Information for Managers on Obtaining the CMCA Credential

On behalf of the Aspen Pitkin County Housing Authority (APCHA), I was privileged on Tuesday to present my annual legislative update on HOA issues.  During the course of my presentation, we talked at length about the requirement that community association managers must by licensed by the Colorado Division of Real Estate by July 1, 2015. 

In order to take an important first step toward licensure, I recommended that community association managers think about obtaining the Certified Manager of Community Associations ("CMCA") credential offered by the Community Association Managers International Certification Board ("CAMICB) - formally known as NBC-CAM.  Here is a link to the CAMICB website that tells you everything you need to know about obtaining the CMCA credential. 

I have also communicated with CAMICB about offering CAI's M-100 course and the CMCA examination in the Aspen area.  Stay tuned to this blog for more information on when and where this class will be offered.  You can also check the Rocky Mountain Chapter of CAI's website for updated information as it becomes available. 

Thanks to all of my mountain friends who attended this annual event.  The amazing turnout and your continued quest to stay updated on the latest laws impacting HOAs is truly humbling and exciting! 

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Legislative Update in Aspen - September 10th!

Please join me for a free Legislative Update on HOA legislation which was signed into law during the 2014 legislative session in Colorado.  I will also provide on update on the latest information you need to know about the licensure of community association managers and what we might expect during the 2015 legislative session.  This Legislative Update, hosted by the Aspen Pitkin County Housing Authority, will be held on September 10th from 11:30 am to 1:00 pm in the City Council Chambers located at 130 South Galena Street in Aspen.  

Mark your calendars now and stay tuned for information on how to register for this event!

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Colorado Division of Real Estate Publishes Manager Licensure FAQs

The Colorado Division of Real Estate has just published FAQs to address questions relating to manager licensure.  The FAQs provide excellent information pertaining to who needs to be licensed, the timeline for the licensure process, steps managers must take to apply for licensure, the credential and testing requirements relating to licensure and other important information. 

When reviewing the FAQs, it is important to remember that the rulemaking process has not yet been completed and the proposed rules referenced in the FAQs are just that - proposed rules and not yet final.  In fact, since the effective date of the manager licensure law is not until January 1, 2015, the Division is not permitted to engage in formal rulemaking until the first of the year.  While the guidance in the FAQs is primarily based upon the law mandating manager licensure, the timeline established by the Division and associated procedures - when you see references to proposed rules, please understand that the information relating to the proposed rules may change when the rules are finalized.

Keep your eye out on this blog for the latest news after the first of the year on the formal rulemaking process and whether legislation is ultimately introduced to clean-up provisions of the manager licensure law. 

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Colorado Division of Real Estate Publishes Manager Licensure FAQs

The Colorado Division of Real Estate has just published FAQs to address questions relating to manager licensure.  The FAQs provide excellent information pertaining to who needs to be licensed, the timeline for the licensure process, steps managers must take to apply for licensure, the credential and testing requirements relating to licensure and other important information. 

When reviewing the FAQs, it is important to remember that the rulemaking process has not yet been completed and the proposed rules referenced in the FAQs are just that - proposed rules and not yet final.  In fact, since the effective date of the manager licensure law is not until January 1, 2015, the Division is not permitted to engage in formal rulemaking until the first of the year.  While the guidance in the FAQs is primarily based upon the law mandating manager licensure, the timeline established by the Division and associated procedures - when you see references to proposed rules, please understand that the information relating to the proposed rules may changed when the rules are finalized.

Keep your eye out on this blog for latest news after the first of the year on the formal rulemaking process and whether legislation is ultimately introduced to clean-up provisions of the manager licensure law. 

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Construction Defect Bill Dead for Session

Senate Bill 14-220 (“SB 220”) is dead for the session. Sponsored by Senator Jesse Ulibarri (D-Commerce City), who represents himself as an advocate for affordable housing, this bill was a molotov cocktail created to destroy the ability of homeowners living in HOAs to recover from builders for defective construction. The plan was to significantly increase the construction of condominium projects by making it impossible for builders to be held fully responsible for their shoddy construction. 

SB 220 was double assigned to the Senate State, Veterans & Military Affairs Committee (‘State Affairs Committee”) and the Senate Judiciary Committee. The State Affairs Committee, which is chaired by Senator Ulibarri, held a short hearing on the bill yesterday which did not give all of the folks who were passionately against the bill a chance to be fully heard. The bill passed the State Affairs Committee on a slim 3 to 2 margin.

 

In order for the bill to proceed through the legislative process during the final two days of the session, the Senate Judiciary Committee needed to take up the bill last night and pass it out of committee to the full Senate for consideration. In a procedural move to protect the rights of homeowners living in HOAs to recover for defects against builders, the Senate Judiciary Committee declined to meet last night on SB 220 which kills the bill for the session.

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Bill Introduced to Strip Homeowners of Ability to Recover for Construction Defects

With one week remaining in the 2014 legislative session, Senate Bill 14 – 220 (“SB 220”) was introduced yesterday evening in the Colorado Senate. While it may seem to some that this bill was introduced too late in the session to have any chance of passage, with relaxed rules in place for the end of the session, a bill can technically make it through the entire legislative process in three days. This bill has been assigned to the Senate State, Veterans & Military Affairs Committee and the Senate Judiciary Committee. 

Sponsored by Senator Jesse Ulibarri (D-Commerce City) and Senator Mark Scheffel (R-Parker), the bill seeks to spur the construction of condominiums in Colorado. Unfortunately, the bill is so extreme that it would guarantee that owners of homes in HOAs would have no recourse against builders for defective construction. 

 

As introduced, here’s what the bill provides:

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Management Company Transparency Bill Signed Into Law

On April 18th, Governor Hickenlooper signed HB 1254 into law. The bill addresses the disclosure of fees charged to HOAs in Colorado by management companies. HB 1254 will go into effect on January 1, 2015. Here’s what you need to know about the bill: 

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Proposed Manager Licensure Rules Published for Public Comment

The Colorado Division of Real Estate has developed proposed rules for the licensure of community association managers. Those rules have just been published for public comment. That means that every citizen in Colorado has an opportunity to review the proposed rules and provide comment to the Division of Real Estate on them. 

The Manager Licensure Task Force ("Task Force") of CAI’s Colorado Legislative Action Committee (“CLAC”), has prepared a communication that will be sent today to all members of CAI in Colorado. That communication will provide this link to the proposed rules and encourages members of CAI to provide their comments to the Division of Real Estate and the Task Force. The Task Force will be submitting comment on behalf of CAI to the Division and would like input from CAI members prior to submitting their comment.

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Management Company Transparency Bill Headed to Governor Hickenlooper's Desk!

On a vote of 53 to 11 (with one representative excused), the Colorado House of Representatives just voted to approve the Senate amendments to House Bill 14-1254 (“HB 1254”). The next stop for HB 1254 is Governor Hickenlooper’s desk where we fully expect he will sign the bill into law. Once that happens, HB 1254 will become effective on January 1, 2015.

HB 1254 is the rewritten transfer fee bill that:

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HOA Records Bill Signed Into Law

During a bill signing ceremony today, Governor Hickenlooper signed House Bill 14-1125 (“HB 1125”) into law. HB 1125 will go into effect on August 6th and fixes an inadvertent oversight in the HOA records law which has made it impossible for HOAs to include in membership directories the telephone numbers and email addresses of owners and residents. 

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Management Company Transparency Bill Easily Clears the Senate!

This morning, House Bill 14-1254 (“HB 1254”) was passed by the Senate on 3rd reading on a 32 to 3 vote. The bill, which was amended in the Senate to require that fees and charges be included in a management contract to be enforceable, is now headed to the House for concurrence with the Senate amendment. We don’t expect there to be any problems in the House with concurrence and the bill should be headed to Governor Hickenlooper to be signed into law sometime around mid-April. 

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Management Company Disclosure Bill Clears Senate Local Government Committee!

House Bill 14-1254 (“HB 1254”), sponsored by Senator David Balmer (R-Centennial) in the Senate, was taken up this afternoon by the Senate Local Government Committee. With a slight amendment, the bill was passed with a favorable recommendation to the full Senate on a 6 to 1 vote. Senator Vicki Marble (R-Fort Collins) was the only Senator to vote against the bill in Committee.

HB 1254 requires managers and management companies to disclose during negotiations on management contracts, and thereafter on a yearly basis, the fees and charges imposed as part of their management of associations and any other remuneration received as a result of the relationship which managers and management companies have with their associations. In other words, managers and management companies would be required to disclose any funds they receive from third parties that are in any way related to the associations they manage. Managers and management companies who fail to make these disclosures would be subject to investigation and discipline by the Division of Real Estate. 

