Leisure World Fight Escalates

A small band of activists from Leisure World in Seal Beach has been battling the retirement community’s management for more than a year over access to financial records. And now their fight has landed in Orange County Superior Court.

The group says Leisure World is run like a dictatorship, while management says it is trying to be open and fair. Attorneys for both sides offered their final arguments Friday, and now it’s up to the judge.

The results of the closely watched case could redefine how such retirement communities are governed.

“Leisure World homeowners are not the only ones who are trying to get into their association’s records,” said Marjorie Murray, a lobbyist for California Alliance for Retired Americans in Sacramento, pointing to a handful of similar disputes statewide.

The group of residents say they have a right to know how their dues are spent, but that they were rebuffed -- until they started winning their cases for greater accountability in small claims court.

The residents even refused Leisure World’s offer to settle by providing the financial records, saying there are bigger issues involved.

It was only the latest clash in the community of 9,000 seniors that has been divided over such controversies as dog walking and local-newspaper bias.

The community’s board of directors, who are Leisure World residents, say the dissenters are a small minority and that the board has tried to follow the law in the financial-records cases. Since losing in small claims court, the board says it has tried to satisfy the requests for financial records.

“But they just kept pushing, and pushing,” said Thomas Barratt, president of the board.

Push came to shove and the case ended up in the Santa Ana courtroom of Judge Ronald L. Bauer, who will render a decision within weeks.

The dispute centers on whether Leisure World, which functions almost like a city with elected officers and community budgets, should act more like a government, with open financial dealings and management procedures.

It is an argument that has been repeated in private communities statewide for years.

Private communities, such as condominiums and gated subdivisions, are governed by elected boards of residents. The boards make rules, assess fees and award contracts for services like trash pickup and security.

The state Legislature has passed laws in recent years to make private communities more accountable to their residents, including requirements for open financial books.

In Leisure World, a group of 10 residents decided to put the law to the test. Early last year, they began peppering Golden Rain Foundation, a nonprofit corporation that manages most of Leisure World, with requests for financial records. They wanted to know, among other things, how much Leisure World was paying its administrator and for landscaping most of its 533-acre property.

“The way to keep things honest is to keep things transparent,” said David Lyon, 60, one of the 10 residents who sued in small claims courts after their requests were denied.

The foundation has appealed some cases. It also filed a countersuit to put an end to the small claims court litigation, which was tried in Bauer’s court this week. The foundation said Leisure World is structured differently from most private communities, such as gated subdivisions and condominiums that are ruled by homeowners associations, and that the laws for these associations do not apply.