Wednesday, March 26, 2008

Assembly bill 1921 could shatter the American Dream


Assembly bill 1921 could shatter the American Dream

by Donie Vanitzian, JD

March 26, 2008

California is presently cash and income strapped to the tune of at least $14.5 billion dollars with proposed cuts to be made in every State Department. Keeping that in mind, nothing is laudable or applaudable about Assemblyperson Saldana’s Assembly Bill 1921, just as nothing is commendable about the countless “paid” hours expended by the California Law Revision Commission in bastardizing the Davis-Stirling Act.

Assembly Bill 1921 complicates an already problematic statute. I am on the record demanding a moratorium on any Davis-Stirling Act rewrites until a “credible” study of the problems can be, and has been, accomplished. AB 1921 is the full employment act for special interest parasitic industries and California's legislators. It is shameful that the remaining few protections for the titleholder's vested property interests are dangerously diluted by the cumulative effect of this bad legislation.

Though they may fancy themselves oracles of legislation, California Legislators are instead, masters of self-delusion. While in the Sacramento Holiday Camp, these public sector parasites are rarely held accountable for the disasters they cause. Once their paychecks end, their pensions begin. For the past three decades or so, California statutes have resulted in a battle-scarred minefield memorializing the delusions of self-congratulatory legislators wanting their names in books of California law--at any cost. The bigger the special interest payments--the bigger the name in the books.

If ABomination 1921 is signed into law, the end game for titleholders is prohibitively expensive litigation.

Heavy on Sweetheart Deals But No Checks and Balances

Assembly Bill 1921's caption reads, "This bill would revise and recast the Davis-Stirling Common Interest Development Act." In other words it is the "rewrite" of an entire Civil Code Title of law.

Assembly Bill 1921 is voluminous in print and anemic in its practicality. It amounts to a wholesale rewrite of law already in force, interpreted by the courts, and relied upon for well over two decades. Notably, the proposed rewrite is short on substance and lacks justification for shredding laws already in place. AB 1921 purports to sacrifice the Davis Stirling Act by codifying vacuous Legislative oratory. Hiding reality under the guise of "legis-speak" lest their intent be exposed, the cumulative outcome of AB 1921 if passed, amounts to condemning owners to subjugate their rights to the whim of their rulers, be they boards, legislators, vendors, attorneys, judges, arbiters, or the like. It is an "implicit submission" to forces outside the homeowner's control.

A sober look at this preposterous legislation--devoid sufficient public input and competent research-- reveals the imposition of unilateral substandard lawmaking. Assembly Bill 1921 consists of bad law: rife with loopholes, titleholder disenfranchisement, and remarkably poor drafting. Without adequate substantiation, one hundred seventeen sections, "Title 6," an entire Chapter consisting of Civil Code sections 1350 through 1378, are hacked out and rewritten in a matter of months by the few, with virtually no meaningful input from the many.

Misleading the Public

Much of the public is unaware that these shenanigans are taking place right under their nose. What homeowner has the resources on such short notice, let alone the time and knowledge to pour over 300 pages of newly conceived laws and then sit down and attempt to craft a letter to their Legislator explaining their views on the matter? I tried to do that and was told the Legislators and the Legislature are only interested in "groups." My letter was not even admitted into the record, so intentionally ignored that the record baldly claimed there was "no opposition."

The level of scrutiny that should have gone into this massive rewrite was, and is, missing. What part of "fiscal impact" does this California Legislature not understand?

Our Legislature has a far higher duty to the public than it is practicing. Without delay, the Legislature should place full-page advertisements in major California newspapers for one year as well as notify every common interest development titleholder that laws profoundly affecting their ownership are in play.

To claim that the Internet provides "notice" is a self-indulgent fantasy. Not every homeowner is computer literate, or has a computer, or has affordable access to the Internet and a printer. And rare indeed is the Internet-enabled titleholder who searches daily to see if the Legislature is tinkering with his property rights. Let alone understanding the bloated Commission's purpose few homeowners have heard of the "California Law Revision Commission." Yet that Commission's dangerously misguided authorship of the proposed Assembly Bill 1921 will effect the lives, property rights, and personal assets of millions of homeowners in this state.

Indifference to Statutory Integrity

Statutory changes tend to be of two types, renumbering-reindexing when societal change renders the current placement inadequate, and substantive changes in the law itself. By doing both simultaneously in Assembly Bill 1921 the Legislature renders impotent the public's ability to understand and comment on it.

