Homeowners who live in a homeowner association are becoming an even more endangered species. The reason? Lawyers who earn substantial incomes from homeowner association have devised a new way to keep up their relentless attack on the assets and pocketbooks of those homeowners. They are pushing AB 1025 whioch seeks to commandeer the escrow process to collect their fees. The background to AB 1025 is one small but significant window into how the lawyers work behind the scenes to snare homeowners in ever more complicated legal webs.

AB 1025 is a bill which is craftily crafted by lobbyist attorneys for CAI (Community Associations Institute - a trade group of vendors, primarily lawyers, to homeowner associations). Analysis shows that it will devastatingly erode the rights of the 6 million Californians who live in homeowner associations. In brief, this bill will wreak the havoc in the following way.

In homeowner associations, boards of directors hold unprecedented sway over the daily lives of homeowners. By being prosecutor, judge and jury in cases where there is a dispute between the board and a homeowner, they wield unbridled power. Currently, when a homeowner enters an association, he/she in effect leaves the United States, because the basic due process rights of the Constitution do NOT apply.

The CAI lawyers, who in effect run homeowner associations, and who utilize boards of directors as cash registers for themselves, have sought over the years to utilize every means possible to collect their fees and other charges from homeowners. Ever since Governor Wilson vetoed a bill several years ago to allow fines imposed by boards to be liened against a homeowner's property, CAI lawyers have been questing for a new way to collect these monies.

They have now latched on to the escrow process as a collection method. Using the time-honored method of presenting a seeming sob story as a front for more devious purposes, they have got the escrow folks to present the relatively minor problem of locating the association's financial representative in an escrow for assessment information. This problem could be remedied in a variety of far less draconian ways - but no, the CAI lawyers have seized on the escrow process as a golden opportunity to collect the gold.

As the current wording of 1363.6 (a) clearly shows, this bill allows a board to record with the County Recorder a statement not only of unpaid assessment, but also of "fees" and "similar charges". This broad umbrella allows virtually anything to be included. In practical effect, it undermines Governor Wilson's veto by allowing a lien to be placed against the homeowner's property

The homeowner who is in escrow is now in the vise of extortion, pure and simple. Under intense pressure to meet the time deadlines of his/her escrow, he/she does not have the time to remove the incorrect charges through the legal process. Furthermore, when the homeowner calculates the cost of a lawyer and the associated legal costs to dispute the contested charges, he/she may simply conclude that on a cost/benefit analysis, it is cheaper to pay the incorrect charges. This is another classic example of contemporary white collar extortion.

This bill needs significant re-drafting to protect the 6 million Californians in homeowner associations. For example, California Civil Code 1363.6 (a) could be re-worded as follows:

"In order the protect the interlocking rights of homeowner associations, and the buyers and sellers of separate interests in common interest developments, boards of directors who elect the record information with the County Recorder under the provisions of this bill MUST include at least all of the following information:

0. as currently drafted
6. All lawsuits currently filed by or against the association, and any legal judgments already imposed on the association.
7. A statement of any known construction defects in the association, including those on the separate interests within the association.
8. A verified list of unpaid legal judgments against the owners of separate property within the association. This act specifically excludes the recording of claims by the association against the owner of a separate interest for which the association has not obtained a legal judgment."

The above is but one small sample of how lawyers work ceaselessly behind the scenes to further hamstring homeowner associations. As 6 million Californians are affected by the efforts of these lawyers, AHRC believes that their actions should be brought to the attention of these homeowners.

American Homeowners Resource Center -AHRC-(pronounced ARK)- is an association of individual homeowners formed:

0. To help preserve the constitutional and legal rights of homeowners.
1. To provide information to homeowners on those rights.
2. To help homeowners to protect and preserve those rights.
3. To publicize violations of those rights.
4. To remedy abuses of those rights by education, mediation, legislation and litigation.