THE TEMPLE OF BLAME AND WHOLESALE TITLEHOLDER DISENFRANCHISEMENT

January 17, 2008

Via facsimile and United States Postal Service Mail



California Law Revision Commission
4000 Middlefield Road, Room D-1
Palo Alto, California 94303-4739

Attention: Mr. Hebert

THE TEMPLE OF BLAME
AND
WHOLESALE TITLEHOLDER DISENFRANCHISEMENT

Re: Statutory Clarification and Simplification of CID Law

Table of Contents

? I. "Due Notice" to All Common Interest Development Titleholders
? II. Fiscal Impact on the State of California
? III. Gaping Loopholes and Crossovers Exist in the California Law Revision Commission's Proposed "Statutory Clarification and Simplification of CID Law"
? IV. CLRC's Circumvention of Public Complaints
? V. Bypassing the Legislative Process by Using "Made to Order" Changes That Include Altering Substantive Issues Resulting in Titleholder Disenfranchisement
? VI. Moratorium on Changes to Davis-Stirling Act; No So-Called Bill of Rights Needed; Creation of Victim's Fund for Deed-restricted Owners
? VII. Voluntary Waiver
? VIII. Warning "The Staff Recommends Against That Change"


Dear Mr. Hebert,

When are you finally going to get it?
There's nothing "simple" about this project of yours, but there's everything "complicated" about it.
What's the rush? Why does it seem that you are in such a hurry to push through this pork-barrel project of yours? Could it be because your aiders and abettors over there in the California Legislature are headed for terming out their term limits and the money party might be nearing an end?
Its been a good year for you and the Commission Mr. Hebert, you've all collected another year's worth of salaries, while the rest of California residential deed-restricted titleholders have been paying, paying, paying, with no end in sight. Now, with your so-called S-i-m-p-l-i-f-i-c-a-t-i-o-n nonsense, they will keep paying, but the difference will be that they will be paying more.
Typical of the California Law Revision Commission, rather than concentrating efforts in cleaning up the Probate Code, Evidence Code, Court Gridlock, Code of Civil Procedure, you now float to the surface of the shallowest of ponds whose laws encompass Common Interest Developments. You dig the biggest hole, as the Commission did in 2000, and then throw the statutory-financers, that is, the "Titleholders" into that hole to sink or swim on their own. You do this with no quantifiable result of your past projects and with criticism of such past projects gaining momentum.
Typical of the California Law Revision Commission, it has trivialized its latest project called "Statutory Clarification and Simplification of CID Law."
Typical of the California Law Revision Commission reports to the public that it will be several years before this is presented to the Legislature, now, while you have ratcheted up the speed in the fast lane, you signal right and turn left into the 2008 legislature.
Frankly, I'm really interested in exactly HOW this entire project of yours came to be in the first place and exactly who's idea it was. No, the owners didn't want it. The Owners wanted fairness--which your Commission purported to give them for several years in a row. That so-called fairness was an unmitigated failure.
It now appears clear; that so-called fairness campaign was nothing more than a ruse meant to create havoc in order to substantiate your bigger cash cow titled the "Statutory Clarification and Simplification of CID Law." If I didn't know better I'd claim this is a calculated fraud perpetrated on the public for no other reason than to rewrite a law that has existed for two decades, that people have come to know, and that the Legislature refuses to amend properly prior to its and the many other Chartered amendments.
It appears that it is easier to rewrite than to do it right in the first place.
That aside, the California Law Revision Commission should not submit its so-called handy work under-the-guise of "Statutory Clarification and Simplification of CID Law" to the Davis-Stirling Act in 2008 to the Legislature. As usual, it is half-baked and ill-thought out.
A project this massive and with far-reaching consequences for millions of titleholders should be written (or, as it pertains to Mr. Hebert's tutelage, REWRITTEN) with greater care. Introducing a wholesale rewrite as you are presently doing should wait until well after 2008, if it is introduced at all.
When the public refers to distrust of government, they are referring to actions such as described in this correspondence.

