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August 2008 ISSUE
We do not make jokes, we simply watch the LA Times, the Orange County Register and CID/HOA board of directors and report the facts!
California Association of Realtors: Pick a Lane!
The CAR that doesn't know what lane it's in
August
6, 2008
by
Donie Vanitzian, J.D.
Assembly
Bill 2259 is a farce, a contradiction in both
terms and alliances.
Yes, it's no secret! I've
written my share of letters to the legislature and to
the California
Association of Realtors (CAR) explaining problems
with their sponsorship and introduction of assorted
legislation pertaining to deed-restricted residential
common interest developments, e.g., condominiums,
co-ops, timeshares, and so on. As expected, I'm
ignored with equal silence.
I laughed out loud as I read
this August 4, 2008 quote from Alex Creel, Senior Vice
President and Governmental Affairs Chief for CAR, a
sponsor of Assembly Bill 2259, "This is a
straight forward property rights issue." [FN4]
Straight forward? Property rights?
The article's author Gary Quackenbush speaks of
"covering disclosures upon sale of property . . .
to provide protection to owners who are opposed to
leasing restrictions by giving them vested rights."
Gee, I wonder where they all picked up THAT phrase?
Forget for a minute that in
2006, I mailed to the California Association of
Realtors and to the L.A. City Council, and
hand-delivered to Mayor Villaraigosa, and Congressman
Rosendahl's office, a lengthy letter detailing that
very problem and noting a decline in available rental
properties and the lack of incentives for being a
landlord. I demanded emergency legislation to
effectively ban restrictions on rentals imposed by
homeowner associations, namely prohibiting
associations from amending, restating, rewriting or
altering their governing documents and covenants,
conditions, and restrictions (CC&Rs) in any way
that would prevent titleholders from renting out their
properties.
The concept of deed-restricted
titleholders having a "vested interest" and
"vested rights" in their property was first
introduced in the book Villa Appalling! Destroying
the Myth of Affordable Community Living, by D.
Vanitzian and S. Glassman, published in 2002. I
delineated the "Vested Rights Dilemma" in
greater detail in the reference book Common
Interest Developments- -Homeowners Guide, Expert
Series, by D. Vanitzian and published by Thomson-West.
In Villa Appalling!
authors D. Vanitzian and S. Glassman, posit that
"the solution to the tragedy of the commons can
be found in what they term the 'Vested Rights
Dilemma.' That Dilemma recognizes what the
deed-restricted development purchaser believed all
along, that is, the titleholder has certain rights
which vest upon purchase. That deed-restricted
titleholder cannot be deprived of his rights by
covenant, rules, bylaws or any other folly of an
association’s board of directors or even the
legislature. Those titleholder rights were
coupled with an interest, bought and paid for with
legal tender. [FN1]
"The Dilemma is that the
owner living inside the deed-restricted
development believed he had all the rights of an owner
living outside a deed-restricted development,
namely, traditional home ownership. Not only are
the rights of the one living inside severely limited
or eliminated, those few remaining rights, which he
believed were vested when he paid for his 'space,' [FN1,2]
are revocable at will--the board’s will,
not his. [FN1]
"What courts and
legislatures do not want to recognize is that, at the
time of purchase, those 'rights' became vested.
The owner bought and paid for them. Either the
owner has these rights or he doesn’t. If the
owner has them, they are vested and they cannot be
'taken,' either by legislative caprice or covenant,
i.e., by any means not applicable to all property
interests. And a non-governmental homeowner
association certainly could not take those rights
away. [FN1]
"On the other hand, if the
owner doesn’t have them, then they also cannot be
'taken' from him by a board or the legislature or the
courts. [FN1]
"That’s the dilemma.
Either the owner has them or he doesn’t.
Either way, they should not be able to be taken
away." [FN1,2]
Quite beyond coining the terms,
I have fought to have titleholder interests not only
recognized and respected but strengthened and
codified, in contrast to and against CAR which fights
to erode owner interests, to reduce them to pawns in
the developer-realtor- management industries’
hegeomony.
