AHRC News Services

February 22, 2001

Hat Number One - The Law Professor

Katherine Rosenberry, a land use lawyer, has also been a professor of law at California Western School of Law in San Diego since 1978.

She teaches a couple of courses. She describes her area of specialty as "Common Interest Development Law, Land Use Regulations and Real Property Law" She is currently on sabbatical in England.

She states that she is advising the Lord Chancellor’s office in London on the "Commonhold and Leasehold Reform Bill" currently before the British Parliament. That is one hat.

However, there is another hat – one far less visible to the public – and one that should raise serious concerns.


Hat Number Two - the CAI Lobbyist

Katherine Rosenberry, however, wears a very different hat - and this is a more important hat for her.

In the U.S., there is a massive lobby group called "Community Associations Institute" – CAI for short. This nationwide lobby group is comprised primarily of lawyers who work on commonholds – or common interest developments (CIDs) as they are called in the U.S.

Allied service industries such as management companies, accountants, maintenance companies make up the rest of the membership. The few individual homeowners who are on it, tend to be mouthpieces for the CID industry.

For years, CAI touted itself as the voice of the homeowner – until homeowners caught the scam, and spread the word that CAI was an anti-homeowner trade lobby group.

However, CAI, either directly or through other lobbying groups that they create, have a virtual stranglehold on politicians around the country in virtue of the large contributions which they make to legislators.

One such large contributor was seen in a photograph with President Clinton before he left office. Individual homeowners simply stand no chance with the vast majority of legislators.

To illustrate, in the mid-nineties in California, all CID legislation was funneled through the Assembly Housing Committee, headed by a legislator appropriately named Dan Hauser. The night before a piece of key legislation was to be heard before the committee, CAI and its subsidiary lobbying group CLAC (California Legislative Action Committee), would wine and dine Dan Hauser and present him with an award. The following morning, Mr. Hauser would do their bidding at the committee hearing.

The consistent theme of all CAI proposed legislation was that it would benefit its members at the expense of homeowners. For instance, in California, CAI lobbied that homeowner association reserve monies (intended for repairs and replacement of common area infrastructure – such as roads) could be used to pay their lawyers’ fees. Of course, the bill passed despite the howls of protest from homeowners. One prominent CAI lawyer said – "Let’s open the champagne."

Another bill authorized unlimited attorney fees.

Another bill proposed that boards of directors could impose fines on homeowners – and then lien and foreclose on their homes to collect fines.


The CAI and Katherine Rosenberry

Ms. Rosenberry’s was not only a member of CAI, but was so deeply involved in its affairs, that she was its national president in 1988. Her resume makes absolutely clear that both before and after, she has been in the forefront of promoting the CAI agenda. For example, she is CAI's key lobbyist for legislation in California.

Parts of her agenda coyly characterize certain of her activities in such a way that the innocent observer would not suspect what is really going on.

For example, she states that she is on the Board of Governors of the College of Community Association Lawyers – and that "membership is by invitation only to those individuals who have at least 10 years of experience with common interest communities (condominiums, homeowner associations and co-operatives) and have demonstrated outstanding contribution to the field of community association law." Ms. Rosenberrry never mentions that this College is not really a college, and is a creation of CAI itself.

She lists herself as being on the board of directors of both the Community Associations Research Foundation and the National Board of Certification for Community Association Managers. The former is a creation of CAI, and the latter was formed by CAI lawyers to make sure that managers adhere to the CAI party line.

But the damage gets worse.

On her resume, she states that she was the "Senior Consultant to California Assembly Select Committee on Common Interest Developments: (1983 – 85). In other arenas, she has claimed that she wrote the "Davis Stirling Act", the 1985 legislation that governs CIDs in California. California homeowners have bitterly complained that, given her role as a leader of CAI, allowing her to write the CID legislation is analogous to permitting tobacco industry lobbyists to write legislation on the use of tobacco. Those two hats provide convenient cover.


Rosenberry's Law Comes Under Attack

As criticism of the Davis Stirling Act has mounted from all quarters, the California Legislature authorized the California Law Revision Commission to undertake a comprehensive study of that Act.

