Rigging an Election? This is Serious

 What is it about community associations that sometimes bring out the worst in people? Is it that we’re dealing with people’s homes? Do we not like somebody else telling us what we can and can’t do? Is there a sense of power from being on the board of directors? The ability to control other people?

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Congratulations to our Winners!

Congratulations to Molly Ryan of Metro Property Management, Inc. and Jared Theis of Community Management Specialists, Inc.!  You are the winners of our mint julep baskets.  We will be in contact with you shortly so you can claim your prizes.  Thanks to everyone who stopped by to see us at the CAI-RMC Spring Showcase.  We had a great time!

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The Business Judgment Rule

Board members often ask us, “What is the standard of conduct for the board of a common interest community?”  The standard of conduct is known as the Business Judgment Rule.  According to this rule of law, actions taken by directors of a nonprofit corporation in good faith, that are within the powers of the corporation, and that reflect a reasonable and honest exercise of judgment, are valid actions in accordance with the Business Judgment Rule.  Not only does the Business Judgment Rule provide a standard by which directors can measure their conduct, it also provides a legal defense to many claims against the association.

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Come Visit Us at the Spring Showcase!

It's time for the Rocky Mountain Chapter of CAI's Spring Showcase!  In honor of the Kentucky Derby, the theme this year is Race to Success.  Winzenburg, Leff, Purvis & Payne will be exhibiting and we hope you will stop by booth 515 to say hello and to enter a drawing for two Mint Julep Baskets.  Come and hang out with us, we won't make you muck out the stall!

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HOA Transfer Fees: Access to Information Available Now

HOA transfer fees are getting some attention in the news again this week. In particular, news coverage has focused on demands that HOA property management companies provide invoices for the transfer fees charged to buyers or sellers of properties within HOAs. There is good news for buyers and sellers in HOAs: access to transfer fee information is already available.

What exactly are transfer fees? Colorado statutes address transfer fees in the three following ways that are relevant to HOAs and their members:

  1. The Colorado Revised Nonprofit Corporation Act expressly authorizes nonprofit corporations to impose transfer fees upon their members unless the articles of incorporation provide otherwise. Most HOAs are formed as nonprofit corporations and have this right to impose transfer fees.
  2. The real property statutes prohibit certain transfer fee covenants, such as those intended to benefit a person or entity who does not hold an interest in the property burdened by the covenant. But transfer fee covenants for fees payable to homeowner associations are not prohibited and are recognized by statute as valid fees.
  3. Community association management companies typically contract with the HOAs they manage to charge transfer fees to the buyers or sellers of properties within those communities. The community association manager statutes and licensing rules impose explicit requirements on managers concerning these transfer fees. Those statutes and rules are the good news for buyers and sellers, and all owners, who want to know what transfer fees apply in their HOAs.

So what rights do owners, buyers, and sellers have to access transfer fee information?

Continue Reading Posted In Community Association News , From Capitol Hill/Legislation
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Duties of the Managing Agents and Liability for Failure to Carry Out Those Duties

A managing agent's duties to the association can arise out of the common law relationship of an agent to a principal, or by virtue of the contractual relationship between the managing agent and the association, or both. In the same manner that the board has a fiduciary duty to the association and its members, the managing agent, as the agent, has a fiduciary duty to the association as the principal in all matters connected with the agency relationship.

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Interesting Information on Licenses and Renewals for Colorado Community Association Managers

Along with Matt Green from CAI National and Eric Turner from the Colorado Division of Real Estate, yesterday I participated in CAI's Legislative Update Lunch & Learn in Fort Collins.  While Matt did an outstanding job, I suspect the information which Eric Turner shared relating to manager licensure was particularly interesting to the managers in attendance.  Here are highlights of the information which Eric shared on licensure:

Number of Licensees:  As of the end of January, there are 1,093 folks licensed in Colorado.  This is pretty close to the 1,200 licensees which CAI's Colorado Legislative Action Committee had estimated for the Division of Real Estate.  Of those managers, 578 are either individual community association managers or work under a designated manager, 449 are designated managers and 66 currently hold an apprentice license.  There are also 439 management companies which are currently licensed in Colorado.

License Renewal for 2016:  As a reminder, community association managers (including designated managers) must renew their licenses by July 1, 2016.  The Division of Real Estate is recognizing the pre-licensure education these managers took as sufficient to cover the continuing education requirement for their first license renewal.  In other words, to renew their licenses in 2016, managers will not need to take continuing education classes.  Managers can begin renewing their licenses in May.  If a designated manager fails to renew his or her license, the licenses of managers who work under them will become inactive.  The cost to renew a license will be $190. 