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HOA Records Bill Headed to Governor Hickenlooper!

House Bill 14-1125 (“HB 1125”), which was sponsored by Senator David Balmer (R-Centennial) in the Senate, has just passed the Senate unanimously and without amendment on the consent calendar. In a legislative session marked by partisan politics, the fact that HB 1125 unanimously passed both the House and Senate is quite an accomplishment! HB 1125 will be formalized and then sent to Governor Hickenlooper for consideration. We expect the Governor will sign the bill into law. 

If signed into law, HB 1125 will go into effect on August 6, 2014. HB 1125 permits an association to publish email addresses and telephone numbers of members and residents of the association, if those members or residents first provide written consent to their association to publish this informationOwners and residents may withdraw this written consent, but such withdrawal of consent does not require their association to go back and “change, retrieve or destroy” previously published telephone numbers or email addresses. Also, the bill permits owners and residents to electronically provide or withdraw their consent to their associations.

 

CAI’s Colorado Legislative Action Committee (“CLAC”) supported HB 1125 and we are thrilled that the ability of HOAs to publish email addresses and telephone numbers in membership directories will be restored. 

 

Molly Foley-Healy is Chair of CAI’s Colorado Legislative Action Committee

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Two HOA-Related Bills Dead For the Session

Two bills that would have negatively impacted HOAs in Colorado are dead for the session. Here is what you need to know:

House Bill 1165

 

House Bill 14-1165 (“HB 1165”) was taken up last week by the House Business, Labor, Economic & Workforce Development Committee and was defeated by a vote of 1 Representative in favor of the bill to 9 against. 

 

HB 1165 would have capped the retainage permitted in construction contracts to 5% and rendered unenforceable provisions in these contracts with higher a retainage. This bill would have impacted construction contracts for all HOAs with more than 4 units. In other words, almost every HOA in Colorado could have been affected by this bill.

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Rewritten Transfer Fee Bill Sails Through the House!

House Bill 14-1254 (“HB 1254”) has just cleared the Colorado House of Representatives and will soon be introduced in the Senate. HB 1254 was heard last Thursday in the House Business, Labor, Economic & Workforce Development Committee. After extensive testimony on the bill by CAI members and illuminating questioning led by Representative Chris Holbert (R-Douglas County), the bill was unanimously reported out of the House Business Committee with no amendments and with a favorable recommendation to the full House of Representatives. The House passed the bill on 2nd reading yesterday.  The full House passed HB 1254 on 3rd reading this morning with no amendments and a vote of 58 to 8 in favor of the bill, with 3 Representatives excused from the morning session and not voting. 

The original draft of the bill, that was not introduced, would have capped transfer fees charged by management companies at $50.00. Obviously, management companies have every right to be compensated for the services they perform that are related to the sale of a home in an HOA and the costs attributed to the sale of an individual home should not be charged to all of the homeowners in an HOA. Instead, these are closing costs related to the sale of a particular home. Had the original draft version of this bill been introduced and passed, it would have led to an increase in assessments for all HOAs in Colorado since management companies would have been forced to increase their management fees to recover the costs of work performed on the sale of individual homes. 

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Transfer Fee Disclosure Bill Unanimously Passes to Committee of the Whole

After extensive testimony in the House Business, Labor, Economic, and Workforce Development Committee this afternoon, the HOA transfer fee bill (HB14-1254) passed out of committee, with no amendments, for consideration by the House of Representatives. The HOA transfer feel bill is sponsored by Rep. Labuda (D-Denver) and Senator Balmer (R-Centennial) and received bipartisan support by a unanimous vote of the committee.

The HOA transfer fee bill requires management companies to affirmatively disclose their fees to the associations they manage, including those fees charged when a unit transfers ownership. The bill also requires management companies to disclose remuneration they receive from third parties as a result of their relationships with the associations they manage.

Several Community Associations Institute (CAI) members attended today's committee hearing to testify in favor of the transfer fee disclosure bill. Those CAI members primarily represented management companies and offered legislators a full picture of the services that management companies provide in exchange for the transfer fees they charge. 

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HOA Records Bill Clears Colorado House of Representatives

House Bill 14-1125 (“HB 1125”), introduced in the House of Representatives by Representative Diane Mitsch Bush (D-Steamboat Springs), has cleared the House with no amendments and was introduced just yesterday in the Senate and assigned to the Senate Local Government Committee. Senator David Balmer (R-Centennial) is the Senate sponsor of the bill. 

As you will recall, HB 1125 permits an association to publish email addresses and telephone numbers of members and residents of the association, if those members or residents first provide written consent to their association to publish this informationOwners and residents may withdraw this written consent, but such withdrawal of consent does not require their association to go back and “change, retrieve or destroy” previously published telephone numbers or email addresses. Also, the bill permits owners and residents to electronically provide or withdraw their consent to their associations.

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HB 1125 Unanimously Clears House Business Committee

This afternoon, House Bill 1125 (“HB 1125”) was taken up by the House Business, Labor, Economic & Workforce Development Committee (“House Business Committee”) for consideration. As you will recall, HB 1125 is intended to fix an inadvertent oversight in the association records law which was overhauled during the 2012 legislative session and went into effect on January 1, 2013. Currently, the Colorado Common Interest Ownership Act (“CCIOA”) prohibits associations from publishing the telephone numbers and email addresses of members. Obviously, this limits the information associations may publish in membership directories. 

HB 1125 permits an association to publish email addresses and telephone numbers of members and residents of the association, if those members or residents first provide written consent to their association to publish this informationOwners and residents may withdraw this written consent, but such withdrawal of consent does not require their association to go back and “change, retrieve or destroy” previously published telephone numbers or email addresses. Also, the bill permits owners and residents to electronically provide or withdraw their consent to their associations.

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Proposed Transfer Fee Bill Rewritten to Require Transparency

While folks were understandably concerned about an onerous transfer fee bill proposed by Representative Jeanne Labuda (D-Denver), and some even publicly announced that introduction and passage of the bill was a foregone conclusion, CAI’s Colorado Legislative Action Committee (“CLAC”) is pleased to announce that Representative Labuda has completely rewritten her proposed transfer fee bill to instead require managers and management companies to disclose the fees they charge and funds they receive related to their relationship with the HOAs they manage.

HB 14-1254 (“HB 1254”) was introduced today in the Colorado House of Representatives with Representative Labuda as the House Sponsor. Senator David Balmer (R-Centennial), who has been a champion of fair and balanced HOA legislation which also provides important consumer protections, has signed on as the Senate sponsor of the bill. 

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Bill Introduced to Address Lien Rights for a Small Subset of HOAs in Colorado

Senator Owen Hill (R-El Paso) has just introduced Senate Bill 14-140 (“SB 140”) which would impact the lien rights of those HOAs which fall within the Colorado Common Interest Ownership Act (“CCIOA”) exception for small new cooperatives and small and limited expense planned communities. In order to be permitted to record liens for past due assessments, to foreclose upon those liens and to collect related fees and charges permitted under the declarations for these associations, this bill would require these HOAs to amend their declarations to adopt all provisions of CCIOA.

CAI’s Colorado Legislative Action Committee is reviewing this bill and will be talking with Senator Hill to obtain a better understanding of his rationale for introducing SB 140. Stay tuned for more updates on SB 140 as they become available. 

 

Molly Foley-Healy is Chair of CAI’s Colorado Legislative Action Committee. 

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Bill Introduced to Cap Retainage on Construction Contracts

House Bill 14-1165 (“HB 1165”) was introduced yesterday in the Colorado House of Representatives by Representative Randy Fischer (D-Larimer County). The bill would cap the retainage permitted in construction contracts to 5% and would render unenforceable provisions in these contracts with higher a retainage. This bill would impact construction contracts for all HOAs with more than 4 units. In other words, almost every HOA in Colorado could be impacted by this bill.

A retainage in a construction contract is the money held back from payment to the contractor until the construction project reaches substantial completion and the work is accepted by the HOA. In order to ensure the work is completed in an acceptable manner, a 10% retainage is pretty standard in construction contracts. An acceptable retainage is also motivational to contractors to complete their work in a reasonable timeframe. 

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Marijuana Matters: Has your association taken a shot at regulating pot?

As you’re probably aware, effective January 1, 2014, recreational pot became legal in Colorado. This new law is already affecting homeowners associations. While some associations started planning for pot smoking residents last year when the law was passed, not every community association moved quickly to adopt rules and regulations or amend restrictive covenants to address anticipated issues related to recreational pot smoking. If your association has not yet considered whether the new marijuana laws will affect your community, or if you’re thinking about how to tackle problems before they occur, here are some things to consider:

Shared spaces. Most associations have the authority to create rules and regulations that control activities in outdoor and indoor common area spaces. If your association already regulates tobacco smoking in these areas, the association, through board of director action, may consider extending those smoking policies to marijuana use. Associations should also evaluate the extent to which local laws interact with association rules and regulations and seek to fill any regulatory gaps that warrant attention in specific communities. Boards will want to pay particular attention to areas of their communities where use of marijuana will impact other residents. For example, with tobacco smoke, smoking near doorways and windows of other units are areas that typically result in complaints from residents.

