Why SB 1265 is Flawed

This November, voters will decide the course of real estate in many areas as Tax Transfer Initiative (Prop 5), and the Costa Hawkins repeal (Prop 10) will have their fate decided.

Another piece of legislation that has drawn criticism from real estate organizations, Common Interest Development attorneys and Community Associations is SB 1265. The bill would hurt HOA’s already struggling financially by allowing attorney fees to be collected for merely consulting with legal counsel prior to small claims cases.

There is a provision excluding joint owners of the same unit from running for the board or anyone with membership of 12 months or less. It seems a bit discriminatory in that a distinction is drawn between a sole owner and joint owners as separate classes or groups by excluding joint owners, many of which members of a household.

The process would include allowing the association to amend the Bylaws upon member approval, which again would hurt financial insolvent associations because the cost could range from $10,000.00 to $20,000.00.

The law would allow delinquent home owners to serve on the board setting a bad example for other delinquent owners who could say well if the board members don’t have to pay their dues why should I?

This bill would not be fair to the members of associations throughout the state who carry the weight of delinquent owners especially in those in financial dire straits. HOA’s currently paying a management company would incur more cost during an election because the law would require hiring a separate party to oversee the mailing of election rules.

Privacy would also be threatened by this law because members would be allowed to not only identify proxy holders but copy proxies and voter signatures. This law along with SB 1128(amendment to SB 1165) requiring associations to allow felons on a CID board of directors is bad for all Common Interest Developments.

 

Blog by M.A. Williams