Regulation of Association Governed Communities is in the Public Interest

By Deborah Goonan, Independent American Communities

Open letter to Pennsylvania state legislators

 

Representative Rosemary Brown is sponsoring HB 1774, a bill that was originally intended to grant fairly broad authority to the Attorney General to investigate and mediate complaints of property owners against their Association Governed communities – housing corporations that include homeowners’ associations in planned communities, condominiums, and cooperative associations.

Industry lobbyists paid for by trade group Community Associations Institute (CAI) and their Pennsylvania-Delaware chapter Legislative Action Committee, have opposed regulation and oversight of common interest communities for decades. CAI Lobbyists have already used political influence to amend the orignal bill, watering down HB 1774, such that the AG would have very narrow authority to assist millions of taxpaying homeowners in PA.

Limiting AG intervention to administrative issues such as proper conduct of meetings and elections, and enforcing open access to financial and official records of community associations effectively ignores deeper, more serious issues that adversely affect millions of PA homeowners and residents.

When community associations fail to properly maintain their common property, neglect security and emergency services, and mismanage assessments or “dues” – the functional equivalent of taxes – your constituents suffer financial loss, decreasing property values, and potential exposure to health and safety threats. Furthermore, local municipalities are often called upon to assist financially insolvent associations that are unable to help themselves.

When irresponsible association leaders and managers engage in deception, self-dealing, bid-rigging of contracts, or even fraud and theft, homeowners deserve state investigation into their complains, with serious inquiry into possible corruption or criminal misconduct.

CAI and industry leaders would have the public believe that the industry is capable of self-regulation, that planned communities are bastions of democracy where the majority of residents are satisfied, or at least complacent.

We know this is not always the case, based upon the testimony of homeowners and the recent conviction of two former HOA board members for tampering with election ballots.

If the problems are not that serious, as industry lobbyists claim, then there is no need to “narrow” the scope of authority of the AG. Why does the industry engage in fear mongering, claiming that giving the AG more broad authority and discretion would result in an overwhelming number of complaints? Why would an organization that claims to represent the interests of homeowners in the communities they serve fight against consumer protection and oversight by the Attorney General?

Please use your common sense, and recognize that CAI is not a consumer advocacy organization.

Please also be reminded that homeowners in Association Governed communities pay substantial property taxes, school taxes, sales taxes, utility taxes, and more in the state of PA. In addition, they pay assessments to their mandatory associations, in order to pay for services that would otherwise be provided by their local municipalities – maintenance of roads, storm water systems, dams, street lights, internal security measures, and more. In essence, owners of property in community associations are double taxed for local municipal and county services that benefit other taxpayers.

Yet some state legislators expect taxpayers that own property in Association Governed Communities to fend for themselves in a lopsided, overburdened civil court system, and to conduct their own internal criminal investigations against a hostile or corrupt association board?

The Attorney General assists PA residents and takes complaints regarding defective or dangerous vehicles, deceptive financial services from banks and insurance companies, suspected medical malpractice, and even defective consumer products. Yet housing corporations are exempt from regulation, even though one’s home is often the largest household asset.

Alternatively, if a community association is yet another layer of government – albeit a non-democratic incorporated non-profit – why aren’t all PA residents who reside under this regime entitled to investigation of public corruption by their community leaders under the Department of Justice?

After all, every singe Association-Governed development in the state has been duly approved or even mandated at the local level. The state created this alternate form of local governance with all its inherent flaws. The state has a duty to clean up corruption and dysfunction in all its forms, no matter where it exists.

It’s time for Pennsylvania to shed it tarnished reputation as one of the nation’s most politically corrupt states, starting at the hyper-local level of Association Governed Communities.