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Residential Storage Condominium Unit Bill Introduced

Yesterday, House Bill 14-1143 (“HB 1143”) was introduced to address how storage condominium units are taxed. According to the legislation, residential real property is taxed at 7.96% while commercial property is tax at 29%. As a result, the bill makes it possible to classify storage condominium units which are utilized for residential purposes as “residential improvements” clearing the way for those units to be taxed at the lower rate.

CAI’s Colorado Legislative Action Committee (“CLAC”) has reviewed the bill and does not currently see any unintended consequences for common interest communities. As a result, it is likely that CLAC will vote to monitor the bill and not take an active position to support or oppose.

 

Keep your eye out for updates on this bill as it proceeds through the legislative process.  

 

Molly Foley-Healy is Chair of CAI’s Colorado Legislative Action Committee.   

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Bill Introduced to Fix Oversight in CCIOA Records Provision

House Bill 14-1125 (“HB 1125”) was introduced today by Representative Diane Mitsch Bush (D-Steamboat Springs) to fix an inadvertent oversight in the association records law which was overhauled during the 2012 legislative session and went into effect on January 1, 2013. Currently, the Colorado Common Interest Ownership Act (“CCIOA”) prohibits associations from publishing the telephone numbers and email addresses of members. Obviously, this limits the information associations may publish in membership directories. 

HB 1125 permits an association to publish email addresses and telephone numbers of members and residents of the association, if those members or residents first provide written consent to their association to publish this information. Owners and residents may withdraw this written consent, but such withdrawal of consent does not require their association to go back and “change, retrieve or destroy” previously published telephone numbers or email addresses.

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Colorado Division of Real Estate Publishes HB 1134 Report

As required by House Bill 1134, which passed during the 2013 legislative session and was signed into law by Governor Hickenlooper, the Colorado Division of Real Estate has just published the study mandated by the bill entitled "2013 Study of Comparable HOA Information and Resource Centers." 

As reported in CLAC's update on the 2014 legislative session, no legislation during 2014 is currently anticipated from this Study. 

 

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Ready, Get Set, Go!

The 2014 legislative session kicked off today in Colorado as the Sixty-Ninth General Assembly convened this morning and is scheduled to adjourn on May 7th. Since this is an election year, there is no question that many bills will be introduced from both sides of the aisle to position legislators for re-election. However, for our purposes, these postings will focus solely upon HOA related bills during the session.

As Chair of CAI’s Colorado Legislative Action Committee (“CLAC”), my postings with important updates will be available for review on the following websites: CAI National, the Southern Colorado Chapter of CAI, the Rocky Mountain Chapter of CAI and on Colorado HOA Law. If the postings don’t show up simultaneously on these websites, please be patient since many folks will be involved in posting updates on their respective websites. Also, feel free to repost these updates or pass them along to folks who may find them of interest.

 

There has been a whole lot of speculation on what we can anticipate during the 2014 legislative session. However, CLAC is going to stick to the facts as we know them and based upon the information we currently have, here is what you need to know:

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Time Is Running Out!

As Stephane Dupont previously blogged, effective January 1, 2014, Associations are required to have a new collection policy in place that complies with the HOA Debt Collection Bill (HB 1276).  The new law requires collection policies to set forth certain procedures an Association must follow when collecting on a delinquent account.

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HOA Information Office Disseminates Information on Pests Capable of Killing Ash Trees

The HOA Information and Resource Center commonly shares information on federal and state laws regulating HOAs in Colorado.  However, the Office just disseminated important information to registered HOAs relating to the recent discovery of the emerald ash borer insect in Colorado.  Since ash trees are extremely common in Colorado, HOAs are encouraged to read this communication from the Colorado Department of Agriculture and to be on the look out for these insects which have the capability of devastating ash trees.  Also, be sure to check out this additional resource for information on dealing with these pests. 

A big thanks goes out to the HOA Information and Resource Center for getting out this important information! 

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Senator Morgan Carroll Elected As Senate President

Following the recall of Senator John Morse, Senate Democrats just elected Senator Morgan Carroll as the President of the Senate.  For those of you who are political junkies, you know that Senator Carroll has been a pivotal player over the years on legislation pertaining to HOAs. 

Just this past year, Senator Carroll sponsored in the Senate the HOA debt collection bill (HB 1276), the manager licensure bill (HB 1277) and the bill addressing xeriscaping in HOAs (SB 183).  During negotiations on these bills, Senator Carroll was committed to reaching balanced and reasonable solutions that protected the interests of homeowners but did not inappropriately burden HOAs in Colorado. 

Congratulations Senator Carroll on being elected President of the Senate!

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Federal Aid Programs for Colorado Flood Disaster Recovery

There's no doubt about it that the flooding in Colorado has been absolutely devastating.  In fact, insurance professionals are now classifying this natural disaster as a one thousand year flood event!  If you are in the unfortunate position of having no insurance or inadequate insurance to cover your losses, check out this FEMA Fact Sheet on Federal Aid Programs for State of Colorado Disaster Recovery.

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Have you Revised your Collection Policy Yet?

I previously blogged about the necessity of updating association collection policies and procedures as a result of recent legislative changes effective on January 1, 2014.  

In addition to preparing a revised collection policy, associations are also required to send new collection notices which provide specific information to delinquent owners. The notices must provide the owner(s) thirty days to cure the delinquency and provide additional information about the debt before an account can be turned over to an attorney for collections. An association will also be required to offer and approve a ‘one-time’ payment plan of not less than six months to delinquent homeowners.   

To ensure that there is no disruption in the collections process, it is critical that associations obtain and approve the revised collection policies and notices NOW! Failure to have a revised collections policy in place prior to January 1, 2014 will unnecessarily delay the collections process by several weeks or more and jeopardize the association’s ability to collect delinquent assessment fees. Associations should also seriously consider immediately implementing the revised collection policy to ensure that any ‘kinks’ are worked out before January 1, 2014.

 

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Freddie Mac Revises Policy on Assessment Delinquencies in Superlien States

CAI National has just published the following statement on a new Freddie Mac policy addressing delinquencies in superlien states.  Since Colorado is lucky enough to be a superlien state, this new policy will impact Colorado HOAs.  Here is what CAI has to say about the new policy: 

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Announcement Published by DORA on Annual Registration for All HOAs

Consistent with the passage of House Bill 1134, the Colorado Department of Regulatory Agencies (DORA) has just announced that all HOAs, including pre-CCIOA communities, will be required to register annually with the HOA Information and Resource Center.  Here's the News Release from DORA

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HOA Legislative Update Class Hosted by APCHA in Aspen!

It is my pleasure once again to teach the annual Legislative Update for Homeowner Associations which is hosted in Aspen by the Aspen/Pitkin County Housing Authority (APCHA).  This seminar is free of charge and is open to board members, homeowners and HOA managers.  If you live in the Aspen area or are vacationing there, please join us for this seminar!  In addition to the information in this APCHA flyer, here are some specifics you need to know:

Date of the Seminar:  Thursday, August 22, 2013

Time:  11:30 am to 1:30 pm

Location:  Aspen City Council Chambers located at 130 South Galena Street

For more information and to RSVP, please call APCHA at 970-920-5050

Hats off to APCHA for providing this outstanding service for those living in and serving HOAs in the Aspen area!

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Bill Introduced in United States Senate to Replace Fannie and Freddie

If you remember during the mortgage meltdown a few years ago, Fannie Mae and Freddie Mac became embroiled in scandal and bad press.  It now looks like there is some movement in the United States Congress to deal with Fannie and Freddie.  CAI National has just reported that eight United States Senators have introduced a bill that would wind down the operations of these quasi-governmental entities.  The big question is whether or when the bill will get traction.  Here's what CAI has reported: 

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HOA Debt Collection and Manager Licensure Bills Just Signed Into Law!

Just minutes ago, Governor Hickenlooper signed the HOA Debt Collection (HB 1276) and the HOA Manager Licensure (HB 1277) bills into law.  Check out this update from CAI's Legislative Action Committee for a synopsis of both bills. 

It has been our pleasure here at Winzenburg, Leff, Purvis & Payne, to bring you the latest updates on HOA bills during the 2013 legislative session.  For more information on what your HOA needs to do to comply with these new laws, keep your eye on this blog! 