I.
"DUE NOTICE" TO ALL COMMON INTEREST DEVELOPMENT TITLEHOLDERS

The California Law Revision Commission has a higher duty to the public than it is practicing.
If the California Law Revision Commission really wants the input of owners, and not just industry lawyers and industry in general, then immediately without delay, purchase and place full page advertisements in major newspapers throughout California for one year and simultaneously send them to EVERY common interest development titleholder informing them that you are going to be altering said laws, that means ALL the laws that pertain to this type of deed-restricted property ownership.
It is not enough to claim that because the California Law Revision Commission has an Internet website that is sufficient "notice." It is not.
Every owner is not computer literate.
Every owner does not have a computer.
Every owner cannot afford a computer.
Every owner cannot afford Internet access.
Every owner is not aware of the California Law Revision Commission, what you are doing, what you do, what your import is on their ownership, and who pays your salaries; but more to the point, they are absolutely unaware that your actions will detrimentally affect the lives of millions of titleholders and prospective titleholders.
I am appalled at the California Law Revision Commission's ill-conceived project and the speed and momentum this so-called Agency is generating for its personal project. The wholesale rewriting and revamping of a substantial statute, i.e., the Davis-Stirling Act (Civil Code Sections 1350 through 1378) should be better thought out and in a sense, "beta tested" prior to deciding which laws will become incorporated into the present code, and which laws will be amended.
The California Law Revision Commission needs to take into account that millions of titleholders in California are unaware of the CLRC's existence and/or import. While the California Law Revision Commission may receive some letters from titleholders, the majority of the public is absolutely unaware of:
(a) what the California Law Revision Commission has in store for them and are therefore unable to comment or participate in any meaningful way;
(b) what the California Law Revision Commission's purpose is, and what it does;
(c) that the California Law Revision Commission has a heavy influence in the statutes and laws governing how this segment of residential deed-restricted titleholders will buy, sell, own, and rent, within the confines of common interest developments throughout this state.
Those who are aware are not quite sure that they fully understand the effects of the CLRC's wholesale rewrites.


II.
FISCAL IMPACT ON THE STATE OF CALIFORNIA

California is presently cash and income strapped to the extent of at least $14.5 billion dollars in debt with proposed cuts to be made in every State Department.[1] One can only hope that one of the departments that will be faced with budget cuts will be the California Law Revision Commission.
Perhaps the reason you appear to be impetuously pushing this project through is precisely because of those budget cuts and your fear the project will be axed.
The proposed changes, i.e. "Statutory Clarification and Simplification of CID Law" are anything but "simple." They are complicated with far-reaching consequences for those who will be bound by them.

III.
GAPING LOOPHOLES AND CROSSOVERS EXIST IN THE CALIFORNIA LAW REVISION COMMISSION'S PROPOSED "STATUTORY CLARIFICATION AND SIMPLIFICATION OF CID LAW"

Coincidentally, too many of the changes the California Law Revision Commission proposes to incorporate into said text, were already posed to the California Legislature to no avail. I know this because I proposed the changes and brought those and other issues to the attention of Legislators, Legislature and the Governor. Now, as then, I was ignored. In my possession are documents and correspondence to Assemblypersons and Senators attempting to bring legal flaws inclusive of various statutory loopholes to their attention prior to passing certain provisions and amendments to sections--but went unheeded.
Still, in the hundreds of proposed pages of text generated by the California Law Revision Commission, the bad laws, including loopholes, remain.
Mr. Hebert, I know you are aware of these issues because I have written to you about them before, and you have my book, and you have seen my latest edition of Common Interest Developments--Homeowners Guide, Thomson-West, 2007-2008. What is surprising is that you and your "Commission" continue to bastardize an entire statute that could have been properly executed from the beginning but was not. Instead you and the Commission are doing what the drafters of the initial Davis-Stirling Act did: Sloppy work.
The results of sloppy work equates to bigger problems and higher costs for those purchasers of property and existing owners, than had existed prior to the wholesale rewrite you are conducting right now. It also costs the State of California money.

IV.
CLRC'S CIRCUMVENTION OF PUBLIC COMPLAINTS

In my opinion and the opinion of others, the California Law Revision Commission, whether artful or not, IS circumventing the real issues surrounding public complaints of said laws pertaining to common interest developments.
For all the pages of text you have produced, and all the rhetoric, pomp, and circumstance, save the back-patting, the approximate 300 pages of slop miserably fails to protect titleholder assets.
It fails to provide per se penalties against third-party management companies and their employees, fails to provide per se penalties against recalcitrant boards, fails to per se assist titleholders in protecting their assets, fails to provide a viable avenue of redress for the mounting problems associated with common interest developments, and homeowner associations. Every avenue the titleholder attempts to pursue for "fairness" is a costly dead-end--no thanks to you and your Commission.
The so-called pre-existing, or statutory avenues for "redress" are woefully inadequate and in theory while they may look good on paper, they are all but useless in application AND they are NOT cost effective for the owner.[2] Implementation of many sections of the Davis-Stirling Act (even with your so-called Simplification) does not address the myriad of crossover laws, existing loopholes, and language and directions are frankly, do not work in "real life."

V.
BYPASSING THE LEGISLATIVE PROCESS BY USING "MADE TO ORDER" CHANGES THAT INCLUDE ALTERING SUBSTANTIVE ISSUES RESULTING IN TITLEHOLDER DISENFRANCHISEMENT

