Colorado Homeowners Association Law Blog

Governor Ritter signed HB 1270 into law on Thursday, April 24, 2008.  This new legislation amends C.R.S. 38-30-168, which has prohibited certain restrictions on solar energy devices since the late 1970s, and adds a new section to the Colorado Common Interest Ownership Act.  The new statutory provisions permit homeowners to install alternative energy generation devices, such as solar panels and wind generators, and other select, energy-saving improvements, despite any express prohibition of these items in the recorded covenants, conditions, and restrictions applicable to an owner’s home.  The statute will control in the event of a conflict between the terms of the recorded covenants and the legislation.  Homeowners associations and condominium associations may regulate these alternative energy devices only to the extent that the statutes allow. 

The young man living at 101 Crazy Daisy Avenue hasn’t mowed his lawn in over a month. The couple just down the street has two beagles that embark on a nightly duet with the moon. Another couple has been camping in their motor home for over a month…in their front yard. And don’t forget the bank owned ranch sitting vacant on the corner. The rest of the community is up in arms and demands action. What is a conscientious Board to do?

The levying of fines against rule-breakers in the community is an effective tactic used by homeowner associations to curb misbehavior and to maintain a harmonious appearance within the community. In order to enforce and collect these fines, however, it is imperative that associations follow proper fining procedures as set out in the Colorado Common Interest Ownership Act (CCIOA), as well as any additional requirements that may be set forth in the Association's governing documents or policies.

When the documents say how tall it is. And when it does not say how tall one story is, there is a very good chance that language in the governing document limiting a structure to one story will be unenforceable as a restrictive covenant.

In a recent Colorado Court of Appeals decision, Allen v Reed, 155 P.3rd 443 (Colo. App. 2006) the appellate court reversed the trial court’s granting a permanent injunction ordering the defendants to remove their A-frame addition to their home, which contained a bedroom loft suite. The lawsuit did not involve the Association, but was an action between two homeowners regarding an interpretation of the Association’s restrictions limiting structures to one story.   It was unclear whether the Association Board had the authority to enforce and there was no existing architectural control committee to enforce the restriction.

QUESTION:   Our Association received a check marked “Paid in Full”.  But the check was for less than the full amount owed by that owner. What should we do with the check?

ANSWER:   The act of cashing the check generally constitutes acceptance of the owner’s terms.  It is not enough to simply cross out the “Paid in Full”.  It is not enough to add a reservation of rights, such as “the acceptance of this payment is under protest”.

Before depositing the check, you have two basic options: (1) Return the check and ask for one that is not marked “Paid in Full”; or (2) Send it for deposit, knowing that it may be treated by a court as “Paid in Full”

Nevertheless, if you accidentally cash a check that purports to be “Paid in Full”, do not despair. You may prevent a full satisfaction of the account if, within 90 days of payment of the check, the Association tenders repayment of the amount of the check. However, this will only work if the Association did not have previous knowledge that the check was being submitted in full satisfaction of their account.    

Legal Tip:         If your Association uses a lockbox, checks are typically deposited automatically. Colorado law allows Association’s to challenge checks deposited in this manner if it gives owners certain information in advance. At least annually, the Association should send  a “conspicuous statement” to its owners stating that “communications concerning disputed debts, including an instrument tendered as full satisfaction of a debt, are to be sent to” a designated person, office or place.  

For better or worse, community associations are in the news once again.   As you may have heard, a homeowner in Wheat Ridge, Colorado has been flying her U.S. flag upside down to protest the country's role in the war in Iraq. Recently the Association in which the owner lives has demanded that she fly the flag properly or not at all. The Association contends that her flying of the flag “union down” violates Association's patriotic and political expression policy. The owner has responded that this policy violates her 1^st Amendment right of free speech. Below are a few questions that we have received in response to this controversy: 

1. Can an association adopt rules and regulations pertaining to the display of the American flag?

Answer: Yes. In Colorado a community association may adopt reasonable rules regarding the placement and manner of display of the American flag. However, Colorado law states that an association may not prohibit the display of the American flag as long as it is displayed in a manner consistent with the federal flag code.

2. Does the federal flag code allow flying of the flag “union down”?

Answer: Yes, in limited circumstances. The “U.S. Flag Code” states that the flag should never be displayed with the union down, except as a signal of dire distress in instances of extreme danger to life or property (for those interested in researching this, see 4 U.S.C. § 8). The homeowner described above states that she is flying the flag upside down because the war in Iraq has put the country in a very distressful situation. It is unclear as to whether this novel argument would succeed in Court.   

3. Is a restriction on the display of the American flag a violation of the 1^st Amendment or state constitutional rights of free speech?

Answer: The answer to this question is currently unclear. It has been generally held that the 1^st Amendment does not apply to speech and assembly on private property or within a private organization. In other words, a private community generally has the right, through its covenants, to restrict the speech within its borders. This is basically a contract that an owner agrees to when it purchases property in a covenant controlled community. However, a recent case in New Jersey has questioned this notion, holding that the proliferation of common interest communities have made them “constitutional actors” that must respect their members’ fundamental constitutional rights. This case is currently under review by New Jersey Supreme Court. The Colorado Supreme Court has not yet addressed this issue.

A question we are frequently asked by associations is how strictly they should enforce their covenants. This was exactly the dilemma faced by a small patio home community located in North West Denver. Apparently a homeowner had painted her house golden yellow. The color was not unattractive – it actually looked quite nice – but it was clearly not one of the earth tone colors approved by the association. After some investigation by the Association’s Board of Directors, it became apparent that this was an honest mistake by the homeowner. She was new to the community and was unaware that she was restricted in her color choices. Although she was also willing to work with the Association to correct things, money was an issue. She had recently experienced some serious personal problems and could not afford to repaint her house. This is when I received a call from the Board’s president asking “What should we do?”

