Bill Introduced to Expand Authority of HOA Information and Resource Center

Representative Su Ryden (D-Aurora) has introduced House Bill 16-1217 ("HB 1217").  The bill expands the rulemaking authority of the Director of the Division of Real Estate and requires the HOA Information Officer to create statewide lists of election monitors and mediators and arbitrators who handle HOA issues.  The bill has been assigned to the House State, Veterans & Military Affairs Committee of which Representative Ryden is the Chair.  Here is what the bill provides:

1.      It gives the Director of the Division of Real Estate the rulemaking authority to change how the fees for the HOA Information and Resource Center are charged to HOAs.  The Director can choose: (1) a single per-unit annual registration fee; (2) a tiered per-unit annual registration fee; or (3) a single per-association annual registration fee. 

2.       It requires the HOA Information Officer to develop a statewide referral list for HOA election monitors.  In addition, it requires election monitors to report on a yearly basis:  (1) the number of requests they received to monitor elections for the previous year; (2) the number of elections he or she monitored the previous year; and (3) for each election monitored, the type and size of the HOA involved.

3.      Requires the HOA Information Officer to developer a statewide referral list of independent contractors who provide HOA-related mediation and arbitration services.  Each independent contractor shall report on a yearly basis:  (1) the number of requests they received to mediate or arbitrate an HOA matter received the previous year; (2) the number of HOA-related mediation cases they opened and closed the previous year; (3) the number of HOA-related arbitration cases they opened and closed the previous year; (4) the types of HOA-related cases they mediated or arbitrated during the previous year; and (5) for each case mediated or arbitrated the previous year, the type and size of the HOA involved.  These independent contractors are not permitted to disclose confidential information regarding mediations or arbitrations, unless permitted to do so by statute.

This bill is interesting, since the HOA Information Officer already has the authority to create the statewide lists of election monitors, mediators and arbitrators.  In addition, I am unaware of any financial difficulties of the HOA Information and Resource Center which justify the need for Director of the Division of Real Estate to be given rulemaking authority to change the fee structure for financing the Resource Center.

As always, keep your eye on this blog for information on HB 1217 as it proceeds through the legislative process. 

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Changes in FHA Condo Approvals?

On Tuesday of this week, H.R. 3700 - Housing Opportunity Through Modernization Act of 2015 passed out of the U.S House of Representatives, and yesterday it was received in the U.S. Senate and referred to the Committee on Banking, Housing and Urban Affairs. Why is this significant?

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Bill Introduced to Require Pre-CCIOA Communities to Comply with Budget Ratification Provision of CCIOA

Representative Jovan Melton (D-Arapahoe County) has introduced House Bill 16-1149 (HB 1149) which would require HOAs created before July 1, 1992, to comply with the budget ratification provision in CCIOA.

In a nutshell, the budget ratification provision of CCIOA requires boards of HOAs to provide a summary of the proposed budget (many HOAs provide a copy of the actual budget) they have adopted to the homeowners in their HOA and to notice a budget ratification meeting for consideration of the budget.  (It is not unusual for budget ratification to be held during the annual meeting of an association.)  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.

While I suspect this bill will make it through the House which is controlled by the Democrats, it will be interesting to see how the bill does in the Republican controlled Senate.  Stay tuned for updates on HB 1149 as it moves through the legislative process. 

 

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HOA Whistleblower Protection Bill Introduced

Senator Morgan Carroll (D-Aurora) has just introduced Senate Bill 16-082 ("SB 82") which would protect folks from retaliation when they report an alleged violation of their association's governing documents or enforce their rights under Colorado law or the governing documents of their HOA. 

If there is any retaliation against these individuals by the HOA, the board of directors, manager or any other unit owner - the person retaliated against has the right to bring legal action against those retaliating and the court may issue:  (1) an injunction; or (2) award damages, court costs, attorney fees and any other relief the court deems appropriate.

The main hole in this bill is that the term "retaliation' should be defined to give unit owners, HOAs, boards and managers notice of what it means to "retaliate."  Defining this term would go a long way towards preventing retaliation. 

Folks who report an alleged violation or exercise their legal rights, should never be subject to retaliation!  In my humble opinion, when this happens, SB 82 provides appropriate protections for these individuals.  Frankly, since we hopefully live in a civil society, it's unfortunate that a bill like this is even necessary. 

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Bill on Rain Barrels Introduced

The first bill which would have an impact on single family home planned communities and very small condominium associations has been introduced in the House by Representative Daneya Esgar (D - Pueblo County) and Representative Michael Merrifled (D - El Paso County) and has been assigned to the House Agriculture, Livestock & Natural Resources Committee. 

House Bill 16-1005 ("HB 1005") would permit 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.  Water may be collected using this method from single family homes and multi-family residences with 4 or fewer units that are set up as a "row of residences joined by sidewalls." In other words, this bill would affect single family home planned communities and small row house condominium associations or planned communities.

The bill provides that the water collected from these rain barrels must be used for outside purposes (irrigation of lawns and gardens) and must be used on the residential property where the rain was collected.  HB 1005 does not address the ability of an HOA to have architectural guidelines regulating rain barrels.  In addition, the bill specifically provides that HOAs shall not prohibit the use of these rain barrels - even if the governing documents of the association prohibit them.