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Community Association "To Do" List: Post 2013 Legislative Session Edition

The Colorado General Assembly concluded its 2013 session on Wednesday after approving several pieces of legislation that impact community associations. We have covered the legislation from start to finish and will continue to provide updates on key legislation, such as the new manager licensure law, as it moves through rule-making and implementation. For now, association boards should add the following action items to their upcoming meeting agendas:

Revise architectural guidelines to remove requirements that owners install turf grass. SB 183, which was signed into law today by Governor Hickenlooper, takes effect immediately and applies to all new landscaping and replacement or redesign of existing landscaping. With water restrictions in effect along the Front Range, associations should prepare to receive landscaping plans that eliminate turf grass. The Denver Botanic Gardens and Colorado State University's Extension Services offer classes and resources on xeriscaping.

Adopt a policy concerning the installation of electric vehicle charging stations. SB 126 also takes effect immediately and applies most directly to townhomes and condominium associations.

Revise the association's collection policy to comply with the requirements of HB 1276. This law does not take effect until January 1, 2014, but it's not too soon to incorporate a six-month payment plan option for owners, the required board authorization for each individual foreclosure, and the other statutory mandates into your association's policy.

Register with the Division of Real Estate's HOA Information Office and Resource Center. HB 1134, which takes effect August 7, 2013, extends the registration requirement to common interest communities formed before July 1, 1992. If your association is already registered, then check this one off the list!

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Update from CAI's Legislative Action Committee on HOA Reform Bills

Members of Community Associations Institute in Colorado have received the following update from CAI's Colorado Legislative Action Committee on the HOA Reform Package of bills: 

 

HOA Reform Bills Cross the Legislative Finish Line With Little Time to Spare

 

It is an understatement to say that the 2013 legislative session has been a busy one for CAI’s Colorado Legislative Action Committee (CLAC)! As you know, key legislators introduced a package of bills they called the HOA Reform Package which was aimed at providing consumer protections for owners and residents in HOAs. While CLAC did not author the bills, we were extremely involved in working the legislation in an effort to seek a balance between the rights of individual homeowners with their associations as a whole. While some folks have said that we just should have killed some of the bills, given the make-up of the legislature, we knew this was an impossible task and ultimately wouldn’t serve anyone well. As a result, we rolled up our sleeves and got to work. We are pleased with the results of our work with key legislators and ultimately ended up coming out in support of the following four pieces of legislation. 

 

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Manager Licensure Bill Headed to the Governor's Desk!

Yesterday was an extremely busy one for the HB 1277 - the manager licensure bill.  As I reported, an amended version of the bill was passed by the full Senate on 3rd reading on a party line vote and then on the same day was taken up by the House to consider the Senate amendments.  The House concurred with the Senate amendments on a 47 to 18 vote and then voted to repass the bill on a 37 to 28 party line vote.  Once the bill is formalized, it will be sent to Governor Hickenlooper for consideration and we expect him to sign the bill into law.

CAI's Colorado Legislative Action Committee (CLAC) will be putting out a communication to CAI members today on this and the other bills which were a part of the HOA Reform Package.  As soon as that communication has been sent, I will post it on this blog.

 

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Manager Licensure Bill Through the Senate and Headed Back to the House for Concurrence

Just before 8:00 pm on Friday evening, the Colorado Senate took up the manager licensure bill (HB 1277) on second reading and passed the bill with an amendment dealing with the issue of addressing applicants for a license who have a felony.  The amendment provides the Director of the Division of Real Estate with the authority to consider felonies and rehabilitation on a case-by-case basis.  However, this analysis will not apply to an offense involving:  (1) unlawful sexual behavior; (2) burglary; (3) or any felony involving fraud, theft, larceny, embezzlement, fraudulent conversion or misappropriation of property. 

The Senate took up the bill on 3rd reading this morning and approved another clean-up amendment which would exclude low level drug offenses from disqualifying an applicant for licensure.  HB 1277 was then passed on 3rd reading on a 20 to 15 party line vote.  The bill will now be sent to the House for concurrence with Senate amendments which we expect will happen on a party line vote and then be sent to Governor Hickenlooper to be signed into law.

Stay tuned for more information on HB 1277 as it proceeds through the final days of the 2013 legislative session which is set to adjourn on Wednesday.  On a final note, since the session is moving fast, the bill with amendments has not yet been posted on the website for the Colorado General Assembly.  We will link to the amended bill as soon as it is posted. 

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Get Charged Up! Electric Vehicles Coming to a Neighborhood Near You

Governor Hickenlooper signed SB13-126 into law today, requiring community associations to permit owners to install Type 1 and Type 2 electric vehicle charging stations on their lots and on limited common elements designated for an individual owner’s use. SB13-126 adds Section 106.8 to the Colorado Common Interest Ownership Act and states the following reason for the legislation:

The primary purpose of this section is to ensure that common interest communities provide their residents with at least a meaningful opportunity to take advantage of the availability of plug-in electric vehicles rather than create artificial restrictions on the adoption of this promising technology

By M.O. Stevens (Own work) [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC-BY-SA-3.0-2.5-2.0-1.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

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HOA Debt Collection Bill Headed to the Governor!

On a 47 to 17 vote, the Colorado House of Representatives just concurred with Senate Amendments to HB 1276 - the HOA debt collection bill.  The bill will now be formalized and sent to Governor Hickenlooper who we expect to sign the bill into law.  Once that happens, the bill will become effective on January 1, 2014.  Check out our blog entry from yesterday outlining provisions of the bill and stay tuned for an update on when the Governor signs the bill into law!

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Manager Licensure Bill Clears Senate Local Government Committe on Party Line Vote

On a 3 to 2 vote, the Senate Local Government Committee just approved an amended version of House Bill 13-1277 (HB 1277).  This bill, which would require the licensure of community association managers and management company executives in Colorado, will now be sent to the Senate Appropriations Committee for consideration.  We expect the bill to clear the Appropriations Committee and make it through the Senate on a party line vote.  Once that happens, the bill will go back to the House for concurrence and then on to Governor Hickenlooper to be signed into law with an effective date of July 1, 2015.

 

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HB 1134 Clears Senate on Party Line Vote

As expected, House Bill HB 1134 (HB 1134) has cleared the Senate on a 20 to 15 party line vote.  HB 1134 is the bill that will study the need for expanded regulatory authority for the HOA Information Officer and the HOA Information and Resource Center.  Since the bill was not amended in the Senate, the next stop for the bill will be Governor Hickenlooper's desk where we expect him to sign HB 1134 into law.

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HOA Debt Collection Bill Sails Through Senate with Unanimous Approval

An amended version of House Bill 13-1276 (HB 1276), the bill which addresses HOA debt collections, just sailed through the Senate on a unanimous vote of 35 to 0.  Given the sometimes ugly partisan politics which have been present in these final days of the 2013 legislative session - a 35 to 0 vote in the Senate is rather astounding and demonstrates a bipartisan commitment to ensuring that HOAs are dealing fairly with owners who are delinquent in their assessments.  The bill will now go back to the House for concurrence with Senate amendments and then on to the Governor who we expect to sign HB 1276 into law with an effective date of January 1, 2014. 

Here are highlights of HB 1276: 

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HB 1134 and HB 1276 Clear the Senate Local Government Committee

House Bill 1134 (HB 1134) and House Bill 1276 (HB 1276) just cleared the Senate Local Government Committee and will proceed to the full Senate for consideration.

HB 1134, which is being sponsored in the Senate by Senate Majority Leader Morgan Carroll, was approved by the Committee on a 3 to 2 vote and was sent to the full Senate with a favorable recommendation.  The bill requires the Colorado Division of Real Estate to study the need for regulating HOAs in Colorado.  The bill also requires pre-CCIOA communities to register with the Division and simplifies the registration process for all HOAs.  HB 1134 is expected to be approved by the full Senate on a party line vote and to ultimately be signed into law by Governor Hickenlooper.

HB 1276, which is being sponsored in the Senate by Senator David Balmer and Senator Majority Leader Carroll, was approved by the Committee on a 5 to 0 vote and was also sent to the full Senate with a favorable recommendation.  Prior to an HOA sending a delinquent account for action to legal counsel, a collection agency or to sell the debt to a 3rd party, the Association must first provide the delinquent owner with a one-time opportunity to enter into a payment plan for a minimum of six months.  If the owner defaults on the payment plan or fails to make their current month assessment payment, the association is permitted to proceed with collections.  In addition, the bill prohibits HOAs and parties who purchase the lien of an association to proceed to foreclosure unless the lien secures what would equal at least six months of past due assessments.  HB 1276 is also expected to be approved by the full Senate with bipartisan support and signed into law by the Governor.

