One of the most interesting aspects of tracking state legislation across the country is the emergence of new patterns that fly in the face of forecasts before the start of the legislative session. One such trend is the proliferation of ombudsman and ombudsman-adjacent bills. Across the country, we are seeing states trying to pass common-interest community ombudsman programs once more. We also are seeing a new legislative trend to bring community association boards under the umbrella of states attorneys general and certain local officials.
SB 876, An Act Establishing a Condominium Ombudsman and Requiring the Disclosure of Certain Financial Information, would create a new condominium ombudsman office with the authority to mediate conflicts between owners and condominium boards. Similarly, HB 5833, An Act Concerning the Establishment of a Pilot Program for the Mediation of Condominium-Related Disputes, would create a new program to mediate conflicts between owners and condominium boards. Neither bill has advanced out of committee.
There have been several bills introduced this session related to ombudsman and dispute resolution programs:
- HB 1501, relating to condominium associations, would create a condominium ombudsman;
- HB 1499, relating to common interest developments, would create a study committee to determine the feasibility of creating a common-interest community ombudsman office;
- HB 1509, relating to common interest developments, also would create a study committee to determine the feasibility of creating a common-interest community ombudsman office; and
- HB 381/SB 594, relating to condominiums, would repeal an existing expiration date on the use of Hawaii’s condominium education trust fund for dispute resolution services.
Only HB 1509 advanced to the next chamber before the March 9 deadline.
This year, we have seen the introduction of H 157, relating to condominiums and homeowners associations. Charging fees for rushing a statement of account is already prohibited by law in Idaho; this bill would expand that prohibition to include all fees. Importantly, H 157 would turn these fees into a violation of the consumer protection act, opening up a community’s manager, association, and board members to liability and sanctions from the attorney general’s office. This bill is currently on its way to Gov. Brad Little’s (R) desk.
In Texas, there has been one bill introduced so far- HB 5258 relating to the violation of certain laws and provisions of governing instruments by the governing body of a property owners’ association. This bill would enable a county attorney to impose injunctive relief on an association for violations of the Texas Residential Property Owners Protection Act. Specifically, the bill refers to sections of the act governing board member elections and voting procedures. The bill has not moved as of writing.
Washington state has seen two bills filed separately this legislative session- SB 5257, which provides protections for consumers engaging with common interest communities, and HB 1569, which protects unit owners in common-interest communities. These bills would make any violation of homeowners association statutes a violation under the consumer protection act, opening up association boards and board members to liability and sanctions from the attorney general’s office. Neither bill advanced out of committee.
CAI continues to remain engaged with state legislators and has made its opposition clear to the bills above. As states start to reach the end of their legislative sessions, expect updates from your state’s legislative action committee.
For more information on ombudsman/alternative dispute resolution programs, please see CAI’s public policy and Report on Offices of Community Association Ombudsman.
CAI should be supporting Ombudsman bills! Not against them. By having an oversite the HOA’s will follow the laws and home owners will be happier, thus making HOA’s better places to live. I will not enroll my HOA Board in CAI because they shamelessly support lawyers over our own homeowners.
I have served on an HOA Board, I am familiar with the CAI and have attended in-person and online events. The CAI should be supporting Ombudsman bills, not campaigning against them. The state Statutes that govern HOAs and Association Documentation should benefit both parties, they should outline actionable without the need for an attorney consequences for the HOAs failure to comply as well as for a homeowner’s failure to comply. Right now, all the Statues and Association Documentation is terribly one-sided. When an HOA fails to comply, a homeowner should be able to seek remedy from a governing body: the state, the county, etc., without having to hire an attorney. An attorney is an unfair financial burden. An HOA simply spends HOA money, even if there’s no line item in the budget for it, even if they have spent their budget. Aside from the expense of an attorney there is the problem of “conflict of interest”. My builder is state-wide. The HOA’s attorney is state-wide and a member of the CAI. The PMCs associated with my HOA are state-wide and members of the CAI. Do you understand how impossible it is to find an attorney in real estate to handle HOA issues? The CAI should be a resource for HOAs AND homeowners. You are not. Homeowners own the very HOA they are being victimized by thanks to the CAI, HOA attorneys, PMCs, builders and some boards who are controlled & manipulated by the aforementioned entities.
I am in Texas and in litigation with my HOA for, IMHO, fiduciary irresponsibility, self gain, and not following the governing documents and state statutes. Despite the Judge ordering mediation twice, there is quite frankly no incentive for the HOA to settle because all of their fees are being paid by the insurance company whereas I have to self pay. And the HOA’s lawyer keeps using legal mechanisms to drive up my cost. How is this fair?
