Declaration Amendment Petitions - Shall Means Shall!

Today, the Colorado Court of Appeals issued an opinion addressing the statutory declaration amendment process set forth in C.R.S. 38-33.3-217(7).  This process allows community associations that have sought to amend their declaration, and received fewer approvals than required to amend the declaration outright, to obtain a court order that approves the amendment notwithstanding the vote result. 

The statutory process is pretty black-and-white; if the Association complies with the statute's requirements and fewer than 33% of those entitled to vote file written objections, the court "shall" approve the amendment.  "Shall" is mandatory, but some courts have declined to approve petitions notwithstanding this language.

In Centennial Ranch and Aspen Mountain Ranch Association v. Fuller et al., 14CA1326, the Court of Appeals held that when a court determines that a community association has met the requirements of Section 217(7), it errs if it denies the petition to amend.  The Court of Appeals further determined that another community association case analyzing the substantive impact of an amendment did not expand the statutory criteria for the court's analysis of a petition to amend. 

We have always considered the process in Section 217(7) be fairly straightforward, and are pleased to have a Court of Appeals decision that supports our analysis.  It's more important today than ever to make sure your amendment process complies with the Section 217(7) requirements, and to make sure that you comply before you end up with insufficient voter turnout. 

Posted In What the Courts Say
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Fair Housing News - Again

We've written many times before that community associations are bound by the provisions of the Fair Housing Act. There is a lot of information available about the Fair Housing Act, who it applies to, what it takes to comply, and what the consequences are for failure to comply. Notwithstanding all of the available information, some communities and managers (and apparently their legal counsel) still don't "get it."

HUD recently announced a decision in connection with a complaint involving familial status. In the case, the association had rule in effect since 1998 known as the "children rule" which prohibited children from playing in the common areas. In July 2011, the association amended the rules to prohibit riding bicycles, tricycles, scooters, skateboards, skates and rollerblades; playing; picnicking; and sunbathing in the common areas.

Continue Reading Posted In What the Courts Say
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CCIOA v Collection Policy

By now, we all know that prior to an association turning a delinquent account over for collections, certain procedures under CCIOA must be followed. One of those procedures is sending of a notice of delinquency to a delinquent owner that includes the following information: (1) the amount due with an accounting of how the total was determined, (2) a statement as to whether the opportunity to enter into a payment plan exists and instructions for contacting the community association manager and/or board member to enter into such a payment plan, (3) the name and contact information for the individual the unit owner may contact to request a copy of the unit owner’s ledger in order to verify the amount of the delinquency and (4) a statement that action is required to cure the delinquency and that failure to do so within thirty days may result in the unit owner’s delinquent account being turned over to a collection agency, a lawsuit being filed against the owner, the filing and foreclosure of a lien against the unit owner’s property or other remedies available under Colorado law.

Continue Reading Posted In Money Matters
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HOA Board Meeting Basics: Exceptions to Open Meetings Limited

In my first installment of this blog series entitled HOA Board Meeting Basics, I discussed whether the Colorado Common Interest Ownership Act ("CCIOA") or the Colorado Revised Nonprofit Corporation Act ("Nonprofit Act") require that members of an HOA be provided with notices of board meetings and agendas.  In this installment of the series, I will discuss open board meetings in HOAs.

For most folks living in Colorado, our home is the biggest investment we will ever make in our lives.  For those of us with a home in an HOA, we know that in addition to our normal obligations as homeowners, we must pay assessments for our share of the common expenses of the community and comply with the governing documents of our association. 

Our HOAs are governed by boards of directors which have a great deal of authority over our how our communities are maintained, the fiscal health of our communities, how the governing documents are enforced and the overall culture of our communities. Since boards of directors have a great deal of power, it only makes sense that CCIOA requires that Board meetings be open to the members of the HOA or their designated representatives.  Having open meetings provides members with an opportunity to see their boards in action and to observe the due diligence they engage in before making important decisions. 

Continue Reading Posted In Governance
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HOA Board Meeting Basics: Notice to Members and Agendas

Just last week, I had the privilege of teaching a class for the Aspen Pitkin County Housing Authority on HOA meetings.  Since my friends in Aspen and Pitkin County had numerous and excellent questions relating to meetings, I thought it would be helpful to post a series of blog entries on HOA board and membership meetings.  In order to avoid confusion, I will start this series of blog entries by addressing issues relating to HOA board meetings.

For those of you who follow our blog, you know that the Colorado Common Interest Ownership Act ("CCIOA") is the primary body of statutory law in Colorado that regulates HOAs.  Since most HOAs are nonprofit corporations, when we are dealing with issues relating to governance, we must also look to the Colorado Revised Nonprofit Corporation Act ("Nonprofit Act") for guidance. 

The first question I will address is whether HOA boards must provide notice of their board meetings to the members of their associations.  Interestingly, CCIOA and the Nonprofit Act do not require that members of an HOA be provided with notice of board meetings.  However, it is important to check out the bylaws for your association to determine whether the bylaws require that notice of board meetings be given to the members.  If your bylaws require that notice be given to members, make sure to carefully follow the notice requirements outlined in your bylaws. 

