LETTER TO SEN. KUEHL RE: OPPOSITION TO SB- 127

COLUMN

LETTER TO SEN. KUEHL RE: OPPOSITION TO SB- 127

June 19, 2007

To: The Honorable Senator Kuehl

Date: June 19, 2007 P By fax OPPOSITION TO SENATE BILL 127

Author: Donie Vanitzian, J.D., Arbitrator

Stakeholders: HOAATM 75,257 strong and growing

June 19, 2007

The Honorable Shiela Kuehl

State Capitol, Room 5108

Sacramento, CA 95814

Re: SENATE BILL 127 IS A BAD BILL OPPOSITION TO SENATE BILL 127

Dear Senator Kuehl,

Please file this opposition with the appropriate committees to lodge our opposition to Senate Bill 127. I am the spokesperson for the group known as HOAATM (Homeowners Against Association Tyranny & Manipulation) and we are now 75,257 members strong.

WE ARE STAKEHOLDERS. WE HAVE A DOG IN THIS FIGHT.

With all due respect Senator, your Senate Bill 127 is NOT about disclosures.

1. Senate Bill 127 creates roadblocks to free enterprise for both buyers and sellers. Assuming arguendo that most, but certainly not all, escrows are approximately 30 days, your Senate Bill 127 does a disservice to the millions of homeowners that are stuck owning and attempting to sell or 1031 exchange their “properties” whether or not they are located within common interest developments throughout California – but most especially if they ARE located within common interest developments.

2. Senate Bill 127 is both pedestrian and myopic. Your Senate Bill 127 presumes escrow periods are 30 days, when in fact some are closing in as little FIVE days. My husband isa 25-year Realtor® veteran and he can tell you he has witnessed properties close in as little as FOUR days -- and ONE that closed in 24 hours. Why do buyers have to besubject to your interpretation of “escrow.”

3. Senate Bill 127 predictably will, and does, interfere with the free-flow of inter- and intrastate commerce in that, 1031 exchanges for example, that are able to close quickly and complete transactions, will be subject to a statute that will not only hinder those efforts, it will interfere with business, free trade, and prospective economic advantagefor buyers and sellers alike -- be it one (1) day or thirty (30) days closing.

4. Senate Bill 127 conflicts with other existing statutes by placing contingencies that areunable to be satisfied, let alone be satisfied in a timely manner -- let alone be satisfied pursuant to the state statute(s) existing or otherwise. The public is in need of protection -- yet your bill exempts those who need that protection the most. Presently your office aids are relaying to the public that “existing law” allows the buyer to “get out of the sale” within three days -- right. Big Deal! Have you ever tried to invoke that section of code to get out of a purchase? Good luck. Yet your staff states that phrase with such conviction your constituents will believe it.

Even with that illusive statute that your office claims lets reluctant buyers escape their sales agreement to/of purchase, Senate Bill 127 as it stands today (June 19, 2007) nails the coffin shut on millions of unsuspecting buyers and sellers by surpassing that 3- day escape clause. Senator Kuehl, if you really wanted to assist buyers and sellers, but especially those who are handicapped the most (common interest development owners) then your bill would unequivocally state that ALL such documents SHALL be PRODUCED PRIOR TO execution of said sales and/or purchase agreements. Wouldn’t that be the SMART thing to do? That would eliminate LITIGATION. It would eliminate GRIDLOCK. It would eliminate any potential FISCAL IMPACT on the state. But it would also eliminate your Senate Bill 127.

6. When your office was asked: WHERE IS THE PENALTY AGAINST THOSE IN POSSESSION OF SAID DOCUMENTS FOR THEIR NON-COMPLIANCE AND FAILURE TO PRODUCE? The unfortunate reality regarding the information circulated by your office is misleading at best. (A) When asked to direct us to the section of Code where these items can be found, your aid says: “go to www.leginfo, its all there.” (B) Your office also no doubt with a straight face, informs callers that there is a $500 penalty existing in the statute against non-compliance. ARE YOU SERIOUS? PUH-LEEZ! GIVE US A BREAK!

With all due respect Senator, you KNOW that statute is wholly ineffective and inapplicable to Senate Bill 127. Frankly you should be ashamed in allowing such statements to be made to the unsuspecting public who voted you into office and who do not know better. They actually BELIEVE YOU.

(A) The Civil Code Sections 1350–1378 (the Davis-Stupid Act) provides for $500 penalties for various items that are frankly, impossible to collect on. That statute to which your aid refers is a cruel ruse that was meant to placate California owners who are losing thousands if not millions of dollars across this state because they are unable to adequately protect their assets which are located within a common interest development. (See, Vanitzian, Common Interest Developments (Thomson/West, 2006-2008).

(B) That Civil Code Section “allowing” common interest development owners to file a lawsuit in order to invoke that section of code, is inapplicable in the situation your statute creates.

First: the buyer has no standing to invoke the statute because they do not yet own in a common interest development.

Second: the seller may not invoke that statute because in order to do so the event in question must have come to pass. The Civil Code Sections alluding to the $500 fine (NOT PENALTY) can only be instituted AFTER 10 days have passed AND the homeowner

association has failed to comply. Even with that, the owner MUST PROVE IPSO FACTO that (a) the association was served with a request to comply; (b) that the association WILLFULLY failed to comply; (c) present proof of damages. (See, Vanitzian, Common Interest Developments (Thomson/West, 2006-2008).

Third: assuming arguendo that the useless Davis-Stupid Act’s $500 spit-fee applies

à PLEASE explain how a measly $500 penalty which unenforceable compares to a sales constituting hundreds of thousands of dollars if not millions of dollars in lost sales? How your aid could actually lead the public to believe what was said with a straight face, boggles intelligent minds. THIS is why the public does not trust politicians. Invoking that section of Code to apply the $500 “fine” REQUIRES filing a LAWSUIT.



Fourth: Your Senate Bill 127 also presumes that the seller will be able to assert a defense (SUE, LITIGATE) after the sale, presumably against the saboteurs (i.e., management companies and boards of directors) but you are wrong. Once the seller completes the sale, the seller no longer has standing as an association member to sue in that capacity. (See, Vanitzian, Common Interest Developments (Thomson/West, 2006-2008).



(C) Of course you know that Civil Code Sections 1350–1378 place ALL burdens of production of documents regarding the “sale” on the seller. You also know that the only recourse a buyer has is not against the saboteurs (i.e., management companies and association boards of directors) but against the seller. Senate Bill 127 kills the sale. It unilaterally prejudices the seller/owner and increases the burden of doing business for the everyday citizen. (See, Vanitzian, Common Interest Developments (Thomson/West, 2006-2008).

7. For Senate Bill 127 to be effective it must per se detail the items that can and cannot be demanded. This alone will create conflicts in several areas of California statutes.

There is so much more that is wrong with this Senate Bill 127 that frankly, it is impossible to list it all in this memorandum.

Without the aforementioned items being addressed, this bill is absolutely toothless and as the British say, a “wank.”

Very truly yours,

/s/

_________________________

D. Vanitzian cc: Members of HOAATM


























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