Reader Questions - Who Watches Our HOA?

Dear Kelly,

Is there any agency – state, county or city – that oversees HOA boards? I am extremely frustrated by mine, and have been for years.

C.C., San Diego

Dear. C.C.,

No, in California there is no agency overseeing common interest communities. It is left up to the individual communities to operate themselves properly, and if they do not, a member has recourse to the courts (and often the reimbursement of attorney fees if there are successful).

Thanks for your question,
Kelly

Hello Mr. Richardson,

I want to thank you for your articles dealing with HOAs. However, [in an article last year] these words you wrote stayed with me because it is in my opinion, the trouble with Davis-Stirling. You wrote that there is no state agency that enforces the Davis-Stirling Common Interest Development Act. I believe forcing people to hire their own lawyer to enforce this is simply disgusting because most people do not have the funds needed to hire an attorney. Do you support developing an agency to enforce Davis-Stirling?

Thank you,

C.R., Sun City

Dear C.R.,

Our neighboring state Nevada has a state agency which governs common interest communities. By all accounts, the arrangement is working quite well. However, Nevada has 3,200 associations, while California has at least 45,400 associations (Foundation For Community Association Research 2016 Factbook). The massive size of this housing sector in California would require a very large bureaucracy, funded almost certainly by a tax on all association residences. So, I think it is unrealistic to expect a state agency in our state to oversee all those associations.

I favor manager licensing in California, if properly established. Many states have manager licensing, and the Community Associations Institute has developed a model for licensing which has proven to work in a number of states. However, the massive number of managers in California makes the creation of a licensing body a major venture, with the many thousands of persons currently managing associations in the state.

Therefore, the best protection for California homeowners comes from hiring and keeping very good managers and from homeowners becoming much better informed about their rights and responsibilities in their associations.

Thanks for your question,
Kelly

Dear Mr. Richardson,

I live in a small condo which is unincorporated. One of my neighbors said that we are supposed to be filing papers and paying fees to the Secretary of State. But according to one of your recent columns, it sounds like only incorporated HOAs need to file papers. Is that correct? Do unincorporated HOAs need to file or pay anything?

Thank you,

A.D., Redondo Beach

Dear A.D.,

All associations, whether incorporated or not, are required by Civil Code 5405 to file two documents, the SI-100 and SI-CID, with the Secretary of State every two years. The forms are available on line. Incorporated associations failing to file can be suspended pursuant to Civil Code 5405(d), rendering the corporation as not recognized as existing. A suspended HOA’s corporate name is not protected, and it cannot appear in court to defend itself or to pursue a claim. However, there is no penalty stated if the unincorporated association fails to file, meaning there is no reason for those associations to file. Check association corporate status at www.businesssearch.sos.ca.gov.

Thanks,
Kelly

Written by Kelly G. Richardson

Kelly G. Richardson Esq., CCAL, is a Fellow of the College of Community Association Lawyers and a Partner of Richardson | Ober | DeNichilo LLP, a California law firm known for community association advice. Submit questions to [email protected]. Past columns at www.hoahomefront.com. All rights reserved®.