Continuing Education for 2017 License Renewals:  For managers to renew their licenses in 2017, and every subsequent year after that, they will need to prove they have taken 8 hours of continuing education approved by the Colorado Division of Real Estate.  However, for the 2017 renewal period, the Division will only count those approved classes taken from July 1, 2016 through July 1, 2017.  As a result, any continuing education classes which managers take prior to July 1st will not count toward the hours needed for their 2017 license renewal. 

Management Company Renewals:  Unlike community association managers and designated managers who are required to renew their licenses on a yearly basis, management companies are not required to renew.  However, management companies will be required to provide updated information on their companies to the Division of Real Estate on a yearly basis.

Tomorrow I will provide you with interesting tidbits which Eric Turner shared on complaints made against managers to the Division of Real Estate. 

Posted In From Capitol Hill/Legislation
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Emotional Assistance Animal Bill Killed on Party Line Vote

House Bill 16-1201 ("HB 1201"), which was introduced by Representative Yeulin Willett (R-Grand Junction) to address a gaping loophole used by folks to keep a dog in HOAs which ban them, was killed by the Democrats in the House Health, Insurance & Environment Committee last week on a 7 to 6 party line vote.

HB 1201 would have regulated how licensed professionals in Colorado must approach providing recommendations for emotional support animals (also commonly referred to as "emotional assistance animals" and "companion animals") under the Colorado Fair Housing Act.  In particular, this bill would have required that licensed physicians, physician assistants, nurses, psychologists, social workers, marriage and family therapists, licensed professional counselors and addiction counselors must make the following findings prior to recommending that an individual should be permitted to have an emotional support animal:

1.  The licensed professional must make a finding that the individual requesting the emotional assistance animal has a disability as defined by Colorado law or that there is insufficient information available to make a determination that the individual has a disability; and

2.  The licensed professional must actually meet with the individual requesting an emotional support animal, prior to making a finding of whether the person has a disability which necessitates the emotional support animal.

The bill also defined a companion or emotional support animal as "an animal that provides therapeutic benefit to an individual with a mental or psychiatric disability." 

House Bill 16-1308 ("HB 1308") was just introduced  to address the issue of service animals (which are limited to trained dogs and miniature horses) under the Americans with Disabilities Act ("ADA").  While the issue of service animals under the ADA rarely applies to HOAs in Colorado (with the exception of some condominium hotels), HB 1308 would make it a misdemeanor for an individual to fraudulently misrepresent their animal as being a service animal, or a service animal in training, for the purpose of bringing that animal into a place of public accommodation. 

Stay tuned for updates on HB 1308 as it proceeds through the legislative process. 

 

 

 

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HOA Whilstleblower Protection Bill Killed in Senate Committee

Yesterday, Senate Bill 16-082 ("SB 82") was killed in the Senate Business, Labor & Technology Committee ("Business Committee") by the Republicans on a party line vote. As you will recall from an earlier blog posting, Senator Morgan Carroll introduced SB 82 to protect folks living in HOAs from retaliation when they report an alleged violation of their association's governing documents or seek to enforce their rights under Colorado law. 

CAI's Colorado Legislative Action Committee ("CLAC") worked with Senator Carroll to draft an amendment to SB 82 to define "retaliation" in such a manner as to ensure that folks living in HOAs could not use an alleged "retaliation" as a loop hole for not paying their assessments or complying with the use restrictions in their governing documents.  This amendment was not adopted by the Business Committee and yesterday the bill was killed on a 5 to 4 vote.

As always, stay tuned to this blog for updates on HOA legislation as these bills proceed through the legislative process. 

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Amended Rain Barrel Bill Clears the House

House Bill 16-1005 ("HB 1005") has just cleared the Colorado House of Representatives in an amended version on a vote of 61 to 3 and is heading to the Senate for consideration. 

As originally introduced, HB 1005 permits rain water to be collected from residential rooftops by the use of no more than two rain barrels with a combined storage capacity of 110 gallons or less.  The bill provides that water may be collected in this manner from single family homes and multi-family residences with 4 or fewer units - like townhomes and condominiums.  The water collected from these rain barrels must be used for outside purposes, like irrigation of laws and gardens, and must be used on the residential property where the rain was collected.

The bill as originally drafted, did not recognize the unique issues that arise in the context of condominiums and HOAs.  As a result, the HB 1005 was amended to provide as follows:

1.  Individuals living in HOAs, do not have the right to place a rain barrel on property that is:  (a) leased, except with permission of the lessor; (b) a common element or limited common element in an HOA; (c) is maintained by the HOA; or (d) is attached to one or more other units, except with the permission of the owners of the other units. 

2.  HOAs are also permitted to place reasonable aesthetic requirements on rain barrels that govern their placement and external appearance.

It will be interesting to see what happens to HB 1005 in the Senate, since last year this identical bill was killed in the Senate.  As always, stay tuned to this blog for updates on HB 1005 and other bills impacting HOAs.

Posted In From Capitol Hill/Legislation
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