Keep your eye on this blog for timely and important updates on these bills and House Bill 1277 - the manager and management company licensure bill which was just read across the desk (meaning introduced) in the Senate this morning. 

 

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Manager Licensure Bill Headed to the Senate!

Today the Colorado House of Representatives passed HB 1277 on 3rd reading on a 35 to 28 vote.  The bill will now move to the Senate for consideration where we do not expect any major obstacles.  Since the 2013 Colorado legislative session is slated to adjourn on May 8th, this community association manager and management company licensure bill has plenty of time to proceed through the remainder of the legislative process.

As always, you can count on us to keep you updated with timely information on legislation impacting HOAs!

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SB 52 Postponed Indefinitely Today in Senate Judiciary Committee

On a 3 to 2 vote, the Senate Judiciary Committee just postponed idefinitely (which means the bill is dead for this legislative session) Senate Bill 52 which addressed construction defects in transit-oriented developments.  The bill as introduced, would have created significant unintended costs for homeowner associations when pursuing construction defect claims.  While the bill is dead for this session, we do expect the issue to remain on the drawing board and to be addressed during the 2014 legislative session. 

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Manager Licensure Bill Headed to House Floor!

An a vote of 11 to 1, the House Appropriations Committee just approved with a favorable recommendation to the full House HB 1277 which was amended in the House Business Committee.  We expect the House to take up the bill quickly and approve it on 2nd and 3rd readings.  Given the fact that only one Republican voted against the bill in the Appropriations Committee, it will be interesting to see whether we have a party line vote on a bill which would require the licensure of community association managers and management companies.

As always, stay tuned to this blog for timely updates on important legislation impacting HOAs!   

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HB 1134 and HB 1276 Headed to the Senate for Action!

Just minutes ago, the House of Representatives approved HB 1134 and HB 1276 on third reading and both bills are now headed to the Senate for action. 

HB 1134, as approved by the House on a 36 to 25 vote, will study the need for a broad expansion of power for the HOA Information Officer and HOA Information and Resource Center.  The bill will also simplify the registration process for associations with the Division of Real Estate and requires that all HOAs - including pre-CCIOA communities - must register with the Division.

HB 1276, as approved by the House on a 45 to 16 vote, provides that HOAs and 3rd parties who have purchased debt from associations must provide homeowners with a one time opportunity to enter into a payment plan of at least 6 months to satisfy their delinquency before taking other action to collect the debt.  In addition, the bill requires at least what would equal 6 months of past due assessments prior to an association or 3rd party foreclosing on the association's lien.  

HB 1134 and HB 1276 are both expected to proceed quickly through the Senate and be signed into law by Governor Hickenlooper.   

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HB 1276 Passes on Second Reading

House Bill 1276, the "HOA Debt Collection" bill, just passed through its second reading in the House.

The bill has been revised to address association lien assignment.  Previously, there was a potential loophole by which an association could assign a lien to a third party, who could then foreclose sooner than the association.  Now, any assignee of an association lien cannot foreclose sooner than the association, and the assignee must also honor the six-month payment plan associations must offer to owners.

This bill must pass through one more reading in the House before it is sent to the Senate, where we expect it to pass.

Subscribe to our blog for up-to-the-minute updates on important legislation that impacts Colorado community associations.

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Overhauled Version of HB 1134 Moving Through the House

On Tuesday, the House Business, Labor, Economic and Workforce Development Committee approved an overhauled version of HB 1134 and the bill was just taken up on the House floor and passed on second reading.   

As noted in my January 21st blog entry, the bill as originally introduced broadly expanded the powers of the HOA Information Officer and HOA Information and Resource Center which are both housed within the Colorado Division of Real Estate. Instead of proceeding with this broad expansion of power, the bill was overhauled to study the HOA regulatory models in Nevada, Virginia and Florida. In particular, the study will assess options, costs and the need for the Division of Real Estate to:

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Manager Licensure Bill Clears First Hurdle in the House

Earlier this afternoon, on a 6 to 5 party line vote, the House Business, Labor, Economic & Workforce Development Committee passed an amended version of HB 1277 - the manager and management company licensure bill. 

Here are some of the highlights of the bill as originally introduced:

● Beginning on July 1, 2014, community association managers and management company executives who directly supervise managers will be required to be licensed in Colorado.  As originally drafted, this provision was very confusing. 

● The CMCA credential, AMS designation and PCAM designation are recognized in the bill as the foundation for the license. In addition to holding the CMCA credential or one of the designations, managers will be required to complete a course and pass an examination relating to applicable Colorado law. As originally introduced, the examination provisions were extremely confusing and in need of clarification.   

● Managers will be required to submit to and pass a criminal background check prior to being issued a license. 

 

● The Division of Real Estate will have jurisdiction to discipline licensed managers and management company executives required to hold a license. 

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HOA Debt Collection Bill Approved by House Business Committee

Late yesterday afternoon, the House Business, Labor, Economic and Workface Development Committee passed an amended version HB 1276.  Highlights of the bill as originally introduced include the following:  

● HOAs are not permitted to refer delinquent accounts to a collection agency or legal counsel for action unless they have adopted and comply with a Collections Policy with specified minimum provisions.

● As part of the Collections Policy, homeowners must be provided with notice of the delinquency and be informed that if the delinquency is not cured within 30 days their account may be turned over to a collection agency or legal counsel for action.

● Prior to a delinquent account being turned over to a collection agency or a law firm for legal action, a homeowner has a one-time opportunity to enter into a 6 month payment plan (association boards may extend the time of this payment plan if they wish) with their association to cure the entire amount of the delinquency. If the homeowner defaults on the payment plan or fails to pay their current month assessments, the association may immediately proceed with other action to collect on the delinquency.

● HOAs may only proceed with foreclosure if the balance of the assessments and charges secured by its lien equals or exceeds six months of common expense assessments based on a periodic budget adopted by the association.

● The board of an HOA must take a formal vote to authorize proceeding with a judicial foreclosure. This duty to take a formal vote cannot be delegated to an attorney, insurer, manager or any other person.

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Denver Water Announces Watering Restrictions Effective Today

Given the severe drought conditions which Colorado is experiencing, Denver Water has announced that watering restrictions will go into effect beginning today - April 1st.  For those of you who are on the look out for April Fools jokes, this is not one of them.  Here's the announcement from Denver Water outling the restrictions.  For more information, check out the website for Denver Water

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Important Communication from CLAC: Two Significant Bills Introduced Impacting HOAs in Colorado

The following communication from CAI's Colorado Legislative Action Committee (CLAC) has been sent to CAI members in Colorado on the introduction of bills addressing manager licensure and HOA debt collections.  In addition to future communications from CLAC, stay tuned to this blog for important updates on these significant bills as they proceed through the legislative process.

Two Significant Bills Introduced Impacting HOAs in Colorado

 

House Bill 13-1277; Community Association Manager Licensure

Representative Angela Williams (D – Denver), Chair of the House Business, Labor, Economic and Workforce Development Committee, has just introduced House Bill 13-1277 (HB 1277) in the House of Representatives to require the licensure of community association managers and designated executives of management companies in Colorado. Senator Morgan Carroll (D-Aurora), the Senate Majority Leader, is the primary sponsor of the bill in the Senate. This bill will begin in House and is assigned to the Business, Labor, Economic and Workforce Development Committee. 

 

Through a licensure program, the purpose of HB 1277 is to ensure the competency of community association managers and management company executives who are responsible for the direct supervision of managers. While CAI’s Colorado Legislative Action Committee (CLAC) submitted an application (which included a recommendation for a licensure program) to the Colorado Department of Regulatory Agencies (DORA) last year to determine whether the licensure of community association managers was necessary, HB 1277 was not drafted by CLAC but does include many of our recommendations. 

 

Here are some of the highlights of the bill as originally introduced:

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HOA Debt Collection Bill Just Introduced in Colorado

Late this afternoon, House Bill 13-1276 ("HB 1276") was introduced in the Colorado House of Representatives by Representative Angela Williams (D-Denver) who is the Chair of the House Business, Labor, Economic and Workforce Development Committee ("Labor Committee").  The co-primary sponsors of the bill in the Senate are Senator Morgan Carroll (D-Aurora) and Senator David Balmer (R-Centennial).  The bill will begin in the House and has been assigned to the Labor Committee.

The purpose of the bill is to: (1) de-escalate the scorched earth perception that HOAs immediately resort to foreclosure when small delinquencies are at issue; and (2) to provide a one-time opportunity for homeowners to enter into a payment plan to satisfy their delinquency prior to their account being turned over to a collection agency or attorney for legal action.

Here are a few highlights of the bill as originally introduced: 

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Foreclosure 'Reform' or Headache for Associations?