Is your HOA’s attorney a Member of the CAI? Mine is. My HOAs attorney was hired by the builder and clearly represents the builder’s interests, not homeowners. I will be filing a Grievance with the state Bar Association.
I totally agree with you Masha. Homeowners are the losers, and this organization is lobbying against us. FYI- our homeowner funds are also supporting /paying for CAI. I too was on the BOD and had to ask what is CAI. None of our BOD knew. Yet we pay for a subscription.
The financial burden for compliance with state Statutes and state and local government required Homeowners Association Documentation should NOT be shouldered by HOA homeowners. It is an unfair and unrealistic expectation. Statues and Association Documentation must be written in such a way that they benefit and protect both parties, not just one. Consequences for failure of HOA to comply with Statutes and Association Documentation must be clearly outlined and a free-to-homeowner process for gaining HOAs compliance via an ombudsman must be included in same.
Given the uprising of HOA members in every state across the US, the increased number of Law Suits and media publicity regarding the tragic injustices even over what seems like trivial issues, CAIs support of an ombudsman should be number one priority.
The current system, profiting off the backs of members, is unsustainable. Members are increasingly moving to non-HOA homes as the cost is too much to bare. The word is getting around about the lack of accountability for board members, illegally restricting members’ rights. An ombudsman is necessary, please seek fairness.
CAI should not be against oversight over the professionals who manage owners money. Every corporation needs state oversight and governance, especially when millions of dollars are being managed. The lack of governance allows for embezzlement and attorney fees burden an association. All owners signed the contract agreeing to be held accountable, but boards exempt their actions by claiming they are uneducated volunteers. Professionals are held harmless because they blame the board as the decision makers. The only members held accountable are those who cannot defend themselves and therefore are forced into foreclosure, not for past due assessments, but for fines, fees and attorneys fees. CAI advocates for super priority liens and nonjudical foreclosure because that’s how HOA attorneys profit. They are guaranteed a paycheck whether they are right or wrong. They know homeowners can’t afford civil court and use the funds of the Association to force homeowners into an impossible debt. We need governance by the state because right now CAI is acting as “the governors, bill collectors and enforcers of homeowners, as they lobby for laws that protect “the interest’s of their members”.
HOA and community associations lack ACCOUNTABILITY. I believe CAI knows that. If not, then CAI does not represent HOA homeowners at all. The HOA industry is ripe to have guardrails in place to protect from extreme Board members actions (fines, waste of resources, predatory interest rate on alleged balances, discrimination, non-judicial foreclosures, etc.). If CAI believes in what they advocate and the membership they represent, then CAI needs to support Ombudsman bills. Otherwise, CAI is part of the problem, and our legislators need to know that. How would CAI support affordable housing if CAI promotes 90-day non-judicial foreclosures?
The CAI should be supporting and promoting ombudsman legislation, not opposing it.
Currently state Statutes and association documentation is very one-sided and homeowners are NOT adequately represented in any of it.
HOAs are a billion dollar industry. There must be accountability built in to Statutes and Association Documentation. The industry needs government oversight.
An ombudsman in Washington State would be most helpful. We have two presidents who entered into contracts to give real estate licenses to portions of the community property without a 2/3 vote required by the Bylaws. These contracts were done in secret (not even mentioned in a board meeting). There needs to be a way to have accountability without resorting to a lawsuit.
CAI needs to support all legislation that provides HOA oversight at a state level.
Homeowners’ Association reform legislation in North Carolina is long overdue to increase transparency, prevent the abuse of power and unilateral decision making, and protect the rights of individual owners.
Specific and clear limits on an Association’s power to act with respect to individually owned property are needed.
Owner and resident of a Planned Community in North Carolina
I have always felt that lobbyists have an integral place in the development of good legislation. A legislators’ ability to see both sides of an issue is important. But when you say, “CAI continues to remain engaged with state legislators and has made its opposition clear to the bills above” you include opposing even a study committee for an ombudsperson. That is extreme. As an earlier poster said — you need to seek fairness for all parties. Likewise, opposing NC HB311 which seeks a mechanism for enforce EXISTING laws, without further explanation, is puzzling. You can’t live in this state and not have heard the horror stories. If bills of this ilk are popping up all over the nation, it’s because something has been very wrong for a long time, and it would seem, CAI, hasn’t been at the forefront of trying to address it.