Anyone who has ever had to find or follow the law knows the importance of stability of cross-referencing and the agony and cost wholesale renaming and reindexing impose. Moreover this renders much of case law unusable to all but the most sophisticated, well-funded researchers. Nonetheless, under the banner of "simplification" the California Law Revision Commission masks the enormous scope substance of its changes. In its enthusiasm for musical section numbers to cover its tracks, once again the CLRC excises "Title 6" from the Civil Code.

The initial heading of the former Title 6, “Wills”, enacted in 1872 consisting of sections 1270 to 1377 was repealed by Stats.1979, c. 373, sec. 484 to make way for the present version of the Davis-Stirling Act monster. It should be noted that the purpose of moving "Wills" was to place it in Probate Code statutes.

Title 6 "Common Interest Developments" was hatched in 1985. Now its 117 Civil Code sections are littered by the detritus of the CLRC's self-aggrandizing musings also known as "Comments" throughout the Code's annotations. Here, "Common Interest Developments" stays in the Civil Code statutes but changes it numbering and alters text substance.

In 2007 the California Law Revision Commission reported that it would be "several years" before this "project" would be presented to the Legislature. Worth mentioning, is the fact that titleholders did not ask the Law Revision Commission to do this in the first place, but the Law Revision Commission was advised that the owners were against this rewrite of laws in the manner it was occurring. Having slipped this soporific to the public, the CLRC speedily cobbled together AB1921 to be introduced in less than a year.

Moreover, attempting to slip even alert observers another "mickey," it purported to address only "technical and conforming changes," shamelessly mischaracterizing an intentional revision bastardized of form and substance.

"Recast" is Just a Fancy Word for "Rewriting Law" While Bypassing the Democratic Process

The audacity, let alone unmitigated arrogance that somehow the California Law Revision Commission is above the law and can perform such functions that are beyond its mandate, is unnerving. The Commission categorized their so-called "Statutory Clarification and Simplification of CID Law" as the panacea to problems plaguing such developments. What could possibly be "simple" about 300 pages consisting of some 85 cross over laws and no beta test as to its applicability?

Assembly Bill 1921 is not a revision; it is instead a rewrite of the LAW. A legalized pork barrel packed with goodies for the parasitic association industry and its vendors. It is an ill-conceived pork-barrel project that is proceeding without shame and accountability, with no end in sight.

If residential deed-restricted titleholders were ever under the mistaken belief that their Legislator could be an ally--by now they should know better. The public must understand that this cavalier rewrite will detrimentally affect the lives of millions of titleholders and prospective titleholders. Owners, who have dutifully spent decades coming to grips with understanding the Davis-Stirling Act, will be forced to start all over again. Frankly, some may not live long enough to figure it out. Others will likely employ a costlier route, that of hiring lawyers to explain an untested code to them with "on the one hand, on the other hand." Others still, may merely rely on the word of third parties whose interpretation of the codes may be slanted or just plain wrong.

The California Legislature Should Abandon Assembly Bill 1921

While the text in Assembly Bill 1921 may look good on paper, it lacks useful application.

This massive, untimely project has far-reaching consequences for millions of titleholders. For all its pages of paper, and all the rhetoric, pomp, and circumstance, save the back-patting, the hundreds of pages of slop miserably fails to protect titleholder assets. It fails to eliminate longstanding problems of imbalance pertaining to mediation, arbitration, and litigation and the attendant costs thereof. And there are numerous problems related to those issues. Instead, it merely provides a laundry list of statutes as its prelude to a newly created mess with utter disregard as to its implementation in terms of "real life."

Apparently the only people throwing their hands up in disgust at the utter waste of “time,” “resources,” and “excess” in California’s Legislature, are deed-restricted titleholders who lack adequate and meaningful representation in Sacramento. The millions of deed-restricted titleholders are left paying the price for bad laws, interference by special interests, and excess spending created by our legislators. It is scandalous the laws that are passed because some special interest entity wants it and can afford a lobbyist, rather than analyzing and researching laws that are necessary, and then proposing their introduction genuinely subject to public comment.

While the many problems with Assembly Bill 1921 are impossible to adequately address, here's a breathtaking example. Consider this newly hatched phrase slated to become law under Assembly Bill 1921: "An affidavit of delivery of a notice, which is executed by the secretary, assistant secretary, or managing agent of the association, is prima facie evidence of delivery."