Below is a trial story from Larry Leff, senior partner here at WLPP:

Not Your Ordinary Collection Case

In the not too distant past our firm took on a collection case for one of our associations that took an interesting twist. We filed a lawsuit in our county court, jurisdiction under $15,000.00, against a homeowner for the non-payment of assessments. The debtor homeowner filed a counterclaim against the Association, asserting claims that the association breached its contract with him – failing to maintain the property – and   that it breached its fiduciary duty to him, among other claims. He also requested exemplary damages. During the course of litigation, the homeowner brought his account current, minus the attorney fees and costs. At trial, the Association was granted an award for its attorney fees and costs, and the court dismissed all the homeowner’s counterclaims.

The homeowner refused to satisfy the judgment, so garnishment proceedings were initiated.   The garnishment was successful and the Association collected the full amount.

Do you or your manager ever receive calls from your members about a domestic violence problem between other residents in your community? How about speeding in the public streets? What about the wild party with all the noise and disturbance at 2:00 a.m.? WHAT ARE YOU GOING TO DO ABOUT IT?! Well, you’re the Association, after all; ENFORCE THE !@##$@@ COVENANTS!! TAKE CARE OF THE PROBLEM!!

This past Sunday's edition of the Denver Post featured an article on the delay homeowners associations are experiencing with the removal of holiday lights and decorations by owners.  The article states that due to the unusually harsh winter, associations are relaxing their normal enforcement of restrictive covenants that require decorations to be removed within 30 days of a holiday.  Mark Payne is quoted as saying that given the circumstances it is OK for an association to grant a reprieve in taking down holiday lights.  To view this article in its entirety, click here.

Well, here we are, Ash Wednesday; past Martin Luther King’s birthday, President’s Day, and Mardi Gras, and some homeowners still have their Christmas and Hannukah decorations on their homes from those holiday celebrations. As we all know, many restrictive covenants specify a period of time following the specific holiday during which the decorations must be removed from the house. And yet, our weather has been such that, in many cases removing those decorations may not be done safely due to the onslaught of snow storms and the accumulation of snow, all of which seems to have been exacerbated by the regular weekend snow storms. Should the board nevertheless enforce those restrictive covenants and impose fines, or is there an alternative?

The Jefferson County District Court ruled last week that a condominium association can prohibit smoking in their four-unit building.   The Heritage Hills #1 Condominium Owners Association amended its bylaws to ban smoking after an owner complained about smoke seeping into her unit.  The District Court upheld the bylaw change stating that second hand smoke "constitutes a nuisance" similar to "extremely loud noise."  Click here to read an article on this ruling recently published in the Denver Post. 

Once again the holiday season is upon us, and that means that many homeowners associations will be hosting parties and putting up lights and other decorations on the common areas. While there is nothing wrong with fully celebrating the holiday season, associations should take care to ensure that decorations and holiday displays do not give the impression that the community favors one particular religion over another. This could subject the association to discrimination claims under the Fair Housing Act (FHA)and other federal and state fair housing laws.

As you are probably aware, fair housing laws protect residents against discrimination in housing. For homeowners associations, these laws are most often encountered in the context of disabled residents and requests for “reasonable accommodations”.  Nevertheless, it is probably not a surprise that the FHA and other fair housing laws also prohibit discrimination on the basis of religion. You might ask how does this apply to exhibiting holiday decorations?

We frequently get questions from our clients and their managers asking about enforcement of architectural guidelines, and particularly, the ability to either require a homeowner to obtain architectural review committee approval before making improvements, or alternatively, requiring a homeowner to remove improvements already made without committee approval. While there is no universal answer, there are some generalities.

The weather is warm, your Association's pool is prepped for summer, and Memorial Day is just around the corner. Everything is fine until the owners currently contesting their Association debt (the same owners whose case is currently set for trial in one month) call to request the pool key. Their son's birthday falls over the weekend and the whole family will be in town to celebrate at the pool. Your Association documents say the key can be withheld if the account of the owner is not in good standing. Do you give them the key?

Most covenant-controlled communities have at least one owner that does not play by the rules. The mere mention of covenants may conjure an image of that purple house, untended lawn, or RV owner in your own neighborhood—that house that becomes a sort of sideshow within the community due to the on-going battle between the association and the owner. On the rare occasion, failure to abide by the covenants results in a dream deferred.

I previously made an entry on this site which contained stories about a homeowners association in Florida that prohibited the housing of hurricane Katrina victims within the community. The Community Assocition Institute (CAI) has since taken a strong position with regard to communities that are disallowing homeowners from opening their homes to evacuees of hurricane Katrina in this article.

The number of methamphetamine laboratories found in Colorado communities continues to grow. The availability of low cost ingredients and a simple recipe for the drug has allowed unsophisticated drug "cookers" to open up shop in hotel rooms, vehicles and, more importantly, condominiums, townhouses and single family homes. Due to the flammable nature of the ingredients, meth labs often explode and cause tremendous fires. For those communities unlucky enough to have a meth lab, the fact that it did not explode into a fireball seems like little consolation. Often by the time law enforcement has enough evidence to raid the unit, the damage has been done.

Association Boards often contact our office to determine how to deal with a regularly-occurring problem that just doesn't seem to require or deserve the response that has customarily been given. Understandably, the Board desires to treat each owner fairly and believes that to do so, it must treat each owner similarly. However, the value of a Board of Directors is that it is composed of people who each bring their life experiences and judgment to the position. A Board need not—and in fact—should not treat each owner in an identical manner when the circumstances do not justify such treatment. Instead, the Board should exercise its collective business judgment in a good faith and reasonable manner to treat similar circumstances similarly. This is much different than treating each owner in the same manner.