Homeowner dues must be spelled out

Prospective buyers eyeing homes in California’s 37,000 private communities won new help from Sacramento to get clearer pictures of what they’re getting into financially.

Gov. Arnold Schwarzenegger, responding to complaints by real estate agents, recently signed legislation requiring homeowners associations to spell out for potential buyers the amounts of monthly dues and precise amounts that dues must rise in years ahead to maintain the community.

Although associations already provide financial data, buyers often get financial reports that are hard to decipher, said the bill’s author, Assemblyman John Laird (D-Santa Cruz).

The law, effective Jan. 1, also requires associations to notify residents before steering reserve funds for upgrades and repairs to other uses. Boards can now shift reserves to short-term needs, including attorneys’ fees, with promises to move them back within a year. But boards can also vote to delay the return.

Schwarzenegger also signed legislation expanding the rights of associations and residents to mediate their differences instead of going to court or hiring an arbitrator. The bill, by Assemblyman Tom Harman (R-Huntington Beach), allows residents to appeal decisions made by their association boards, and says the board cannot refuse to meet with a resident over a dispute.

The governor vetoed a bill that would have stopped associations from foreclosing on homeowners over disputed debts under $2,500.