Dear Chairman Honan, Chairman Boncore and Esteemed Members of the Joint Committee on Housing,
The Condominium Act Chapter 183A that governs the operations of condominium associations in Massachusetts has seen only minor updates since its enactment over half a century ago in 1963. There are general concerns that these outdated laws do not adequately address the needs of the rapidly growing number of condominium associations in the state, now exceeding 12,000, making Massachusetts 6th in the nation, after Florida, California, Texas, Illinois and North Carolina.
The existing Massachusetts statutes, as with many other states do not restrict self-dealing by condominium board members or prevent election fraud or other forms of misconduct. Furthermore, there are no mechanisms in the existing statutes to force condominium associations to make their official records available to unit owners.
Massachusetts condominium owners are entitled to the best laws that enhance financial accountability and transparency and reduce financial fraud and embezzlement of condominium association funds.
Massachusetts must adopt laws that protect condominium owners and provide regulatory transparency to facilitate informed choices by prospective condominium buyers.
Bills H.664, H.687, H.689, H.699, H.700, and H.2239 if enacted will reduce condominium election fraud, enhance transparency in condominium governance and shall further facilitate informed choices for prospective buyers.
Association-governed housing is a predominantly unregulated $90 billion cash cow industry, ripe for financial fraud and abuse by the industry that provides services to condominium and homeowners’ associations (“Service Industry”), such as property management companies, association lawyers, association debt collectors, construction companies, and landscapers.
The Service Industry championed by the Community Association Institute (CAI), is a political powerhouse, which has played a major role in preventing the much-needed reform and modernization of Massachusetts condominium laws and the enactment of laws that can otherwise protect unit-owners against financial fraud and abuse.
CAI’s power comes from intense efforts of a small minority of 40,000 or less CAI members nationwide. They mobilize a small number of their members to make contributions to candidates, to win their support. In contrast, millions of unit owners who fuel the engines of association-governed housing markets via their financial investments, monthly fees and assessments have little or no support.
We are not organized. Therefore, we are not politically influential.
CAI lobbyists want lawmakers to ignore the risks of lax laws over Massachusetts condominium owners.
We look to our lawmakers to be faithful to the interests of condominium owners and to act with integrity. Complete and accurate disclosure and financial reporting to condominium owners and prospective condominium buyers and mortgage lenders are important parts of this duty.
This is as much a moral as it is a legal imperative.
As other states are adopting new laws that hold condominium scammers accountable, we demand that we don't sit on the sidelines. We want to see our state be a leader in reforming condominium laws, a leader in protecting condominium owners and prospective buyers against financial fraud and abuse and a leader in restoring consumer confidence in the Massachusetts condominium market!