HOAs and condo owners at odds
February 14, 2012
Utah’s Home Owners Associations are on guard as a piece of legislation that could rework how disputes between owners and the HOA are handled moves toward committee review. Utah legislator David Litvack (D-Salt Lake City) took up constituents concerns this session and submitted a bill that could impact condominium owners and their HOAs throughout the state, including Park City.
"There are condo owners out there who feel they have very few options available to them," Litvack said. "From fraud to mismanagement to abusive behavior to unjustified fines, issues can run the gamut."
H.B.56, entitled "Condominium Amendments," would charge all condo owners belonging to a HOA an annual $2 tax. That tax would fund the Utah Office of the Property Rights Ombudsman to step in and settle disputes between HOAs and owners.
The Condo Owners Coalition of Utah, started two years ago by Salt Lake City resident Glenna Tibbetts, represents individual condo owners and has worked with Litvack in pushing for more protective legislation for them. Tibbetts founded the coalition after her building realized their growing monthly dues were not going into the building.
"Money was disappearing," she said, "and the building was becoming rundown. Financial documents disappeared and votes were clearly being altered."
It took an attorney pressing the board president of her HOA with legal action to release information that should have been public to any member of the association.
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"People always say if you have a bad board, vote them out," Tibbetts said, "but it was never that simple for us. The corruption went too far."
It’s the added government involvement that has lodging associations, property managers and HOAs opposing the bill. The Utah Hotel & Lodging Association executive director Michael Johnson spoke against the proposed legislation.
"We feel the contracts written for homeowners in associations already have a form of resolution," Johnson said. "It’s better to handle issues at the private level rather than involve the sate."
The Park City Area Hotel & Lodging Association is on the same page.
"This bill requires extra funding in an economy where people are already pretty strapped," said Teri Whitney, the PCALA vice president. "It’s getting government involved with decisions on private disputes. In an HOA, there are already bylaws for how disputes should be handled.
"This just creates bureaucracy that’s unnecessary. Anyone that’s managed an HOA knows, this is added pressure and added cost."
Mark Rasmussen is the president of the Willowbend West Condos HOA in the Basin. Like Whitney, he is opposed to the bill.
"It’s total redundancy," Rasmussen said. "There is no need to get government involved."
The Community Associations Institute is fighting back against H.B.56. John Richards, a senior partner for Richards, Kimble & Winn Attorneys at Law and board member of the Community Associations Institute, is helping push back against legislation they say is destructive.
"The state would be involving itself in private party matters," he said.
The main purpose of the Utah Office of the Property Rights Ombudsman is to settle private land disputes involving a government organization. For example, the office would take on cases of eminent domain.
"This bill would be a major departure from the norm," said the Office of the Property Rights Ombudsman Director Brent Bateman. Bateman said the office had no official position on the bill, but added that it would be the first time they dealt with an issue between two private entities, in this case a condo owner and a HOA.
Litvack maintains the purpose of the bill is not to add unnecessary bureaucracy.
"There are situations out there that are untenable for condo owners," Litvack said. "If we could insert some mediation and avenues for recourse it could keep problems from getting out of hand.
"This bill is not about growing government, or about sticking government’s nose where doesn’t belong. It offers objectivity and accountability."
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An Idea Is Developed. A legislator draws from numerous sources in deciding what should be introduced in the Legislature as a bill.
The Bill is Drafted. The idea is submitted to the Office of Legislative Research and General Counsel, a nonpartisan legislative staff office, in the form of a bill request. The bill is given a number. A fiscal review is conducted and a "Fiscal Note" is attached. The bill is also reviewed for statutory or constitutional concerns.
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The Bill Is Returned to the Floor. Following the committee hearing the bill is returned to the full house with a committee report, either favorably, favorably with amendments, substituted, or tabled.
The Bill is Debated in Open Session. The bill is debated in open session. During floor debate, the bill can be amended, substituted or held. In order for a bill to pass the House of Representatives, it must receive at least 38 votes. The bill must receive at least 15 votes in the Senate in order to pass.
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