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Paying for Affordable Housing by Making Housing Unaffordable?

May 20, 2015

The goal of California Assembly Bill 1335, authored by Speaker Toni Atkins, is to create affordable rental and owner-occupied housing. We all support affordable housing; in fact, common interest developments provide affordable housing to seniors and to buyers entering the real estate market. But AB 1335 would pay for housing with a $75.00 surcharge on all recorded documents. The surcharge would burden homeowners struggling to pay their association assessments, that is, people with financial problems who, themselves, need affordable housing.

Associations record a number of documents when collecting past-due assessments; they either add the recording fees to the amount to be paid by the owner, or pay them with assessments collected from the other owners. Associations rely on their assessments for money to maintain and repair condominium buildings. Without a steady stream of money, condominium projects deteriorate, and no longer provide decent, moderately priced housing. They cannot choose to forgo collecting the funds they need to survive.

To recover unpaid assessments, associations must record liens and notices, and when the owner is able to pay enough to settle the debt, they must record releases of all of those liens and notices. It isn’t fair to impose hundreds of dollars in additional fees on homeowners who fall behind in their assessments. Nor is it fair to impose those fees on all of the other owners in the project.

Written with the best of intentions, AB 1335 has the unintended consequence of targeting homeowners working hard to afford their homes.

John R. MacDowell is managing shareholder of Fiore, Racobs & Powers’ Orange County office and is a delegate to CLAC from the Orange County Regional Chapter of CAI. He serves as CLAC’s Chair-Elect.

John R. MacDowell Fiore Racobs & Powers

John R. MacDowell, Esq.



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