Every once a while a bill is introduced that is so bad one wonders how legislators give it serious consideration. AB 518/SB 432 is one of those bills, yet it is being fast-tracked for passage. Here are EIGHT problems with this legislation:
State government intrusion
- Condominium associations are democracy-in-action at the most local level. These associations are managed by volunteer board members (residents) who are elected by their fellow residents. These associations are also governed by legal covenants provided to all condo owners at the time of purchase. AB 518/SB 432 interjects state government into the governing process and bypasses decision making of association board members.
Government price fixing
- AB 518/SB 432 establishes government-set prices on the production of important consumer protection information provided to prospective condominium buyers. This interferes in the free market setting of those prices.
Socialist cost shifting
- The government prices set by AB 518/SB 432 for consumer protection information aren't sufficient to cover the actual costs or liability risks. For some information, the legislation requires it to be produced for free. As a result, the actual costs will now be shifted from the seller and buyer TO ALL of the residents in a condominium association. In effect, all condominium owners will be required to share the costs each time one of their neighbors sells his/her condominium. That type of cost-sharing makes no sense.
"Tax" on condo owners
- The cost shifting triggered by AB 518/SB 432 creates a "tax" on condominium owners in the form of higher association dues/assessments.
Litigation bonanza
- Vague wording and increased legal liability included in AB 518/SB 432 will trigger increased litigation against condominium associations. This will increase costs to owners living in these associations. But at least the lawyers will get rich!
Threatens condominium governance
- Condominium boards already struggle to find volunteers willing to serve. The increased costs to condominium owners due to the government price fixing and increased litigation threats will discourage residents from volunteering to serve on their association's board. Who wants to be sued or blamed for dues and assessments increasing?!
A "solution" in search of a problem
- There is no demonstrated need for this bill and the proposed changes. Instead, this bill creates additional problems.
Bypasses the legislative process
- AB 518/SB 432 was drafted in secret by one industry in an attempt to regulate the condominium association industry. Yet, there was no attempt to contact the condominium association industry or residents for input or negotiation. That's not how the legislative process should work.