Call to Action: Legislative Alert

Are you on top of what is happening with your state legislature and how it could affect community associations? Sometimes new bills can be drafted and move quickly through the process before you are even aware of what is happening. New legislation can have a tremendous financial impact on the community association industry and your association in particular.

First, if it has been a while since you last looked, take some time to review your current federal and state regulations. Next, get in the loop on what is happening in regards to community associations.

• Contact your association attorney to obtain details on upcoming legislative matters.
  
  
• If you are not a member of your local CAI chapter, join now and participate in the Legislative Action Committee.
  
  
• The national organization of Community Associations Institute at www.caionline.org offers a vast array of legislative updates and information.
  
  
• •Check online with your state legislature website and research bills in progress.
  
  
• Contact your legislator if you have an opinion or want to provide insight on a bill.
  
  
• Locate industry lobbyists who have contacts with the legislators
  
  

How can you determine what is important? Discuss with other board members, and establish a priority system regarding legislation. Here are just a few examples of proposed legislation that could be in the legislative process, and depending on your association, may or may not have a significant impact on your community’s operations.

• Budgeting and reserves
  
  
• Construction defect
  
  
• Association taxation
  
  
• Manager credentialing
  
  
• Telecommunications
  
  
• Assessment collections
  
  
• Foreclosures
  
  
• Resale or annual disclosure

High Impact: Examples might be legislation mandating that the Association conducts an annual audit or an annual reserve study, or that requires homeowners to be elected or appointed to associations’ boards of directors during developer controlled periods. This type of legislation has a financial impact on the Association’s budget, and may require additional expense, which in turn could mean raising assessments to offset the expense. If yours is a self-managed community, you could be impacted by legislation that would require your association to operate within parameters that necessitate additional staffing and/or a management company as the laws become complex in nature.

Medium Impact: Examples would be legislation that requires community managers or the management company to be licensed by the state. While this does not have a direct impact on the association, credentialing and/or licensing could be seen as a positive enhancement to the industry. Professional, credentialed managers can provide better quality management services.

Low Impact: Examples would be regulation for resale disclosure or even collection procedures. This type of legislation will generally impact specific owner(s) rather than the association. For instance, new legislation on assessment collection may require notification prior to a lien filing, and all expenses incurred for that notification can be collected from the past due owner, thus impacting the owner, not the association.

As legislative bills are drafted, re-drafted and amended, the ultimate step may be for the board of directors to become involved in the legislative process. Direct testimony at legislative hearings, creation of supporting materials, the retention of lobbyists, etc. are effective, proactive steps the board can take. Deciding “how to decide” which action to take (if any) regarding specific legislation is a challenge, especially given the incredibly tight schedule legislators typically work under with “last minute” amendments. It is important to have an effective communication vehicle in place to respond immediately when the need arises.

And, remember that legislation is not always a bad thing. There will be times that legislative ideas are wholeheartedly supported in the community association industry. The only way to determine if a proposed bill is good or bad for YOUR community is to get involved, follow the progress of the bill, learn the benefits and disadvantages of it and who and why legislators and lobbyists support or oppose it, and let your elected officials know your association’s position on it. You CAN make a difference.

Mark Lewis, AMS®, CMCA®, PCAM®
President/CEO
Community Archives
Tucson, AZ