January 4, 2001
By
Larry Wills
It all started out
innocently enough, with a Hobbesian agreement to enjoin in a social contract
whereby your neighbor can't put a Ford up on blocks in his front yard.
Next thing you know, a
fascist regime is picking your pocket and selling your home out from under you.
No, it's not the heavy-hand
of government. It's the heavy hand that pretends it's a government--homeowners
associations.
While some associations
seem to be working as intended, keeping subdivisions manicured and protecting
sterility, in others, complaints are legion. Which is why the Legislature established
an ombudsman's office.
Now, calling that effort an
utter failure, the Legislature is going back to the drawing board to rewrite
community association laws.
"The idea looked great
on paper," state Sen. Ann O'Connell, R-Las Vegas, says.
"In reality, it hasn't
worked."
But just how to make the
clearinghouse for homeowner complaints more effective is another matter.
O'Connell wants to dissolve
the office and create a commission to settle disputes.
State Sen. Mike Schneider,
D-Las Vegas, likes the idea of a commission.
But Schneider wants to keep
the ombudsman's office, placing it under the attorney general's office. Right
now, it's part of the state real estate division and caught in a tangle between
the politically powerful community association industry and the homeowners.
"I'm the one who
started the whole thing," he says of the ombudsman's office. "I tried
to get it under the attorney general's office in 1997, but that was blocked by
the Republicans. Now I think it would be better under (the AG's) consumer
affairs division."
There's a lot at stake on
this issue. The common interest communities ombudsman fields complaints and
mediates disputes between homeowners and their associations. Without some
grievance mechanism, homeowners would have nowhere to go except the courts.
Revamping the office is
part of a package of proposed community association reforms coming in the wake
of a stormy hearing last fall. Often emotional residents complained about
abuses by boards and the loss of property rights.
O'Connell says new enforcement
powers are coming to protect homeowners' rights.
It will be the third time
the Legislature has tried to straighten out problems with association
governments that have included selling homes for unpaid assessments. At least
two residents fell victim to neighborhood feuding and found they were losing
their homes. One home sold for $10,000.
The common interest
communities ombudsman is at the heart of the controversy. Mary Lynn Ashworth
was named ombudsman after the last legislative session and, according to
various sources, found herself at cross purposes with Joan Buchanan,
administrator of the real estate division, in charge of the ombudsman's office.
The result has been
confusion over whether the office is serving the homeowners or the managers of
associations, represented by the Community Association Institute.
That in turn has inflamed
CAI critics, who filled last fall's hearing room with a parade of horror
stories.
O'Connell says proposed
reforms include replacing the ombudsman with a local-level independent
commission which will rule on complaints. The commission would be funded by a
$3 a year assessment on homeowners that was created in the last session for the
ombudsman's office.
"People are paying for
something they're not getting," O'Connell says.
The ombudsman's office was
slow in getting started because the money was not released until last year. The
three-person staff was funded only three months ago and it handles 1,000 calls
a month.
The office handles
complaints on foreclosures, selective enforcement, embezzlement and obstruction
of information to the homeowners.
Ashworth calls the
reorganization a mistake. "They're taking out state oversight.
"That's disastrous for
the rights of homeowners."
O'Connell says the bills
address kinks in the entire process of association governance.
"The system certainly
is not working."
But Assemblywoman Vonne
Chowning, D-Las Vegas, says the ombudsman has been effective.
"It has served such a
good purpose. Without this office, we might not have known about some of these
problems.
"I can't see doing
away with this position. It's a tremendous resource."
O'Connell's proposal
includes creating separate rules for large and small associations and giving
the commission adequate enforcement powers.
"We need due process
for the homeowners and to give more authority to the commission," the
senator says.
She envisions the
commission to be independent from the state and to operate at the local level.
Under the plan, the
commission would consist of four homeowners and three representatives from the
association industry. Appointed by the governor, it would have judicial powers,
including powers to remove board members and enforce association rules and
state laws. The ombudsman does not now have that authority.
Chowning also wants full
disclosure on any association problems to be required before property can be
sold. She says some buyers have been blindsided by undisclosed association
conflicts.
She says many buyers don't
realize the implications of buying into associations. "You're not in this
dwelling by yourself. You are a member of association."
O'Connell acknowledges the
rift between the association industry and many homeowners isn't going to make
enacting reforms easy.
For example, placing it
under the attorney general has wide support from homeowner activists, since it
would have greater authority and fewer conflicts of interest. The CAI would
rather avoid any infringement on their power.
The bills were submitted
after residents told the legislators their property rights were being
endangered by arbitrary association boards.
O'Connell and Schneider
have been inundated with complaints since last fall's hearing.
"I have three feet of
paperwork on these complaints," O'Connell says.