Recently introduced House Bill 13-1249 has been promoted as an attempt to ‘reform’ the public trustee foreclosure process by requiring lenders to prove that they hold the Deeds of Trust being foreclosed and further requiring them to negotiate and work with borrowers requesting a loan modification or other foreclosure prevention alternatives. If the Bill is passed into law, it will undoubtedly provide greater protections to homeowners which may enable them to retain their home and stimulate them to payoff their association delinquencies. A closer reading of the Bill, however, suggests that an association may be negatively impacted from the additional requirements imposed on lenders. 

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Xeriscape Bill Heading to Senate Floor

Yesterday afternoon a slightly amended version of SB 183 was approved on a 3 to 2 party line vote by the Senate Local Government Committee ("Committee").  The bill is being sent for consideration by the full Senate where we expect the bill to be passed on second and third readings and then proceed to the House for consideration. 

Based upon questions and statements made by Senator Vicki Marble at the hearing yesterday, we do expect an amendment to be taken up on the floor of the Senate which will exempt HOAs from complying with some requirements of the bill if the municipality where the association was developed requires a landscaping scheme which is not consistent with the parameters of SB 183.  Since that amendment has not yet been drafted, we cannot provide you with the exact language which will ultimately be considered by the full Senate. 

Green Industries of Colorado ("GreenCo"),which is an alliance of eight trade associations representing all facets of horticulture and landscape industries in Colorado, testified in favor of the bill with the hope that their best practices would be integrated into the SB 183.  While these best practices are certainly useful to HOAs when creating their design guidelines relating to xeriscaping, it was the consensus of the Committee that it is not appropriate to include them in the actual legislation.  Unfortunately, it was a challenge to link the best practices of GreenCo to this blog entry.  However, you can view these Best Management Practices by visiting the website for GreenCo.   

As always, we will continue to keep you updated on SB 183 as it proceeds through the Senate and moves to the House for action. 

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Xeriscape Bill Introduced by Senator Morgan Carroll

Yesterday, Senator Morgan Carroll introduced Senate Bill 13-183 ("SB 183") to amend current law as it relates to HOAs requiring homeowners to install turf grass on any portion of property they own or are responsible for.  The bill is intended to promote the utilization of xeriscaping as a response to the drought conditions we are continuing to experience in Colorado while providing HOAs with the authority to regulate the types of drought tolerant plantings and hardscapes which may be installed by owners. 

As initially introduced, the bill provides as follows: 

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Electric Car Charging Station Bill Headed to the House

The Colorado Senate has passed an overhauled version of SB 126 on third reading and the electric car charging station bill is now headed to the House of Representatives for action.  The bill has already been assigned to the House Transportation and Energy Committee and we expect the bill will continue to move swiftly through the legislative process.

We will provide you with important updates on SB 126 as it is considered in the House.   

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Electric Car Charging Station Bill Passed on Second Reading Without Amendments

Just minutes ago, the Senate passed the overhauled version of SB 126 on second reading by a voice vote on the floor without further amendments. 

Republican Senator David Balmer spoke before the vote in opposition to the bill citing constituent concerns that older apartment buildings are not wired appropriately to host electric car charging stations.  Republican Senator Kevin Lundberg also spoke in opposition to the bill stating that the installation of charging stations in apartment buildings should not be regulated by law but should be privately addressed between the landlord and tenant. 

SB 126 is expected to be taken up and passed on 3rd reading early next week in the Senate and will then be sent over to the House of Representatives for consideration.  As always, stayed tuned to this blog for important updates on SB 126! 

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Overhauled Electric Car Charging Station Bill Passed by Senate Local Government Committee

The Senate Local Government Committee just passed out of Committee an overhauled version of SB 126 which was introduced by Senator Guzman to address the installation of electric car charging stations in apartment buildings and HOAs.  In terms of HOAs, the bill as amended, provides as follows:

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Construction Defect Bill Pulled from Senate Judiciary Committee Calendar

Senate Bill 13-052 ("SB 52"), the bill introduced by Senator Mark Scheffel to address construction defects in "transit-oriented developments," was scheduled to be heard before the Senate Judiciary Committee today.  As just reported by the Denver Business Journal, Senator Scheffel asked that the bill be removed from the Committee calendar while the Association of Homebuilders and Denver Regional Council of Governments finish a study on construction in developments near mass transit centers.

The bill as introduced would gut essential construction defect protections for HOAs situated within one-half mile of any commuter rail stop, commuter light rail stop, or commuter bus stop.  My blog posted on January 23rd outlines the provisions of the bill as originally introduced. 

As always, keep your eye on this blog for important updates on SB 52 and other bills impacting HOAs! 

 

 

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Homeowner's Insurance Reform Bill Introduced in Colorado House of Representatives

Yesterday, Representative Clare Levy introduced in the Colorado House of Representatives House Bill 13-1225 ("HB 1225") entitled the Homeowner's Insurance Reform Act of 2013.  The provisions of the bill, aimed at providing information and protections to homeowners, are quite extensive and include the following: 

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2012 Annual Report of HOA Information and Resource Center Just Published!

The Colorado Division of Real Estate has just published the 2012 Annual Report of the HOA Information and Resource Center. While the number of complaints received by the HOA Information Office in 2012 is higher than the 478 complaints received during 2011, for the 8,347 HOAs which registered in 2012 representing 853,542 units – the office received “576 complaints from 309 different homeowners and residents.” 

Here are some interesting facts from the 2012 Annual Report:

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Electric Car Charging Station Bill Heard in Senate Local Government Committee

The Senate Local Government Committee just held a hearing on SB 126 - the bill which addresses the installation of electric car charging stations in HOAs and apartment buildings.  While the testimony supported the concept of electric car charging stations, there was also testimony addressing the practical realities of the bill as introduced. Extensive amendments will be introduced on the bill and those amendments will be taken up by the Committee on February 12th with no further testimony expected. 

As always, stay tuned to this blog for timely updates on legislation impacting HOAs!

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PUC Regulation - A Call to Action

Last week Molly Foley-Healy alerted you to proposed PUC regulations that could impact towing in community associations. Earlier today a Call to Action was submitted to CAI members to alert them to these proposed changes. Click through the jump to see the Call to Action, and check back here frequently to keep abreast of legislation that can affect your community.

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Bill Introduced to Promote Transparency in Special Districts Furnishing Domestic Water or Sanitary Sewer Services

Since some HOAs are located in special districts that regulate domestic water or sanitary sewer services, I thought you might be interested in House Bill 13-1186 ("HB 1186") which was introduced in the Colorado House of Representatives yesterday by Representative Edward Vigil

HB 1186 requires a special district that provides domestic water or sanitary sewer services to hold a public meeting before fixing or increasing fees or other charges for its services.  The bill also addresses the notice requirements for these public meetings.  Finally, the bill requires these special districts to record a public disclosure document on all property located within the special district to provide notice of:  (1) the name of the special district; (2) the powers of the special district; (3) information regarding the special district's service plan or statement of purpose; and (4) a statement of the methods authorized by law for the special district to raise revenue for capital needs and the costs of operations. 

As always, you can rely on us to provide updates on HB 1186 (and other legislation important to HOAs) as it proceeds through the legislative process.

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Electric Car Charging Station Bill Permits HOAs to Apply for Grants to Install Charging Stations

Late yesterday afternoon, I blogged that SB 126 had just been introduced in the Colorado Senate by Senator Lucia Guzman.  In addition to the provisions outlined in my blog yesterday, the bill provides that associations would be permitted to apply for funds from Colorado's Electric Vehicle Grant Fund.  The amount of funds that would be made available for the installation of electric car charging stations in HOAs is currently unkown.

 

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Extensive Electric Car Charging Station Bill Impacting HOAs Just Introduced in the Colorado Senate

Senate Bill 13-126 (“SB 126”) was introduced by Senator Lucia Guzman today in the Colorado Senate. The bill, which is intended to provide consumers with the ability to charge electric cars in apartments, condominiums and common interest communities, is quite extensive and could have significant implications for existing condominiums. Here’s a synopsis of how the bill, as originally introduced, impacts associations:

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Proposed Changes to Towing Regulations Could Negatively Impact HOAs

On January 25th, a Notice of Proposed Rulemaking was published by the Colorado Department of Regulatory Agencies (“DORA”) in The Colorado Register to address a wide variety of issues – including the towing of vehicles from private property. 

Currently under Colorado law, HOAs are permitted to enter into a contract with a towing company to have the company act as an agent of the association to determine whether a vehicle should be towed. In other words, associations can currently hire a towing company to periodically patrol for parking violations and tow vehicles which are parked in violation of an association’s covenants, rules and regulations. 

 

While some associations contract directly with a towing company to patrol for parking violations and to tow when appropriate, other associations utilize a practice where a member of the board or a managing agent contacts the towing company to request that a vehicle be towed. 

