Consumer protection bill for HOA planned communities reintroduced in PA

By Deborah Goonan, Independent American Communities

PA state seal

In the previous legislative session in Pennsylvania, Rep. Rosemary Brown (R) introduced legislation to provide oversight of  homeowners, condominium, and cooperative associations under the Bureau Consumer Protection (BCP), Attorney General.

Reintroduction will provide opportunities to make corrections and amendments that favor consumers rather than real estate and community management industry trade groups.

Below I highlight a few of these Red Flags for owners of property (or shareholders of co-ops) in the state of Pennsylvania.

Harmful amendments to originally proposed bill

Last session, HB 1774 was amended numerous times, with input by industry lobbyists from the Pennyslvania-Delaware Chapter of Community Associations Institute (CAI).

First, the scope of oversight was narrowed to complaints involving meetings, quorums, voting/proxies, and access to association records. That means consumers cannot file complaints if their association fails to provide promised maintenance services or necessary repairs under the terms of their government documents. Why not?

And what is an owner or resident to do if their association violates their Civil Rights, or if the board, manager, or HOA attorney engages in harassment targeting an unpopular member?

In addition to making the scope of authority too narrow, the bill was further amended to make it more difficult for owners to file a complaint and to help associations avoid accountability.

The word “mediation” was removed and replaced by “alternative dispute resolution (ADR),” leaving the door open for Arbitration rather than Mediation. Arbitration is a more intimidating option preferred by industry trade groups.

Then certain conditions were added, such as requiring the property owner filing the complaint with the BCP to be in “good standing” with their Association. The most recent amendment defines UNIT OWNER IN GOOD STANDING as follows:

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Of course, property owners and housing consumer advocates know very well that making consumer protection dependent on an owner being in “good standing” is rife for abuse. And the qualifier that follows is meaningless. Who gets to decide whether or not the complaint is directly related to one of the four chosen issues that a consumer may pursue with a formal complaint?

Suppose your complaint is about an unfair or rigged election, but you are not in good standing because of a fine for not storing your trash can in your garage? It seems as though you could file a complaint about the fine, but not the election. Does that make sense?

And why should it matter if an owner is not current on assessments or fines?

So your HOA should be able to get away with breaking the law, simply because you were a few days late with a payment?

If a consumer files a complaint against an auto manufacturer for a defective vehicle, there is no requirement that consumer must be in “good standing” with payments on his car loan.

If a constituent were to file a complaint involving misconduct by a government official or employee, it is not required that she be current on property and income taxes.

So why the special exception for filing complaints about a planned community?

 

Access to association documents

Another glaring problem with the final amendment of the 2015-2016 session is that the General Rule is inconsistent for planned communities, condominiums, and cooperatives.

The rules for condominiums and cooperatives allows for complaints to be filed with the Bureau of Consumer Protection (BCP) in the event of violations related to meetings, quorums, voting and proxies, and access to association records. But, as currently written, the rule for planned communities (HOAs consisting of single family homes), allows for complaints to be filed with BCP in the event of violations related to meetings, quorums, and voting and proxies. What happened to the provision involving access to association records?

Was this an oversight or a deliberate omission?

Here’s a screenshot of the section pertaining to planned communities.

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Looks like advocates in Pennsylvania will have to keep a watchful eye on amendments and progress of this bill.

Here’s the official press release from Rep. Rosemary Brown.

 

Improving the Way the State Handles Issues from Within Planned Communities

Nearly one quarter of Pennsylvania residents live in some type of self-governing community. At my district office in East Stroudsburg, my staff and I receive a tremendous amount of phone calls from frustrated residents and board members from within self-governing communities when certain issues arise. Unfortunately, besides directing the complaint to a private lawsuit, there are not additional resources available to resolve issues. That is why I am reintroducing legislation to improve the opportunity to mediate and investigate complaints at the state level. Communities formed under Title 68 are operated under a set of governing bylaws, which create micro governments within. When occasional serious disagreements or incidences of fraud occur in these communities, residents and unit owner boards need somewhere to turn. Title 68 already allows for complaints regarding financial documents to be filed with the Office of Attorney General’s Bureau of Consumer Protection; however, it does not assist with other complaints that may be a violation of other portions of Title 68. Examples include meetings, quorums, voting/proxies and other association records. My bill would assign such additional tasks to the Bureau of Consumer Protection. Since the bureau is already equipped to handle similar complaints in a way that will find resolution and justice for these disagreements and violations, it makes sense to add these issues to their purview. The intent of the legislation is to provide assistance to unit owners and board members, alike, when they feel their rights and benefits may have been violated. It could also prevent these parties from having to enter potentially costly lawsuits. Simply put, I believe there should be a way to help mediate and investigate specific violations to ensure the rights of homeowners and boards are protected, working to create more harmonious community living. I introduced similar legislation in the 2015-16 legislative session which was approved by the House, but not voted on in the Senate. I am hopeful we can get this through both chambers and to the governor’s desk for his signature during this session. ## #

 


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