Reprinting courtesy of TimeSharing Today-Written by Jeff Weir, chief correspondent RedWeek,com and a contributor to TimeSharing Today
State senator blocks industry bill that would have
restricted owner access to HOA rosters
A powerful California lawmaker, who also happens to be a timeshare owner,
singlehandedly blocked an industry-backed timeshare bill that would have restricted
owners' ability to access HOA rosters in order to communicate with each other
about board business and elections.
Sponsored by the American Resort Development Association
(ARDA) as a means of protecting owner confidentiality, the bill passed through
the California Assembly on a 79-0 vote. But it stalled in the State Senate,
languishing for months in the Senate Judiciary Committee, which is chaired by
Sen. Hannah-Beth Jackson, a Santa Barbara Democrat and former prosecutor who
was elected in 2012.
Jackson's committee has considerable sway over all bills that
have significant legal impacts. In fact, it's a graveyard for any bills that
don't pass her muster. According to legislative staffers, Jackson's legal and
timeshare experience gave her a unique perspective on the potential
ramifications of Assembly Bill 634, which juxtaposed owner privacy rights
against owners' ability to use owner rosters for legitimate member-to-member
communications about board policies or HOA issues.
The original bill, authored by Assembly Majority Leader Ian
Calderon, D-Whittier, set forth procedures for HOA boards to enable
owner-to-owner communications. Those procedures, moreover, were designed to
prevent membership rosters from falling into the hands of third-party scammer
companies who might use the lists to harass owners with timeshare
sales-or-transfer solicitations.
According to a Senate committee analysis of the bill, AB 634
also would have repealed key portions of a 2010 California appellate court
ruling that upheld owners' rights to access membership rosters for legitimate
board business. In that case, Worldmark by Wyndham repeatedly refused to grant
an owner's request to access the list to share a petition challenging the
board's domination by current or former Wyndham executives. At one point,
Worldmark offered to mail a copy of Robin Miller's petition to
Worldmark's 260,000 members if Miller agreed to pay $260,000 in mailing costs.
Miller asked the board to provide email lists, to reduce the costs, but Worldmark
declined, citing privacy issues.The case went to trial in 2009. Miller's access
rights were upheld. Worldmark appealed.
In its ruling upholding Miller's right to access the list,
without having to bear a prohibitive financial burden, the appellate court
said: "A danger exists in allowing too free an access to membership lists;
however, the potential for abuse must be balanced against a member's legitimate
needs and rights to utilize lists in election contests and for purposes
reasonably related to a member's interest.”
The Calderon bill, drafted by ARDA, attempted to balance the
two competing owner rights cited by the appellate court -- preserving privacy
while enabling communication. But Jackson's team did not like the details.
The Senate Judiciary Committee analysis of AB 634 said:
"While this bill would help protect the privacy of timeshare plan members
and could potentially shield them from unwanted marketing, it would also remove
the ability for members to identify and communicate with each other except in
very narrow circumstances."
"As drafted, the analysis continued, "this bill
arguably favors the interests of the management of a timeshare plan and of a
timeshare association too heavily. With this bill, management or an association
may be able to effectively prevent the delivery of messages it does not agree
with by denying owners -- who likely will never meet each other --- the
resources they need to contact each other."
Fast forward to late June, when the bill is finally subjected
to a public hearing in Jackson's committee. Calderon testifies that the bill
will protect owners from being preyed upon by predatory transfer companies, but
does not offer one concrete example where an HOA roster was either sold or
given to a third party company for commercial purposes. (ARDA did not provide a
single example of this purported abuse, either.)
Jackson, without discussion, declares that the bill will be
amended, with the author's consent, and recommends a "do-pass-as-amended"
vote by her committee. The amendments are not discussed or distributed. The
bill is approved unanimously and sent to the Senate floor for further
consideration. One month later, the amendments surface. They strengthen the ban
on distributing HOA rosters to third parties, but strip out all prohibitions on
sharing lists with owners.
What happens next? Calderon, the author, doesn't like the
amended bill because it still authorizes sharing ownership roster-information
with other owners. ARDA, the sponsor, abandons the bill.
"The amendments were prepared by the committee at the
direction of the chair (Jackson)," said Peter Roth, ARDA's vice president
of marketing and communications and industry relations. "We did not agree
to the changes as the goal for us remains the protection of the owner's
personal information.”
Under current California law (and the amended AB 634), Roth
added "this provides the opportunity for anyone who acquires one interest
to then sell the list or use it to attempt to scam or simply solicit owners.”
Facing the Legislature's imminent adjournment on Aug. 31,
Calderon gutted AB 634 of all timeshare language on Aug. 18 and, overnight,
turned it into a measure dealing with digital assets in probate.
Both sides, meanwhile, said they would consider reviewing the
timeshare issue as new language emerges to solve the dual claims of owner
privacy and disclosure. For sure, the issue is not going away, because
California is a national bellwether for consumer protection AND privacy issues.
One silver lining for ARDA as AB 634 succumbed to Jackson's
amendments. Three similar prior bills, starting in 2012, died in various
committees. AB 634 lasted longer than any of its predecessors.
One last word: Sen. Jackson's office declined to answer any
questions about her timeshare experiences.