If owners knew of the dire implications of the California Law Revision Commission's so-called "substantive issues" terminology, they'd be all over your Commission like a dirty shirt. So too, if owners really understood that the fancy language you propose on paper would have a detrimental (ie, legal) effect once implemented, they'd be all over your Commission like a dirty shirt.
Subtle change? Not! For instance, the California Law Revision Commission has decided to make a SUBTLE change in words. Who would be the wiser? For example, take a look at your Section 4540. The CLRC decides to delete and cross-out just two words. The two words are: "adjourn to."
The CLRC decides to include instead, the words "meet in." Gee, doesn't sound so bad does it? Wrong!
That example of the CLRC's so-called SIMPLIFICATION is DISASTROUS to owners. It removes the "session" requirement and converts the "session" to a type of executive meeting or secret meeting that is not allowed presently under the Davis-Stirling Act. Also in that example, it appears to seriously circumvent the Open Meeting Act in a variety of ways. Because owners cannot presently attend an executive session, this change in the LAW will give boards carte blanche to meet in secret -- how would an owner EVER know that the board is meeting pursuant to LAW because it is now NOT a "session" it is a bona fide --secret-- MEETING -- just what the industry ordered from the Commission. Other problems associated with that so-called SIMPLIFICATION are equally disastrous.
One of the most contentious and complained about topics that readers to my co-authored Los Angeles Times, Associations column in the Real Estate section write about, has to do with that very topic of secret meetings, executive sessions and board meetings that are called "executive board meetings" whatever the heck THAT'S supposed to be! Other complain that advisors to boards keep informing them their association does not fall under the Davis-Stirling Act -- all because they do not want to abide by the law.
Boards have been meeting in secret regardless of the Davis-Stirling Act because they suffer no quantifiable penalties at law for doing so. Interference by third party vendors encouraging such lawbreaking actions is growing at a record pace. But precisely because they are "third party vendors" (eg, management companies) they contract directly with a board of directors and are basically unaccountable to the owners who pay their salaries. They are in a sense able to interfere to their heart's content without fear of prosecution.
Your Section 4540 is just what association industry advisors ordered, give the boards free reign.
The CLRC gives the association industry and the out-of-control-boards just what they want --- a type of "get out of jail card" -- meet in "executive session" without notice, without a duly convened meeting, any time they want and without any accountability whatsoever. And, check out the free-for-all line-up you've given the board, hell, they just hit the lottery big time. There goes accountability and openness right out the window. Why? Because of the California Law Revision's deletion of otherwise seemingly innocuous TWO WORDS.
The California Law Revision Commission's entire preposterous project titled "Statutory Clarification and Simplification of CID Law" project is laden with problems similar to that just described, only worse.


VI.
MORATORIUM ON CHANGES TO DAVIS-STIRLING ACT; NO SO-CALLED BILL OF RIGHTS NEEDED; CREATION OF VICTIM'S FUND FOR DEED-RESTRICTED OWNERS

As I have written before to you, there needs be a moratorium on changes to the Davis-Stirling Act in general.
Until the California Law Revision Commission completely expunges the word "property" from the statutes governing purchase, sale, and ownership of residential deed-restricted properties, the titleholders have a vested interest in their property.
There should be no separate, or independent "bill of rights" in the California Statutes for residential deed-restricted property owners. Instead, the US Constitution should apply and the titleholder's "rights" should be written into said statutes by way of realistic redress and penalties against associations, their third party providers and advisors, and boards of directors. The benefits of said penalties must flow directly to the affected titleholder(s).
There should also be created, a "Victims Fund" for any titleholder who is a victim of the aforementioned who break the laws.
However, to date, and even with the California Law Revision Commission recommendations, the titleholders have no per se "rights" and they have no protections.[3]

VII.
VOLUNTARY WAIVER

The California Law Revision' Commission makes reference to very dangerous combination of words: Voluntary Waiver. This must be removed (let alone clarified and defined) from the statute sections. That is dangerous for titleholders because statutorily the titleholder "voluntarily waives" certain rights on purchase. Yet, this appears to be intentionally misleading in the California Law Revision' Commission's language pertaining to its project titled: Statutory Clarification and Simplification of CID Law.
In effect, this means, that everything that is being proposed is superseded by the purchase of such "property." What layperson would understand the LEGAL implications of giving up THOSE rights by a stroke of a pen on an escrow document that they probably did not read, or if they read, did not fully comprehend?

VIII.
WARNING: "THE STAFF RECOMMENDS AGAINST THAT CHANGE"

John Wayne once said, "Who the hell are you?"
Interestingly, way too many serious and pertinent suggestions from the public are pooh-poohed by the California Law Revision Commission with the one-liner brush off comment "the staff recommends against that change." Most of your reasons for discounting such changes appear to be without justification.
A better idea would be that the California Legislature issue a warning to all residential deed-restricted owners and potential owners of the perils of such ownership that inures to the detriment of the titleholder. Just as "truth in lending" has become an issue, so too must truth in these statutory provisions be an issue in this wholesale rewrite that the public has been handicapped in controlling.
Despite extremely naive and trusting nature of most buyers and owners and despite the availability of SOME media coverage of the legal problems surrounding ownership of these properties, owners do not fully appreciate the seriousness of the situation. The California Law Revision Commission has not helped--they have instead, hurt these consumers.

Thank you for your time.

Very truly yours,
/s/
Donie Vanitzian, J.D., Arbitrator
[1] See e.g., J. Rau & E. Halper, Pain of Proposed State Budget Cuts is Widely Spread, L.A. Times, Jan. 12, 2008.
[2] Donie Vanitzian, Common Interest Developments, (Thomson-West, 2007-2008 ed).
[3] See e.g., Business and Professions Code sections 11018 et seq.