Continue Reading Posted In Governance
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New ADA Guidance on Service Animals for Condominium Hotels

As attorneys who specialize in the practice of community association law, we often hear folks talk about service animals and the Americans with Disabilities Act ("ADA").  What most folks don't understand is the ADA doesn't apply to private residential HOAs.  Instead, the ADA requirements relating to service animals apply to HOAs that provide a place of public accommodation - like condominium hotels.  These requirements will also apply to those HOAs which share amenities like swimming pools and open them up to the public.  

It's important to note that associations which permit owners to privately rent their units would not be classified as a condominium hotel which would trigger application of the ADA.  Instead, in order for the ADA provisions relating to service animals to apply, the HOA would need to have a room reservation system for renting out rooms or provide hotel-type services to short-term renters. If you are unsure whether the ADA applies to your HOA, please contact your legal counsel for guidance.

For private residential HOAs that are not required to comply with the ADA, the Fair Housing Act applies and regulates assistance animals in these communities in a more permissive way.  Here's a link to more information on Fair Housing Act requirements relating to assistance animals.   

So back to the ADA.  The United States Department of Justice has just issued an updated Frequently Asked Questions about service animals and the ADA.  In particular, the FAQ addresses issues relating to service animals being permitted into facilities in HOAs.  For those condominium hotels in the mountains and across Colorado which must comply with these requirements, we think you will find the FAQ both easy to read and understandable. 

 

 

Posted In From Capitol Hill/Legislation
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America's Birthday and Flags

On the cusp of America's birthday, I get to thinking about our national flag - what it represents, and the emotions it evokes in people throughout the world. We all have our own ideas about these things, and how important it is to demonstrate our allegiance. Some people, while as patriotic as anybody else, prefer to not make outward demonstrations, while others feel strongly about flying the flag. All of which gets me to the role of homeowners associations, and their role in all of this.

Continue Reading Posted In Off the Top
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Food for Thought: Unlicensed Practice of Law Opinion

While community association managers in Colorado have been working through the state mandated licensure process, the ‘hot button’ topic of discussion in Florida has been the Florida Supreme Court’s May 14, 2015 Advisory Opinion regarding the unlicensed practice of law by non-lawyer community association managers. While the decision is not binding in Colorado, it is likely to spark debate and conversation among community association managers for years to come. Did the Florida Supreme Court go too far? Will a similar decision issue in Colorado in the future? 

Continue Reading Posted In What the Courts Say
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Are You Carrying Enough Loss Assessment Coverage?

I was recently told a story about a condominium association that is carrying property insurance coverage on their condominium units which includes a $50,000 per unit deductible on water related losses!  Evidently, this association has also adopted a policy which passes along the responsibility for the deductible to the owners of the units which were damaged.  In addition, if a unit owner is found responsible for causing a water related loss, I was told the at-fault owner is responsible for paying the $50,000 deductible for all of the units damaged by the water event.

Let's say you live in this association and negligently caused a water related loss which damaged your unit and three others.  That would mean you could be held responsible to pay $200,000 in insurance deductibles.  Needless to say, most people are not prepared to write a check for $200,000! 

Once I thought through this scenario and picked my jaw up off my desk, my initial thought was this association has basically decided not to cover water related losses.  However, much more importantly, I thought about how absolutely essential it is for homeowners in this community to carry sufficient insurance coverage on their standard unit owners policy (commonly referred to as the "HO-6 policy") to cover payment of these deductibles. 

While the story I recounted is certainly unusual, every owner of a condominium unit should find out what deductibles their association is carrying on their property and liability insurance coverage and to what extent the owners are responsible for paying those deductibles. Once you have that information, you should contact your insurance agent and ask the following questions about your HO-6 policy:

Continue Reading Posted In Money Matters
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You Can't Enforce That!!!

Oh yes we can.

It is not unusual for us to encounter communities with strict restrictive covenants that have not been enforced in a strict manner.  Much of the time, this is due to apathy or ignorance.  In other circumstances, Board turnover results in more or less enforcement.  Some Boards hate to enforce against their neighbors, and offer so many variances the covenants might as well not even exist.  Some Boards will interpret documents in a manner different than other, future Boards, but when the documents remain the same, we have to figure out what to do to follow those documents in light of the community's history.

A recent case in California provides a bit of guidance for those of us facing the historical enforcement challenge.  In The Villas in Whispering Palms v. Tempkin, No. D065232 (Cal. Ct. App. May 18, 2015) the California Court of Appeals held that an association board that had historically offered numerous variances to a one-dog rule was not required to offer variances.  The homeowner claimed the Board was unreasonable because it had provided variances and allowed multiple dogs in the past.  The Court ruled that the Association's prior variances did not impact its ability to deny the requested variance.

Continue Reading Posted In Covenant Enforcement
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