In short, HB 2371 would allow untrained and unlicensed HOA property managers to represent HOAs in small claims court, but does not allow the homeowner to be represented. Yet, real estate agents, who are required to take continuing education courses in agency, real estate, and contracts law, are not allowed to represent others in court. And even licensed paralegals cannot represent others! Why allow untrained and unlicensed HOA managers to represent a special class of nonprofit entities? What legitimate reason is there for this provision except to provide income for the special interests?
The only justification for this bill, which was by offered by the Sponsor, was that it was not controversial and it was agreed to at a meeting of all the stakeholders. However, the stakeholders did not include any homeowner advocacy group, and this bill is very much not only controversial but un-American as well. This is the second such bill brought by a state representative in the past 3 years, the other being HB 2441, the “minority control” bill in 2011, that was rightfully defeated in the Senate.
In January of last year HOA managers were put on notice by the AZ Supreme Court opinion (UPL Advisory Opinion, 12-01) on the Unauthorized Practice of Law, and one firm in particular, a member of two HOA special interest trade organizations, was found to have engaged in the unauthorized practice of law (in RE: Board of Legal Document Preparers v. AAM, LDP-NFC-09-L094 and LDP-NFC-10-L026).
So, it appears, the problem of managers engaging in UPL activities is to be resolved by introducing a bill to “make it all good without any requirement for training and licensing! This is a disgraceful bill! A bill that treats the good people of Arizona, who are subject to unregulated HOA private governments, as second-class citizens. It insults the good people of Arizona!
Furthermore, HB 2371 goes on to allow “contractors” (that can not only be managers, but landscapers, pool maintenance people, etc.) of HOAs to represent HOAs before the Office of Administrative Hearings. It allows attorney fees to be awarded only for the Petitioner if he wins. Under the law, OAH is not permitted to award attorney fees, so this bill is needed to make it happen.
But, it is only for HOA adjudication hearings and not for any other agency hearing! With HB 2371, the unlicensed and untrained manager will get fees paid by the Pro Se homeowner who turns to OAH because of no attorney fees. Records show that some 90% of the homeowners were Pro Se not using an attorney, while the HOAs were almost 90% represented by an unnecessary attorney. (Based on detailed OAH records for the first 66 cases in 2006-7).
The purpose of OAH adjudication was to provide an increased level of judicial protections for homeowners in HOAs without the need for an attorney in an informal setting, and without the need to understand the rules of court. The HOA attorneys have been trying for years to turn OAH into civil court proceedings under 100 rules found in some 200 pages of legalese. But, the bill does not require that the HOA manager learn and understand the civil rules or the law.
Once more the citizen, the whole reason for the existence of a democratic system of government, is smashed down to the bottom of the food chain by an unconscionable bill. A disgraceful and insulting bill! The Senate committee cannot allow this bill to pass in good conscience. It must be soundly thrashed.
HB 2371 will be heard in the Arizona Senate Government & Environment Committee on a Monday to be determined.