Why aren’t HOA property managers held strictly accountable as are real estate property managers?

CCHAL[1] reports that “The California Bureau of Real Estate (BRE) is taking enforcement actions against M & C Management, one of the largest managers of homeowner associations in California.”[2]  Readers should understand that the suit is not based on HOA (CID) law violations but on real estate law violations.  HOA property managers are not held to the same strict real estate property manager requirements. WHY NOT?

Real estate property managers are held to strict procedures and accountability, especially in regard to money matters, as this complaint reflects.  Real estate brokers, the person in charge under which real estate agents must be licensed, must deposit buyer down payments within 72 hours, must maintain separate banks accounts, etc. and are subject to random audits by the real estate department.  Penalties are severe. Why are HOA managers getting a free ride, especially when they hold assessments, “trust money,” for hundreds or thousands of homeowners?

None of the state HOA manager licensing laws come close to requiring strict money accountability or strict enforcement in general as required of property managers. Yet, many states see no evil and turn to the special interests managers to train other managers and board members.  Or is it more accurate to say “indoctrinate” these parties, including state legislators.

When state legislatures ignore the 14th Amendment protections of due process and the equal protection of the laws, the people lose.  When the National Association of Realtors (NAR, which is a business trade group supporting its member agents) fails to demand that HOA property managers be licensed and held accountable as are real estate property managers, which you would think would be in their best interest, the people lose.

When HOA reform legislation fails to demand changes on the basis of constitutional protections, the people lose. When brave homeowners fail to raise constitutional issues when in court using competent lawyers, the people lose.

 

References

[1] Center for California Homeowner Association Law (CCHAL) (http://www.calhomelaw.org/).

[2] Id, CCHAL Newsbrief email. (1.9.2016).

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Published in: on January 10, 2016 at 8:49 am  Comments (1)  

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  1. From CCHAL —

    George — couldn’t agree more, so PLEASE POST MY RESPONSE.

    There have been legislative efforts in Sacramento in the past to make property managers accountable but these efforts have had marginal success.

    That doesn’t mean that advocates shouldn’t keep trying to enact meaningful legislation. It took California advocates — under CCHAL’s leadership — several years to get constitutional due process legislation through the Legislature and signed by Governors (both Democratic and Republican) that protect homeowners during assessment collection.

    The legislation we got signed into law — AB2289, SB137, AB1098 among other bills — has in the past two years become the legal foundation for critically important decisions in the California Appeals Courts (Diamond v Superior Court; Huntington Continental v Miner, for example). So the legislative process DOES work.

    It will be the same with any other difficult issue — like making managers accountable.

    Keep in mind — as I’m sure you do — that making managers accountable requires the cooperation and endorsement of a government agency, either at the state of local level. Enforcement also requires money, the mother’s milk of government IF you want enforcement done through the executive branch and not the courts (though there’s no reason it couldn’t be done through both.)

    The Center welcomes your thoughts on how making managers accountable can be framed as a constitutional issue, which I know is your primary focus.

    All the best — and Happy New Year, George. Keep up the good work.

    Marjorie


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