Remarkably,
Assembly Bill 2259 now contradicts provisions
written into Assembly Bill 980 sponsored by none other
than, the California Association of Realtors (CAR).[FN5]
It didn't matter how many letters I wrote to the
legislature and all the relevant Committees, and to
CAR: all were ignored and none were listed in public
Opposition to the bill despite the obligation to do
so. Nor did it matter how many treatises I wrote, how
much research I did on the laws and crossovers, how
many requests I fulfilled to send them the underlying
information- -except to maybe "borrow" some
of my extensive research that did not appear in any of
the earlier legislative drafts--CAR and the
legislature paid attention to none of it. Thus,
CAR excised ALL residential deed-restricted common
interest development property transfers from the
protections of fee disclosures mandated in Assembly
Bill 980. What does this mean? Simply put:
ANY property-related title issues for this now
inferior sub-group of titleholders is exempt from the
laws meant to protect all other "real"
property owners. [FN 2,3]
So much for CAR's being "straight forward."
But suddenly CAR and the
California legislature want it both ways. They
apparently believe that THEY -- not the board of
directors -- can decide whether or not a homeowners
association can amend, rewrite, and restate covenants,
conditions, and restrictions as it relates to renters
and rental property. "No" to
transparency protecting owners from bogus transfer
fees but lots of it lest deed-restricted property not
be rentable -- hey, they want us to be able to rent
out property out don't they? Gee, thanks for the break
. . . that's really no break at all because it
conflicts with a myriad of other laws. Just as CAR
appeared to have failed in performing the vital due
diligence in pushing Assembly Bill 980, so too, they
failed to perform the proper due diligence with Assembly
Bill 2259. The difference this time? I
refuse to tip them off as to what conflicts exist.
Bad law forces consumers to pay
higher prices, clogs our court system, and casts a
pall over this type of property ownership.
But I digress -- Respectfully, it is this author's opinion that the only reason why Assembly Bill 2259 is now coming to the fore despite my years of writing about these problems for at least the past twelve years, obviously, in my view, it is because of the housing crunch. Agents and brokers are hard pressed for sales. Leases and rentals are the new market. With so much housing now within common interest developments controlled by homeowner association boards of directors who interfere with individual rentals . . . well, you get the picture. Apparently what CAR wants CAR gets, no matter how flipped their flops.
| About the writer: Donie Vanitzian, JD, co-authors the Los Angeles Times’ Associations column and is co-author of Villa Appalling! Destroying the Myth of Affordable Community Living. She is author of Common Interest Developments- -Homeowners Guide, Expert Series. She can be reached by writing to Post Office Box 11843, Marina del Rey, CA 90295. |
Works
Cited
[FN1] D.
Vanitzian & S. Glassman, Villa Appalling!
Destroying the Myth of Affordable Community Living, A
Textbook for Understanding Common Interest
Developments (2002).
[FN2] See
D. Vanitzian & S. Glassman, Villa Appalling!
Destroying the Myth of Affordable Community Living, A
Textbook for Understanding Common Interest
Developments (2002); D. Vanitzian, Common
Interest Developments- -Homeowners Guide, Expert
Series ed. 2007-2008 (Thomson-West) ;
www.vanitzian. com. See also Civil Code §
1351(f) (re: "space").
[FN3] S.
Glassman & D. Vanitzian, What's Really So Bad
About Rental Units in a Condo Complex?, L.A.
Times, July 2, 2006.
[FN4] Gary
Quackenbush, Bill Would Prevent Homeowner Groups
From Banning Rentals, Aug. 4, 2008 No. Bay Bus.
Journal.
(http://www.busjrnl.com/article/20080804/BUSINESSJOURNAL
/706798998/ 1207/BUSINESSJOURNAL02)
[FN5] D.
Vanitzian, Veto Assembly Bill 980 Before There's No
More Gold in the Golden State, CentralValley Bus.
Times, Sept.18, 2007.
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