Prima facie evidence!!! Might as well say "self-interested and unrebuttable evidence." It matters not what horse the drafter of that provision fell off of, what matters is that with the stroke of a pen something as egregious as what otherwise seem to be an innocuous "phrase" will become law--let alone prima facie evidence to be used against the titleholder with no viable avenue for rebuttable evidence. [FN1]

Imagine a third party vendor who contracts with the association, signing their name to an affidavit stating they did something when in actuality they did not. Imagine the board director secretary trying to cover his or her behind in a breach of fiduciary duty lawsuit for taking a person's home away from them, or instituting litigation against them, or penalizing them--merely by signing an affidavit. How can one disprove dishonesty if it is enshrined in the presumption of truth?

Imagine the same scenario if it were applied to fines, penalties, interest and late charges. The potential for abuse is overwhelming. Phrased alternatively, the venerable certified letter is replaced by the unsubstantiated claim from someone who has nothing to lose and everything to gain. [FN2]

Far-reaching problems with Assembly Bill 1921:

• Assembly Bill 1921 has expunged the word "property" as it relates to the titleholder's vested interest.

• Other than to clarify "escrow" proceedings; define "claimants;" ownership of pets; roof repair or installation; survey questionnaires pertaining to defects; the term "homeowner" is mentioned little, and where it is mentioned it is wholly devoid legal significance rendering the term non-existent as it applies to the titleholder.

• Award of "attorney's fees" are mentioned over twenty-five times and not to the benefit of the titleholder.

• The titleholder is not provided with realistic redress and an avenue for providing penalties against associations, third party providers and advisors, and boards of directors. Assembly Bill 1921 fails to direct the benefits of any such penalties directly to the affected titleholder(s).

• Assembly Bill 1921 fails to provide a "Victims Fund" for any titleholder who is a victim to the bad laws and who suffers at the hands of the association, its third party vendors, providers and advisors, and boards of directors who break the laws.

• There should be no creation of an ombudsman department or agency because of the drastic fiscal impact it will have on the entire state and the owners. No such agency should be funded by residential deed-restricted taxation alone.

• Assembly Bill 1921 fails to provide per se penalties against third-party management companies and their employees and it fails to provide per se penalties against recalcitrant boards. Moreover, it fails to per se assist titleholders in protecting their assets, fails to provide a viable avenue of redress, other than prohibitively expensive litigation, for the mounting problems associated with common interest developments, and homeowner associations. Every avenue the titleholder attempts to pursue for "fairness" is a costly dead-end--thanks to California's obtuse Legislature.

• Assembly Bill 1921 fails to address a huge problem that is created by the lump sum rewrite that did not exist before. That is, the culmination of intersecting procedural demands such as Request for Resolution, mediation and/or arbitration causing a cumulative effect that often costs more and lasts longer than litigation itself. [FN3] Needless to say, there are no guarantees that once initiated, any of those alternatives, ie, request for resolution, mediation, arbitration, will result in a viable resolution. [FN4] Assembly Bill 1921 will only exacerbate these inherent statutory problems.

Law Revision Interference with Legislation

The Commission's time has come and gone. It is no secret that on more than one occasion I have written the Governor imploring him to pull the Law Revision Commission's funding and/or altogether disband it.

Though paid handsomely while the rest of the State suffers great economic loss, cutbacks, and unemployment, the California Law Revision Commission no doubt believes they are only doing their job. That, however, should be a topic for debate. Often patronizing and condescending toward those in disagreement with its agenda, the Legislature not unlike the Commission, appear to side with, if not coddle the special interest industries. The standard response to the non-special-interest public is, "the staff recommends against that change."

Presently, the graveyards of repealed code sections caused by the Law Revision Commission's chainsaw approach in attempting to substantiate its grant money should be investigated. The Commission and the Legislature have created mass confusion for California consumers where none need exist. A first step to clarity and filling the $14.5 billion deficit would be to zero out the CLRC budget and to thoroughly investigate the laws proposed by the State Legislature prior to passage.

For these reasons and much, much more, I oppose Assembly Bill 1921 in toto.

[FN1] See Vanitzian, Expert Series: Common Interest Developments--Homeowners Guide (Thomson-West)
[FN2]: See Vanitzian, Homeowner Associations: Dynasties of Dysfunction]
[FN3] See Vanitzian, Expert Series: Common Interest Developments--Homeowners Guide (Thomson-West)
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Ms. D. Vanitzian co-authors the Los Angeles Times Real Estate section column titled Associations. She is the author of the Expert Series: Common Interest Developments--Homeowners Guide (Thomson-West) and Villa Appalling! Destroying the Myth of Affordable Community Living. She can be contacted by writing to: Post Office Box 10490, Marina del Rey, California 90295.

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