Short-Term Rentals (“STRs”), which can encompass everything from nightly rentals to thirty day rentals to six month rentals, have become a hot button issue in common interest communities since the inception of websites such as airbnb, VRBO and HomeAway. The market for STRs in Colorado increased exponentially with the legalization of recreational marijuana. The dramatic increase in STRs has compelled many common interest communities to consider ways to restrict, or at least regulate, leasing in their communities.
When a common interest community wants to restrict leasing to eliminate or control STRs, the first question is whether this can be done by the Board through the adoption of a rule or policy, or whether it requires an amendment to the covenants upon approval of the required percentage of the owners. The prevailing view is that leasing restrictions may only be imposed by an amendment to the recorded covenants, and not by the adoption of a rule.
The Colorado Common Interest Ownership Act, C.R.S. § 38-33.3-101 et seq. (“CCIOA”) contains several provisions regarding the use of property within common interest communities. C.R.S. § 38-33.3-205(1)(l) requires that restrictions on the use, occupancy, and alienation of units be contained in the recorded declaration. C.R.S. § 38-33.3-217(4.5) requires that no amendment may change the uses to which any unit is restricted in the absence of a vote or agreement of at least sixty-seven percent (67%) of owners, or any larger percentage specified in the declaration. Similarly, the Restatement of the Law on Property/Servitudes provides that, absent specific authorization in the covenants, an HOA does not have the power to adopt rules that restrict the use or occupancy of individually owned units.Continue Reading Posted In Covenant Enforcement
As you know Community Association Managers are required to complete 8 hours of continuing education courses prior to applying for renewal of their license. Alternatively, managers may successfully complete the Colorado law portion of the CAM examination. The attorneys at Winzenburg, Leff, Purvis, & Payne are ready to help managers get the education they need for their continuing education requirements, and will be holding free lunchtime teleconference classes over the next several months. We are in the process of applying for credit for these classes from the Division of Real Estate. In addition, we will be seeking CAMICB credit for our classes, to help managers maintain their credentials.Continue Reading Posted In Off the Top
LIGHTS ... CAMERA ... LEGAL ACTION! Do Associations Increase Their Liability by Providing Security Measures?**
Many owners in common interest communities might assume that when their association takes steps to increase security – such as installing street lights, security gates, surveillance cameras, etc. – they are providing additional protection to the owners who live in the community. However, the opposite may be true. If a community’s governing documents do not require the association to provide security, the association may be undertaking responsibility where it has none. While security measures are a good idea in principle, community associations must be careful not to unintentionally increase their liability for third party criminal acts.Continue Reading Posted In Governance , Governance
At a time when our two major political parties can seem to agree on nothing, in an astounding turn of events, both the House and the Senate approved legislation that has been signed by President Obama, that, in part, revises how the Federal Housing Administration is required to evaluate condominium projects for FHA insurance.Continue Reading Posted In From Capitol Hill/Legislation
For those of you who know me, you know that I'm a political junkie. But even for me, this political season has seemed like it has already lasted for an eternity and I don't remember politics ever being quite this nasty. With the Republican and Democratic political conventions almost behind us, I can guarantee that the race for POTUS and all of the down ticket races will pick up steam and folks living in HOAs will want to place political signs for their favorite candidates and ballot issues in their yards and windows of their homes.
In anticipation of "political sign season," here is what residents, boards and managers need to know about placing political signs in HOAs in Colorado:Continue Reading Posted In Covenant Enforcement
You Think Your Association Dues Are High?
According to the Denver Post, former Denver Broncos head coach Mike Shanahan is selling his home in Cherry Hills Village for $22 million. While the home is definitely stunning, the monthly assessments are listed at $8,814.00 a month - which adds up to more than $105,000.00 a year! It’s not clear what exactly the assessment covers, but the mansion does have a racquetball court, a golf simulator, a bowling alley and a pool. I don’t know about you, but I would love to see the annual budget for this Association.
As previously blogged by Molly Foley-Healy, in Colorado, Boards of Homeowner Associations are required to provide a summary of the proposed budget they have adopted to the homeowners in their Association and to notice a budget ratification meeting for consideration of the budget. If at the meeting a majority of all owners (or a larger percentage as specified in the declaration) do not vote to veto the budget, the budget is automatically deemed approved - regardless of whether quorum is present at the meeting.
So next time you think your assessments are too high or want to complain about an increase in your assessments, just think – you could be paying what many people pay to purchase a home in a years’ worth of assessments!Posted In Money Matters
Pool Rules: A Fair Housing Concern
The heat hitting Denver this weekend has reminded several clients to ask us to review their pool rules. Community associations are "housing providers" under the Federal Fair Housing Amendments Act, and thus our pool rules need to comply with Fair Housing requirements.
Fair Housing prohibits housing discrimination based on the following factors:
- National Origin
- Familial Status
A rule that might seem reasonable and appropriate to a community, such as requiring all children to wear swim diapers, can result in a Fair Housing complaint. If you're revising your rules, look to objective guidelines for your restrictions. Health and safety requirements apply to everyone, regardless of whether they are a member of a protected class. It is possible to create rules that accomplish your goals without running afoul of the law. Talk to your attorneys to ensure that your concerns are appropriate, and that your restrictions are expressed in a manner that protects your community from a Fair Housing complaint.
In the meantime - stay cool out there!Posted In Your Governing Documents
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?Continue Reading Posted In Governance
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!
Posted In Off the Top
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.Continue Reading Posted In Governance