Published in the ECHO Journal, August 2007
To All Concerned with the Health of Common Interest Developments:
The Executive Council of Homeowners (ECHO), on behalf of its more than 1,550 community association members and the more than 250,000 homeowners who live in ECHO-member associations, as well as on behalf of the millions of Californians who live in common interest developments throughout the state, asks you to contact your local California Senator and Assembly member to urge them to oppose AB 952 (Mullin). This bill will be voted on soon in both the Senate and Assembly; and if it passes, it will go to the governor for signature.
Oppose AB 952 (Mullin)
AB 952 prohibits the boards of directors of Common Interest Developments (CIDs) from levying assessments above current statutory limits for CIDs, unless a majority of residents in “affordable units,” also known as below market rate (BMR) units, and market rate residents approve by separate majority votes.
Giving BMR residents the unchecked ability to vote down assessments bestows a group of voters within the association disproportionate power and may cause financial instability within CIDs. If this small group denies needed assessments, home values and safety standards in these communities may decline.
Buyers have a right to know their risks upon purchase, but AB 952 does not require disclosure to purchasers regarding the presence of BMR units. ECHO believes that the presence of BMR units may contribute to significantly increased long-term costs because of their ability to veto assessments. AB 951 leaves potential homeowners unable to verify whether they will be subject to funding issues, and current owners will take on a financial burden they were unaware of at the time of purchase.
Currently, CID residents, managers, and boards may not know which units are BMR, but this information will be disclosed for election purposes under AB 952. Sacrificing privacy for BMR residents could result in these individuals being singled out and criticized in the event of a failed assessment.
Furthermore, because there are no requirements for ongoing income qualification for owners of BMR units, residents could potentially by subjected to the voting power of BMR residents earning equal or higher wages.
Subjecting community association members, who may be newcomers to homeownership or living on fixed incomes to the will of a small minority of BMR residents, is irresponsible. ECHO supports the author’s desire to protect low income CID residents but believes that an equitable solution would focus on municipal or county involvement.
AB 952 will prove detrimental to the health of community associations, ECHO urges you to contact your legislators and ask them to vote “NO.”
By the Executive Council of Homeowners (ECHO)