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Minutes for HB2629 - Committee on Local Government
Short Title
Homeowners associations subject to consumer protection act; annual registration; fee.
Minutes Content for Thu, Feb 15, 2018
Chairperson Williams opened the hearing on HB2629.
Mike Heim presented an overview of the bill.
Proponents
Representative Schwab testified as a proponent of the bill, stating that Kansas has the Kansas Uniform Common Interest Owners Bill of Right (UCIOBOR),but it has no enforcement mechanism. This bill allows enforcement of points in the Bill of Rights. He also noted the registration fee and corresponding funding for it in the bill is a potential point of negotiation. (Attachment 1)
Scott Wircenske gave written testimony in support of the bill citing his personal experiences trying to get information from an uncooperative Home Owners Assn (HOA) and concluding with while the Home Owner's Bill of Rights sets the ground rules, there are no remedies without having to take significant legal steps. HB2629 is absolutely essential to the residents of Kansas to ensure complete transparency by HOAs.(Attachment 2)
Nila Ridings gave written testimony in support of the bill citing her person experiences with corrupt dealings with an HOA. She stated that home owners who contest HOAs struggle to absorb the cost of legal battles while the HOAs are funded by their dues and insurance companies. She said HB2629 would help remove the massive powers from the corrupt and abusive fiefdoms know as Home Owners Associations. (Attachment 3)
Chairperson Williams closed the proponent section of the hearing and called for discussion. It was determined that home owners associations are usually established by the real estate developer but continue after the developer has moved on from the project. The quality of the HOAs vary greatly across the state according to the skills of the people managing them.
Chairperson Williams asked if the Attorney General's office would need more staff to handle duties assigned by this bill. Yes. The fees given in the bill will fund 2.5 full-time staff to handle these duties.
Chairperson Williams asked Legislative Research to review what other states are doing to handle similar problems. Updates can be added to the common Dropbox for this bill.
With the discussion ended, Chairperson Williams called for opponent testimony.
Opponent
Ron Hoffman testified in opposition to the bill, asking if the Consumer Protection Act is the proper vehicle to provide oversight of HOAs. He presented 13 questions to be considered before pursuing the bill. (Attachment 4). The Committee asked for supplemental testimony which will be submitted after the meeting. (Attachment 23).
Jason Watkins testified in opposition to the bill, noting that he helped write the Home Owners Bill of Rights, and he favored some of the elements of HB2629 but he had a problem with the fees being charged. Members of Home Owners Associations have already paid taxes that support the Attorney General's office. Why should they pay a second tax to fund this function? (Attachment 5)
Ronald W. Nelson testified in opposition to the bill stating that the majority of Home Owners Associations are run by volunteer boards who are not trained in the law, who are not familiar with parliamentary procedure and who do not understand the rules of the Open Meetings Act. They perform in good faith but might come up lacking when reviewed by the Attorney General's office. He also found the definition of "consumer" in the bill to be too broad and that it would leave the volunteer board at risk to a wide-range of potential complaints that could devastate the home owners association. Yes, he agreed, there are abuses, but these remedies are too strong for the problem. (Attachment 6)
Richard D. Simpson provided written testimony in opposition to the bill stating that his HOA has operated for many years and never had a conflict that could not be resolved within the framework of their governing documents. He was concerned that allowing Consumer Protection complaints against the HOA would have a deleterious effect on their ability to recruit new board members.(Attachment 7)
James A. Tiehen provided written testimony in opposition to the bill stating that his property management firm manages over 30 associations with 4,000 homes across the state of Kansas. The day-to-day management of an association is routinely challenged because homeowners do not follow their deed restrictions and then they become upset when rules are enforced. He is concerned that these routine challenges could all end up in the Attorney General's office, challenging every decision made by the HOA. If this happens, then no one would volunteer to be on the HOA board.(Attachment 8)
Rick Allen provided written testimony in opposition to the bill, stating that he has spent 9% of his life serving as a board member for his local HOA. In that time he has never encountered a problem that required the State of Kansas to intervene. The thought of paying up to $500 annually to invite that opportunity is beyond comprehension. The only major accomplishment of the bill would be to reduce enthusiasm for board service.(Attachment 9)
Eleven citizens provided written testimony with form letters stating that they are board members of various HOAs. They are concerned that any of their acts or omissions could be misconstrued to violate the Kansas Uniform Common Interest Owners Bill of Right. If directors are going to be subject to investigation by the Attorney General's office for every decision they make, they are concerned no one will volunteer for these jobs. The citizens who submitted letters are: Lawrence Belt (Attachment 10); Anne Bowman (Attachment 11); Cindy DuMirten (Attachment 12); Gordon Graham (Attachment 13); Gary Jones (Attachment 14); Glen Lowe (Attachment 15); Rick Menke (Attachment 16); Michael Peleg (Attachment 17); Tom Shrader (Attachment 18); R. Gibson Sloan, III (Attachment 19); and Frances Woods (Attachment 20).
With the opponent testimony finished, Chairperson Williams closed that section of the hearing and opened the Neutral testimony.
Neutral
Patrick Vogelsong testified as neutral on the bill, noting that concerns have been raised about HOAs being run in a fair and equitable manner. This bill would be a mechanism to resolve some of those issues. However, many individuals who serve on boards are volunteers who do not understand the legalities concerning HOAs. There is concern how this would affect them and how it would affect insurance on the properties.(Attachment 21)
Derek Schmidt testified in writing as neutral on the bill stating that the Attorney General's office will respond to the responsibility given to it, if it is given the staff to do the job. (Attachment 22)
Chairperson Williams closed the hearing on the bill. The meeting was adjourned at 2:23 PM.
