kickbacks and barter campaigns continue unabated. For an association board of directors, "indemnification" amounts to a "License to Lie" that is subsidized by all owners.

(b) There is NOTHING in the Davis-Stirling Act that MANDATES that the owner receive governing documents PRIOR TO SIGNING A PURCHASE AGREEMENT/BUYING, these documents are guarded closely by associations so much so, that some owners even after purchase, still cannot get a copy of them - or worse - the copy they were given is inaccurate. Still, no penalties against boards who fail to follow the law. The only person who gets sued for not turning over such governing documents, IS THE SELLER, that is, the OWNER. Not the board.

Statute: "Homeowners may not fully understand their rights and obligations under the law and the governing documents."

Response: The reason homeowners may not fully understand their rights and obligations is because (a) they have no PER SE rights and (b) the legislature keeps changing the laws. Many owners do not have access to such laws and even if they did, the legislature has now made it so damn complicated that even lawyers and judges can't interpret it.

Statute: "Mistakes and misunderstandings are inevitable and may lead to serious, costly, and divisive problems."

Response: Thanks to the legislature, ass attorneys, boards of directors, and interloper management company owners and personnel, not to mention industry saboteurs such as interlopers like CCAM, CAI, ECHO, CLAC, and their spawn, it is no wonder why this type of living environment has become SERIOUS, COSTLY AND DIVISIVE. ONLY THE OWNER HAS SOMETHING TO LOSE.

Statute: "The Common Interest Development Ombudsperson seeks to educate community association officers and homeowners as to their legal rights and obligations. Effective education can prevent or reduce the severity of problems within a common interest development."

Response: If that paragraph were not so fundamentally serious it would be laughable. How a legislator can actually put pen to paper and have the nerve to write it, boggles the mind. Therefore, I won't dignify it with a response.

Statute: "The principal remedy for a violation of common interest development law is private litigation."

Response: That is just a damn lie. It is a lie because (a) the courts have been influenced by industry to the extent they are unequivocally swayed away from rulings in favor of owners and have consistently without justification granted deference to board decisions no matter how egregious or indefensible those decisions are -- this has discouraged much litigation brought by owners against the perpetrators of fraud committed against them; AND, the legislature has taken even the right to sue away from the owners. The only effective tool, that of litigation, was stripped from us. Owners can no longer sue for construction defects and can no longer sue in general, we are met with major diversions beginning by writing signed-return-requests to the board, then waiting. Writing for Requests for Resolution, then waiting. Writing for a Meet-and-Confer, then waiting. Being diverted to mediation, then waiting. Being diverted to arbitration, then waiting AND prejudicing whatever case we might have had. ALL of this costs money to the owner. Nothing is free. Nothing tolls the statute.

Statute: "The Common Interest Development Ombudsperson provides a neutral, nonjudicial forum for resolution of common interest development disputes. Many disputes can be resolved inexpensively, informally, and amicably through ombudsperson-facilitated mediation."

Response: This bill claims to provide a neutral FORUM -- NOT a NEUTRAL ARBITRATOR. NOT a NEUTRAL MEDIATOR. JUST A ROOM, FOUR WALLS. This is anything but "neutral." The fact that the ombudsman's department exists at all tells you that it is "not" neutral. Owners will be forced to hire an attorney because the ass. will hire an ass. attorney. What is inexpensive about that? What is neutral about that?


The bill states: "The Ombudsperson may convene an advisory committee to make recommendations on matters within the Ombudsperson's jurisdiction. A member of an advisory committee shall receive per diem and expenses pursuant to Business and Professions Code section 103. In selecting the members of an advisory committee, the Ombudsperson shall ensure a fair representation of the interests involved."

Response: Pay close attention to the fact that all the industry buddies will now obtain FULL TIME EMPLOYMENT WITH CALIFORNIA GOVERNMENT PENSIONS, HEALTH BENEFITS, VACATION TIME, ETC. Just like the inept California Law Revision Commission, these APPOINTMENTS are payback to industry parasites that will ensure the industry keeps its stranglehold on the laws by skewing data and rigging decisions against owners -- just like the court system. They will receive reimbursements, expenses, and SALARY. Any owner that believes an industry friendly ombudsman will ensure a fair representation of the interests involved, is out of their mind. If it were to be a fair representation, then the owners would pick these individuals, and frankly, there would be no need for an advisory committee.


Ombudsperson shall report annually to the Legislature, no later than October 1 of each year. The report shall include all of the following information:

(a) Annual workload and performance data, including the number of requests for assistance received, the manner in which a request was or was not resolved, and the staff time required to resolve the inquiry. For each category of data, the Ombudsperson shall provide subtotals based on the type of question or dispute involved in the request.