In a preliminary background report prepared for the February 2, 2001 meeting of the Commission, Prof. Susan French of the ULCA Law School catalogs numerous criticisms of the Davis Stirling Act. For instance, she states that

"------two major vices of Davis Stirling: they are very hard to read and they don’t clearly signal – if they signal at all – the true import of the statute."

She categorizes the coverage of the statute as uneven:

"The statute covers some areas in excruciating detail, and pays little or no attention to others."

Of major importance to homeowners is Ms. French’s criticism of the lack of any regulatory oversight. She points out that if homeowner association boards violate either the statute or the association’s own covenants, a homeowner has no choice but to file suit – and that is horrifically expensive.

Homeowners across the country point out that this is precisely the conflict of interest in which Ms. Rosenberry has been so deeply involved.

On the one hand, she holds a position of public trust as the author of legislation, while on the other hand she is promoting the interests of CAI , which is to use the savings and homes of citizens for lawyers fees.

CAI has fought regulatory oversight tooth and nail because it means that lawyers will get less fees if a regulatory agency, rather than courts, decide disputes in homeowner associations.


Rosenberry Admits that Davis Stirling is a Failure

Ms. French made further criticism of Davis Stirling, but the bombshell came when Ms. Rosenberry testified herself. She made two stunning admissions.

First, she stated flat out that Davis Stirling was a "mess" (exact quotation).

Second, she admitted that when she was drafting the Davis Stirling Act, she was told to keep all the key lobbyists happy – including CAI !!

Homeowners across the U.S. are incensed at these fresh revelations.

They are already in revolt from coast to coast. In Arizona and Nevada, homeowners have declared a boycott.

Criticism of CAI has been so severe that a past president of CAI admitted recently that "we are hated more than the IRS."


Rosenberry Selling CIDs to English Lawmakers

It is in this context and with this background that Ms. Rosenberry’s activities in England have to be seen.

One U.S. homeowner said recently, "The Brits would have to be crazy to adopt what Katherine Rosenberry is advocating. It has devastated American homeowners and it will devastate them also. This is one U.S. export which the world does not need."

A British reporter said, " This woman who created the residential rebellian in the United States is coming to create the same chaos in Britian."

Yet Ms. Rosenberry is trying to spread her CAI message in places such as Poland, Hungary, Czechoslovakia, in addition to England.

U.S. homeowners have far ranging criticisms of the CAI view of the world, but two central ones can be distilled.

The Flaws of CIDs

First, CID’s are presented as being homeowner-friendly – run by a volunteer group of your neighbors. The American experience shows that it often does not turn out that way.

Rather a small clique seizes power and the lawyers and other service providers unite to join them, because that is where they get their money. In fact, the lawyers often take over in order to make associations into cash registers for themselves. They provoke disputes, manufacture law suits – and pocket the money and often the homes themselves

Second, and related to the preceding, CIDs impinge on peoples’ lives to an extent unimaginable just a few short years ago. One can often not even plant a flower without obtaining association permission. Basketball hoops for children are considered worse than the plague. Instead of a castle, one has a hassle. The gospel of Uniformity and Conformity reigns in the land of the free.

A blizzard of rules, regulations and laws cabin, crib and confine the homeowner. In a recent poll done by NBC affiliate, Channel 3, in Las Vegas, a staggering 48% of people interviewed stated that they had experienced problems with their homeowner association. In a day long legislative hearing in Las Vegas in October 2000, homeowner after homeowner related horror story after horror story.

This is the vision of the brave new world for which Ms. Rosenberry is such an ardent apostle. But, U.S. homeowners point out, this is not a vision propelled by pure ideological principles – but rather, a vision driven by the ideology of money. She and the other CAI lawyers see CIDs as multi-branched money trees that will provide a perpetual and ever-increasing source of income.

The root of the problem according to many American homeowners is that American nemesis called money. The regulatory scheme is simply the battering ram to get inside. Once inside, the lawyers will have put in place an automatic money machine.


British Beware

Hence, American homeowners suggest to their British counterparts "Beware! Do not buy the seemingly beautiful package which is presented, because your very home is at stake!"