Stay tuned for more information on the implications of HB 1005 for HOAs and updates on the bill as it begins moving through the legislative process.   

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Hold Onto To Your Hats - Another Colorado Legislative Session Begins!

The 2016 Colorado legislative session is kicking off today!  While the morning will be highlighted by speeches and the requisite amount of pomp, it shouldn't take long for legislators to get down to the nitty gritty of election year politics.

The Colorado House is controlled by the Democrats and the Colorado Senate is controlled by the Republicans.  With slim margins in both chambers, it may be difficult to get much done.  This is particularly true since legislators may be focusing on their re-election campaigns and introducing legislation that will resonate with their constituents - but may not be viable bills for passage.  However, time will tell whether initiatives will be introduced which motivate members of both chambers to reach across the aisle to seek compromise.

On the HOA front, we expect the issue of construction defects to be front and center again this year.  However, if the Metro Mayors Caucus, Denver Chamber of Commerce and builders hope to get anything passed - I suspect they will need to pivot and work on a compromise bill that doesn't destroy homeowner rights to hold builders responsible for their defective construction.  The Construction Defect Action Reform Act (CDARA) is not perfect and should be fixed.  However, this cannot be accomplished until this coalition is willing to seek a constructive and meaningful compromise.  Check out this article from the Denver Post on the legislative climate in 2016 for construction defects.   

Since the licensure of community association managers has gone live and some small HOAs are not happy about it, we may see a bill which attempts to drill down on which managers must be licensed.  We may also see a bill which attempts to prohibit the transfer fees which management companies are permitted to charge for the services they perform related to the conveyance of a home in an HOA.  if bills on either of these issues are introduced, I suspect they will be on a very bumpy road to passage and will not make it through the legislative process.  However, this is just my early prediction and we will have to see what happens. 

As always, stay tuned to this blog for important information on HOA bills as they are introduced and work their way through the legislative process.  Happy election year, everyone!   

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Happy New Year! Now get back to work...

It's the first Monday of 2016, and while some of us might still be shaking off the eggnog, time passes and deadlines arrive.  Remember to comply with your annual disclosure and registration obligations before your deadlines arrive, and take some time for education while you're at it!

Annual Disclosures. Within 90 days of the conclusion of the fiscal year, an HOA must notify its members, at no cost, of certain information. It may do this by posting the information on its website with mailed notice to members, maintaining a notebook at its principal place of business, or by mail or personal delivery. The required information includes the following:

  • The date on which the fiscal year commences;
  • The HOA's operating budget for the current fiscal year;
  • A list, by unit type, of the HOA's current assessments (both regular and special);
  • The annual financial statements, including any amounts held in reserve for the fiscal year immediately preceding the current annual disclosure;
  • The results of the HOA's most recent financial audit or review;
  • A list of all association insurance policies, including company names, policy limits, policy deductibles, additional named insureds, and expiration dates;
  • The HOA's bylaws, articles of incorporation and rules and regulations;
  • The minutes for board and member meetings for the fiscal year immediately preceding the current annual disclosure;
  • The HOA's Responsible Governance Policies, often referred to as "SB 100 Policies."

Division of Real Estate Registration. An HOA's registration is good for one year. Check your registration and re-register, or contact us to register for you. Registration is required if the HOA is going to undertake enforcement activity.

Secretary of State Reports. While you are re-registering with the Division of Real Estate, verify that your HOA has filed its annual report and is in good standing with the Secretary of State. This is another filing required for the HOA to have the power to assert its legal rights.

Board Education. If your HOA held its annual meeting in the fourth quarter, you likely have one or more new board members. Educate new board members, and remind veteran members, of their obligations under the Revised Nonprofit Corporation Act and CCIOA. Proper education can prevent unintentional bad acts, and the expenses related to education can be accounted for as a common expense.

Happy New Year from everyone at Winzenburg, Leff, Purvis & Payne!

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Happy Holidays!

From everyone here at WLPP, we wish you all a safe and happy holidays! 

 

 

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2016 Assessments

Has your association increased, or even decreased, its annual assessment fees for 2016? If so, it is important that the association follow its governing documents when providing notice of the change to all owners.   In addition to providing owners with proper notice of any change, the association should also notify its attorney. This will help to ensure that any accounts and/or payment plans that are with the attorney for collection are properly noted, and any increase is accurately accounted for and collected.  

 

In addition to payment plans that may be affected by the increase of assessment fees, there are also notification requirements and deadlines the association must comply with for certain owners who have filed for bankruptcy.  Advising the association’s attorney of any change will allow the attorney to take the proper measures to ensure that the association retains the right to collect the new assessment fee.

 

If you haven’t already notified your attorney that your assessment fees have changed for the New Year, pick up the phone or send an email to your attorney – I’m sure he or she would love to hear from you!

 

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The Importance of Process

We often get questions about how important it is that a particular notice goes out as required by the Bylaws or the Declaration or a particular policy. Typically, a manager or a board member will call and explain that they've been sending out notices a certain way for a number of years (nobody can really remember why, or for how long because the practice pre-dates current management and all of the current board members), but a homeowner just contacted the manager or the board member and said that the notice didn't comply with the governing documents. How important is that?

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