HOAs want immunity if they are subject to penalties

California’s ECHO, an HOA/CID friendly lobbying group, addressed the California ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT on May 2, 2005 relating to the HOA bill, AB 1098, and the imposition of penalties against boards that violate the laws. For all these years, the only penalties that exist are against the homeowner, and it’s a harsh one that amounts to, in effect, excessive punishment by all interpretations of the US Supreme Court’s holdings in the BMW and State Farm cases.

Yet, ECHO seems to continue this argument of a special status for CIDs and to nullify any penalties with the equivalency of a municipal corporation — a city or town — immunity. This is a response, it seems, to my letter to CLRC regarding the Administrative Procedures Act (found in almost all states) that governs agency procedures. In short, agencies are immune from liability for their acts unless grossy negligent. But, with the failure to provide enforcement provisions against these private organizations, CIDs already have a special status contrary to law and are protected with this approach to government immunity. Furthermore, several court court opinions gave deference to the HOA/CID board views and decisions, because the court felt that the board knows better than the court, which is also another immunity policy with respect to government agencies.

The ECHO statement:

ECHO argues that community associations are more like nonprofit corporations than local governments. According to ECHO, “The average community association has about a hundred members, which is hardly government-like. Community associations cannot fairly and responsibly be commanded to operate like local government when they’ve been granted neither government-like immunities nor legislative privilege and have no elaborate staffs to guide them. Their exposure to liability without immunity or privilege or commensurate guidance has no limit, a consequence we hope was not intended.

If ECHO wants municipal status as a condition that they will accept penalties, then in all fairness and with justice to all, CIDs must be held to the same municipality laws as all other municipal corporations are held: open meeting, freedom of information, filing of complaints according to the Administrative Procedures Act, judicial review, penalities, fines and removal from office, etc. Let’s stop the special status, contrary to law, given to CIDs and uphold the equal application of the laws to everyone.

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Published in: on May 7, 2005 at 2:52 pm  Leave a Comment  

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