PA LAC To Oppose SB 1302

Apr 1, 2014

 

Legislation would alter procedures on collection of assessments, quorums & notice of meetings

Senate Bill 1302 was introduced on March 26, 2014 by State Senator Folmer and referred to the Senate Urban Affairs and Housing Committee. CAI will oppose this legislation.

As written, the Bill would drastically alter the Uniform Planned Community Act’s existing requirements for meeting quorums, create legislative inconsistencies regarding the adoption of budgets and imposition of fines, and create unnecessary pitfalls to hinder an associations ability to collect assessments. The legislation proposes unworkable solutions to non-existent problems. The Act authorizes an association board to levy fees (assessments) through an annual budget process. Section 5303 (b) of the Act requires that notice of the  adoption of the annual budget or approval of a capital expenditure be delivered to each Unit Owner promptly after such approval; and furthermore provides that the Owners may vote to reject same. Section 5302(a)(11) of the Act requires that fines and penalties be preceded by notice and an opportunity to be heard. To require that assessments, fines and penalty amounts be approved by the membership at an annual meeting is thus unnecessary, and inconsistent with existing consumer protection provisions of the Act. Furthermore, such a change would seriously impact an association’s ability to maintain the revenue necessary to cover the expenses of managing the community.

In addition to the above changes, Senator Folmer's Bill would require two notices of meetings of the association membership. The Act already requires that written notice of meetings be delivered to each unit owner.  Requiring a second notice is financially burdensome on associations.  Unit owners who ignore a first notice are no more likely to read a second notice.  Associations often have difficulty achieving quorums at their annual or special meetings.  Increasing the quorum requirement will not function to increase participation.  Instead, the repeated inability to obtain a quorum will hinder associations from properly conducting business.

Finally, Senator Folmer's legislation would impose restrictions on an associations ability to collect assessments. The collection of assessments is generally governed by the Fair Debt Collection Practices Act, which imposes severe penalties for even minor or unintentional violations.  The addition of further limitations upon an association's ability to collect assessments is thus unnecessary.  

For these reasons, CAI will oppose adoption of this bill and may call upon members to contact your legislators regarding this legislation. Watch your email from CAI for more information on this legislation as it becomes available.


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