 

While upon initial review it doesn't seem this latter practice would be impacted by the proposed changes to the Public Utilities Commission rules regulating towing, the former practice would not be permissible.  However, in addition to dealing with the issue of towing companies acting as the agent for associations, the proposed rules should be clarified to ensure that managers and managements companies have the authority to authorize a tow. 

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Senate Bill Introduced to Address Construction Defects in "Transit-Oriented Developments"

Last week, Senator Mark Scheffel introduced Senate Bil 13-052 ("SB 52") which addresses construction defect claims for "transit-oriented developments."  These developments are defined in the bill as " . . . any multi-family residential or mixed-use project within one-half mile of any commuter rail stop, commuter light rail stop, or commuter bus stop."  Obviously, many HOAs in the greater Denver area would fall within this definition. 

As introduced, SB 52 would:

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Common Sense and Affordable Legislative Approaches Must Be a Priority

As Chair of CAI's Colorado Legislative Action Committee ("CLAC") and a political junky, I avidly follow federal and state legislative and regulatory initiatives relating to HOAs.  If you follow our blog, you know that on Friday Representative Su Ryden introduced HB 1134 which significantly increases the obligations and authority of the HOA Information Office & Resource Center and the HOA Information Officer. 

Not speaking as Chair of CLAC or a representative of Community Associations Institute, but speaking as an attorney who specializes in HOA law and who works daily with HOAs to address a variety of issues and challenges, I have to say that HOA legislation should address significant and pervasive problems in an efficient and cost effective manner.  

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Bill Introduced in Colorado House to Broaden Authority and Responsibility of HOA Information Office

On Friday, House Bill 13-1134 ("HB 1134") was introduced by Representative Su Ryden in the Colorado House of Representatives to broaden the authority of the HOA Information Officer and to clarify the responsibilities of the HOA Information and Resource Center.  The primary sponsor of the bill in the Senate is Senator Morgan Carroll.  

While the HOA Information Office and HOA Information Officer are currently authorized to facilitate the registration process, provide information, collect complaints and publish an annual report on the complaints, this bill broadens the authority as follows: 

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New Mortgage Guidelines with Ability to Pay Provisions Released

The Consumer Financial Protection Bureau has just released new mortgage guidelines which are intended to ensure that purchasers of homes have the ability to pay the costs associated with their homes which includes the ability to pay their HOA assessments.  Community Associations Institute (CAI), which has proactively been representing the interests of HOAs during the development of these new guidelines, has released the following information on the guidelines which will become effective in January of 2014:                                                                         

Qualified Mortgage (Ability to Repay) Guidelines Released

                                                                                                                          

On January 10, the Consumer Financial Protection Bureau (CFPB) released its long-awaited federal Qualified Mortgage (QM) standard. The new federal guidelines, which are required by the Wall Street Reform and Consumer Protection Act (commonly known as the Dodd Frank Act), establish minimum requirements for all mortgage loans.

 

As anticipated, the QM standard considers community association assessments a key factor when determining if a borrower is qualified for a mortgage. Ensuring borrowers can afford to pay association assessments will lead to stronger communities and prevent foreclosures.                               

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2013 Colorado Legislative Session Kicks-Off Today!

Today is the opening day of the 2013 legislative session in Colorado!  As I mentioned in previous blog postings this week, Senator Morgan Carroll has gone on record that manager licensure and beefing up the HOA Information and Resource Center are on the drawing board.  However, we don't expect those bills to be introduced early on in the legislative session. 

As always, you can count on Winzenburg, Leff, Purvis & Payne to provide timely information and updates on this blog as HOA legislation is introduced and proceeds through the legislative process. 

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Senator Carroll Commited to HOA Czar and Manager Licensure

As the 2013 legislative session is slated to begin on Wednesday, Senator Carroll has gone on record with the Colorado Springs Gazette on her commitment to pass legislation that would create an HOA Czar and to license community association managers.  The bills will be introduced in the House and are expected to receive support in both chambers which are controlled by the Democrats.  

CAI's Colorado Legislative Action Committee ("CLAC") has been working with Senator Carroll and other key legislators on these important issues.  Members of Community Associations Institute ("CAI") should keep an eye on the newsletters and email from their chapters for important updates.  In addition, once these bills (and other HOA legislation) have been introduced, keep your eye on this blog for updates as the bills proceed through the legislative process.

It looks like 2013 is shaping up to be another busy legislative session for HOAs!

 

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Speaker of the House Not a Fan of HOAs

Side Streets, carried in the Saturday edition of The Gazette in Colorado Springs, highlighted an interview with Mark Ferrandino - the new Speaker of the Colorado House.  Clearly, the Speaker is not a fan of HOAs and believes members of HOAs need "a way to complain and enforce the laws . . . "  As a result, he's in favor of providing the HOA Information Officer with the authority to investigate and enforce Homeowner Bill of Rights provisions of the Colorado Common Interest Ownership Act ("CCIOA"). 

The Speaker's disenchantment with HOAs comes from personal experience.  Evidently, at some point in time, the Speaker purchased a home in an HOA and thought the assessments were being handled through his mortgage payment.  As a result, he did not make his $25.00 monthly assessment payment.  After six months of not paying his assessments, the Speaker received notice that a lien had been recorded on his home. 

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Electric Car Legislation Anticipated During the 2013 Legislative Session in Colorado

Yesterday, the Denver Post reported that Senator Lucia Guzman and Representative Cristana Duran are planning to introduce a bill during the 2013 legislative session in Colorado ". . . to incentivize HOAs and other entities to build electric-car-charging stations."  However, the Post also reported that Duran said "We don't want to mandate their construction."

Since there is little doubt that the demand for charging stations in HOAs will continue to grow, associations should start taking a look at:  (1) how and where charging stations might be constructed; (2) how to provide residents with use of the charging stations; (3) how to handle the costs associated with the stations; and (4) whether there are any safety considerations to take into account. 

In the event the bill offers useful financial incentives for HOAs to construct electric car charging stations, now is a great time to start giving serious consideration to this important trend in green energy.

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Knowledge, Participation and Solutions Empower Homeowners

Last Thursday, as Chair of CAI's Colorado Legislative Action Committee, I served on a panel for a Town Hall Meeting hosted by State Representatives Angela Williams, Su Ryden, Rhonda Fields, Nancy Todd and State Senator Morgan Carroll. The topic of the evening revolved around HOAs, the problems folks living in them sometimes experience and whether Colorado law needs to be revised to address these problems.

As I listened to homeowner advocates and folks who have experienced real problems with their HOAs, three important principles for empowerment came to mind:  (1) homeowners are empowered when they are knowledgable; (2) homeowners are empowered when they participate in the governance of their HOAs; and (3) homeowners are empowered when they focus upon and are part of real and reasonable solutions.

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New HOA Information Officer Hired by Division of Real Estate

Last week, attorney Gary Kujawski began his employment as the HOA Information Officer with the Colorado Division of Real Estate.  Since this important position has been vacant for about six months, we are thrilled to see that it has been filled and are certain that Mr. Kujawski will use his knowledge and experience in training to provide homeowners and boards with great resources on the HOA Information and Resource Center website. 

Here's a synopsis of Mr. Kujawksi's experience from his law firm website:

"Experienced attorney in the areas of:

Real Estate Law:
 - Review, consultation and preparation of   
   real estate documents
 - Short Sale and Foreclosure consultation
 - Title issues and review
 - Closing assistance
 - Brokerage and Agent training

Business Law:
 - Formation of Corporations and LLC's
 - Business Transactions

Estate Planning:
 - Wills
 - Trusts
 - Powers of Attorney
 - Health Care Directives
 - Beneficiary Deeds
 - Probate

Homeowner Associations & Timeshares

Landlord-Tenant Law & Property Management
 - Property Management Agreements
 - Lease Agreements

Real Estate Instructor - Corporate Trainer and Mediation Services"
 

 

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HUD Publishes FAQs on New Condominium Guidelines

The U.S. Department of Housing and Urban Development (“HUD”) has published FAQs on the latest revisions to the condominium approval guidelines that were published last Thursday in HUD Mortgagee Letter 2012-18. These latest revisions will remain in effect until August 31, 2014 – unless further extended by the Federal Housing Administration (“FHA”). 

During this period of time, it is anticipated that HUD will continue to work on proposed rules for FHA-approved condominiums and publish those proposed rules in the Federal Register for public comment prior to adoption of any final rules. Since HUD has been painfully slow and ineffective in dealing with real world concerns with the condominium approval guidelines to date, we can only hope these bureaucrats will shock us with their efficiency in moving forward. In the meantime, the temporary revisions to the guidelines are at least a step in the right direction. 

