Licensing means nothing but red tape

I recently observed the news on NBC Channel 5 on Sept. 1, 2009, regarding the recently signed legislation by Governor Quinn pertaining to condominium and homeowner association management managers. The thrust of the legislation is to prevent theft by management companies. The legislation had yet to become effective when NBC News broadcast a situation where a licensed real estate broker, president of a property management company, allegedly embezzled funds from her clients. So much for licensing to prevent criminal acts.

Anyone who thinks having a license will prevent individuals from committing a crime is naive. How many times have you heard of lawyers being disbarred for stealing from their clients? How many times have you heard of doctors defrauding Medicare or Medicaid? Once again, government has adopted a bureaucratic burden on the taxpayers that will not prevent embezzlement. No additional legislation was needed, since there are criminal laws already on the books, which cost taxpayers nothing to enforce. Instead, what licensing will do is increase the costs that the community associations pay because of the time and expense management companies will have to commit in order to comply with the licensing provisions. Those costs will be passed on to the consumer. It is no different from a retailer passing on a tax to the consumer. When will the legislature ever learn?

Also, one must ask themselves what the board members were doing in monitoring their management company. Were they reviewing financial reports, having audits performed and checking their bank balances? Did they demand that a dual signatory system be implemented where the management company did not have sole exclusive signatory power over association bank accounts? Board members of community associations have a fiduciary responsibility to watch the funds. Obviously, those board members may have breached those fiduciary responsibilities. It might be beneficial for the homeowners of those associations to look at their board members to see if they are liable. Hopefully, they have directors and officers liability and fidelity insurance, which could be tapped to reimburse the association for the loss of funds.

Finally, Gov. Quinn had an opportunity to veto this legislation but he failed to live up to his public pronouncements of trying to reduce the costs of state government. Instead he affirmed another state bureaucracy. Another example of a politician not living up to a promise.

Steven R. Heuberger

Libertyville