(b) Analysis of the most common and serious types of disputes within common interest developments, along with any recommendations for statutory reform to reduce the frequency or severity of those disputes. [this statement alone should tell owners that the legislature has not been listening to owner complaints]

(c) On or before January 1, 2009, the Ombudsperson shall submit recommendations to the Legislature on the following topics: (1) Whether the Ombudsperson should be authorized to enforce common interest development law. (2) Whether the Ombudsperson should be authorized to oversee association elections. (3) Whether the scope of application of Section 1380.230 should be narrowed or broadened. (4) Whether the Ombudsperson should provide or subsidize mediation of common interest development disputes.

Then, Civil Code section 1380.130 goes on to state, "On filing information with the Secretary of State every two years, pursuant to subdivision (a) of Section 1363.6, an association shall submit a Common Interest Development Ombudsperson FEE. This FEE IS IN ADDITION TO THE FEE submitted pursuant to Section 1363.6. Failure to submit the Common Interest Development Ombudsperson fee is deemed noncompliance with Section 1363.6. Costs incurred by the Secretary of State pursuant to this section shall be REIMBURSED from the Common Interest Development Ombudsperson Fund."


Yup! ANYONE can use the Ombudsman.

If ANYONE can use the ombudsman, then why doesn't the legislature make EVERYONE pay through their taxes to fund the ombudsman's department?
"Under the new proposed Civil Code section 1380.300 (a): ANY interested person may request that the Office of the Common Interest Development Ombudsperson provide assistance in resolving a dispute between an association and an owner that involves the law governing common interest developments OR the governing documents of a common interest development." [what's the legal definition of an "interested" person?]

Guess what? That means if the ass. or the ass's attorney wants their fees or costs, the ass. attorney can enlist the ombudsman to assist in collecting attorney fees against you! How stupid is that?! So much for helping HOMEowners.

It also means, that vindictive management companies will be utilizing a tool that was supposedly meant for homeowners, to "target" you instead.

It also means that persons [i.e., "interested persons"] will be utilizing the ombudsman's office that YOU WERE FORCED TO PAY through your association assessments - but that they did not have to pay.


There are hidden fees everywhere in this bill. Make no mistake, it is inevitable owners will be paying more every year. For instance, "The Ombudsperson MAY, by regulation, adopt a FEE for mediation services of not more than fifty dollars ($50) per mediation." [but no cap written into the statute]

Then another section in the same statute says "The Ombudsperson may contract with private parties to provide mediation services pursuant to this section and under the Evidence Code as it applies to mediation initiated under this section, the Ombudsperson SHALL NOT CHARGE A FEE FOR THIS service."
So which is it, $50 or free? Owners should begin budgeting an additional $100 on up for fees with no end in sight.

As each brilliant legislator wants to add their name to the notches on the Davis-Stirling Act's belt, the fees will keep rising forever.


• CREATES a CID Ombudsman...(creates more problems for owners)

• REQUIRES Ombudsman to provide a website and toll-free number (this is really hard to do)

• REQUIRES association to PAY FEES for each separate interest within the CID (owners apparently don't pay enough already)

• ESTABLISHES advisory committee (just like the useless CLRC)

• REQUIRES Ombudsman to report ONCE A YEAR to the legislature with statistics (report? report WHAT? and WHY? How many damn statistics do they need, they re-publish the statistics every time they add another code to the Davis-Stirling Act, this is preposterous)

• REQUIRES Ombudsman to make RECOMMENDATIONS...AND to certify that directors have read governing documents (imagine! we are paying condo police to report to a government agency on owners READING documents --who could possibly take this bill seriously. It fails to PENALIZE RECALCITRANT BOARDS FOR THEIR BAD FAITH AND BAD ACTIONS, but it can make recommendations, what good are "recommendations" - where's the "enforcement" in THAT!)

• REQUIRES Ombudsman to provide training materials and courses AND CHARGE A FEE FOR THIS "SERVICE" (owners don't need any more pamphlets, let alone training materials provided from the same industry that bankrupts us; we've got enough problems with the real governing documents.)

• ALLOWS but does NOT REQUIRE Ombudsman to attempt to resolve a dispute between an association and owner by conferring with the two parties to reach mutual agreement. (if the owners cannot see what is wrong with this bill by this point, they are in big trouble).


Everything in this bill is subject to "the limits of the available resources."

Response: What an utter, unmitigated, waste of time

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