would require developers to turnover control of the HOA prior to reaching 100% build-out, and mandate HOA Board members to attain training, continuing education and licensing. Other provisions would require an HOA to meet additional regulatory requirements, which would impose
additional costs directly to homeowners and adversely affecting builders/developers. The HBASC supports H. 3886 with changes to the bill that was amended by Senator Rankin. The HBASC would like to thank Sen. Hembree and Rep. Atwater for their leadership and work over the last few years on HOA reform. We also wish to thank Jud Smith, Harry Dill, Dick Unger and Ryan McCabe for their continued efforts toward HOA reform.
The Bill Provides:
• Disclosure of governing documents to prospective buyers;
• Voluntary education for homeowners and board members;
• Prohibiting fees to access the governing documents online;
• Providing magistrate courts jurisdiction to handle disputes; and
• An HOA Ombusdman with the Department of Consumer Affairs.
Suggested Changes to H. 3886 as amended by Senate:
• The term “Declarant” is already a commonly defined term in most declarations. The new definition, as written, is wide-reaching and could be interpreted to include builders, real estate agents and other promoters of a community. Needlessly, placing liability on many parties.
• Specifically defining governing documents as: “Governing documents means any instrument: (a) establishing a homeowners association and governing its management or operation; and (b) including, but not limited to, the master deed or master lease, covenants, conditions, and restrictions, declarations, bylaws, and any amendments thereto.”
• Maintain disclosure but remove some of the added burdens to a voluntary board by including language that would allow a percentage increase cap of at least 10% to the annual budget, before triggering the requirement that notice to HOA members of a meeting to increase the annual budget be provided (i. e. increase in utility costs). These meetings will normally occur in November, which is shortly before the frequently used December 1 invoice date for the Annual Assessment, so advance notice of the decision would have little or no impact.
The HBASC supports and will continue to work toward a bill that will protect private property and homeowners’ rights, and provide a clear and defined set of rules and a consistent process that HOAs must follow for the benefit of the community and the homeowners.