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New FHA Condominium Guidelines Released

The U.S. Department of Housing and Urban Development ("HUD") has just released updated guidelines relating to FHA certification for condominium associations. Based upon a preliminary review of the new guidelines conducted by Community Associations Institute, here is an update relating to the changes:

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CAI National Concerned Anticipated Changes to FHA Guidelines Won't be Sweeping

FHA officials have informed CAI National that they anticipate revisions to the condominium guidelines will be released this week.  However, based upon this communication, CAI is not convinced these changes will be sweeping or substantive in nature.  For more information from CAI National, check out FHA Signals Release of New Condominium Guidelines.  And as always, you can count on us to keep you updated on the latest information on FHA certification for condominium associations!

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Fannie Mae and Freddie Mac Change Short Sale Requirements

In an effort to stem losses from foreclosures, Fannie Mae and Freddie Mac have just announced a policy change addressing short sales.  CAI National released the following update outlining these changes.

“Fannie Mae and Freddie Mac have announced changes to short sale policies to help more borrowers avoid foreclosure and stabilize neighborhoods. Mortgage servicing companies will begin using the new short sale procedures in early November.

A short sale allows a homeowner to sell their home for an amount less than the value of the existing mortgage. While Fannie Mae and Freddie Mac incur losses in a short sale, these losses are significantly lower than the costs of foreclosure. As a result, the short sale is quickly becoming a preferred foreclosure alternative for both Fannie Mae and Freddie Mac.

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U.S. Government Announces Plans to Shrink Fannie Mae & Freddie Mac

CAI National recently released the following communication addressing plans by the U.S. Government to shrink Fannie Mae and Freddie Mac.  It is currently unknown whether, or to what extent, this course of action will impact the financing of mortgages in community associations.

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HUD - It's Time to Wake Up and Smell the Coffee!

Following the lead of our own Congressman Perlmutter, 69 members of the United States Congress just sent a letter to the Secretary of the United States Department of Housing and Urban Development ("HUD"), asking Secretary Donovan to take action to revise some unreasonable requirements condominium associations must comply with to become FHA certified. This important letter focused upon the need to revise requirements relating to:  (1) delinquent assessments; (2) the project certification; (3) owner-occupancy; and (4) commercial space.   

HUD continues to promise members of Congress and the larger housing industry (including Community Associations Institute) that we can soon expect changes to the FHA certification requirements.  Since these promises have seemingly been going on for months and condominium sales continue to be tepid at best, I have one thing to say:  Come on HUD - it's time to wake up and smell the coffee!   

 

 

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HOA Records Bill - Start Preparing Now to Comply! Blog Entry #6

Charges for Assembling, Producing and Copying Records

Yesterday I blogged that Governor Hickenlooper had signed the HOA records bill (“HB 1237”) into law. In order to be prepared to comply with the new law when it goes into effect on January 1, 2013, we are recommending that managers, management companies and HOA boards familiarize themselves with the requirements of the new law and to begin preparing now to comply.

For those of you who have been following my blog series which outlines the requirements, of HB 1237, you know we have covered: (1) records which HOAs will be required to maintain and produce to owners upon request; (2) records which may be withheld from production to owners; (3) records which must be withheld from production to owners; (4) restrictions which owners in HOAs must follow when utilizing membership lists; and (5) procedures which HOAs will be permitted to utilize in obtaining and processing records requests from owners.

 

Today I am going to cover what HOAs may charge, beginning on January 1st, for assembling, producing and copying records. Here’s what you need to know:

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HOA Records Bill Just Signed Into Law!

Just moments ago, Governor Hickenlooper signed the HOA records bill ("HB 1237") into law.  The bill will become effective on January 1, 2013.  As a result, there's no time like the present for managers, management companies and HOA boards to become familiar with the requirements of the new law and to begin preparing to comply on the 1st of the year. 

Check out this blog entry to learn more about:  (1)  records which HOAs will be required to maintain and to produce to owners upon request; (2) records which may be withheld from production to owners; (3) records which must be withheld from production to owners; (4) restrictions which owners in HOAs must follow when utilizing membership lists; and (5) procedures which HOAs will be permitted to utilize in obtaining and processing records requests from owners. 

Important Note:  Since HB 1237 does not go into effect until January 1, 2013, HOAs should continue to follow the current law and requirements of their Records Inspection Policy until the 1st of the year.  If your HOA obtains a records request prior to January 1st and you are unclear on the requirements of the current law, please consult with legal counsel for guidance.

Tomorrow I will be blogging on what HOAs will be permitted to charge owners for assembling, producing and copying records under the new law.  Also, continue to stay tuned to this blog for more information and tips on complying with HB 1237!

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HOA Records Bill - Start Preparing Now to Comply! Blog Entry #5

Procedures for Requesting HOA Records

As we prepare managers, management companies and HOA boards to comply with the HOA records bill (“HB 1237”) when it signed into law and becomes effective on January 1, 2013, we have covered: (1) records which must be maintained by HOAs and produced to owners upon request; (2) records that may be withheld from production to owners; (3) records which must be withheld from production to owners; and (4) restrictions which members of HOAs must follow when utilizing membership lists

Today we are going to cover procedures which HOAs will be permitted to utilize in obtaining and processing record requests from owners. Here’s what you need to know: 

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HOA Records Bill - Start Preparing Now to Comply! Blog Entry #4

Use of Membership Lists

HB 1237, the HOA records bill, has not yet been signed into law by Governor Hickenlooper. However, we expect that to happen in the very near future. Since the new law will ultimately go into effect on January 1st, we are posting a series of blog entries on what managers, management companies and HOA boards need to do to prepare to comply with the new law. Here’s what we have covered thus far:

 

  1. HOA records which must be maintained by the HOA and produced to owners upon request;
  2. HOA records which may be withheld from production to owners; and
  3. HOA records which must be withheld from production to owners

Today we are going to cover the restrictions on members relating to the use of a membership list they obtain from their HOA. While this provision mirrors current law, it’s worth a reminder. Here’s what you need to know:

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HOA Records Bill - Start Preparing Now to Comply! Blog Entry #3

HOA Records Which Must Be Withheld from Production

As we continue on our journey to prepare managers, management companies and HOA boards to comply with the HOA records bill (“HB 1237”) which will become effective on January 1, 2013, let’s review what we have covered thus far. In our first blog entry, we covered the records that HOAs will be required to maintain and produce to owners upon request. In our second blog entry, we covered the records that HOAs may withhold from inspection and copying by owners. Today we will cover the small category or records which HOAs are required to withhold from production and inspection by owners. 

The following records maintained by an HOA are not subject to inspection and copying, and must be withheld, to the extent they are or concern:

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HOA Records Bill - Start Preparing Now to Comply! Blog Entry #2

HOA Records Which May Be Withheld From Production

Last Friday, House Bill 1237 (“HB 1237”) was sent to Governor Hickenlooper for action. As we have noted in previous blog postings, given the bipartisan support for the bill, we fully expect HB 1237 to be signed into law. While the new law will not go into effect until January 1, 2013, now is the time for managers, management companies and HOA board members to get acquainted with the requirements of the new law and to begin preparing to comply with them by the 1st of the year. 

I began a short series of blog entries last Thursday to bring everyone up-to-speed on the requirements of HB 1237. The first blog entry provided a list of the records that every HOA will be required to maintain and provide to owners upon request. This blog entry will cover records which associations may withhold from producing to owners.

 

The following records maintained by an HOA may be withheld from inspection and copying to the extent they are or concern:

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HOA Records Bill: Start Preparing Now to Comply!

HOA Records Which Must Be Maintained and Produced

House Bill 1237 (“HB 1237”), the HOA records bill, has been prepared to be sent to Governor Hickenlooper for action. Based upon the bipartisan support the bill has enjoyed, we fully expect the Governor to sign HB 1237 into law. Once that happens, the bill will become effective on January 1, 2013. 

In addition to the advice Suzanne Leff gave in her blog on Monday, this short series of blog entries will provide guidance to managers, management companies and HOA board members on what you need to know to be prepared to comply with the new law. 

 

Beginning on January 1st, here is a list of the records which HB 1237 requires associations to maintain and produce to owners upon request:

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For the Record ... Effective Records Policies Start Now

With the passage of HB 12-1237 during the final hours of the 2012 legislative session last week, associations moved one step closer to new requirements concerning the official records that they must make available to owners upon request. We fully expect this bill to clear the final hurdle on its way to becoming law. Once HB 12-1237 is signed into law by Governor Hickenlooper, associations will have until January 1, 2013, to implement new records policies and practices.

It's not too early for associations to start reviewing their mandatory inspection and copying of records policies and making necessary updates before the effective date of HB 12-1237. All associations should have clear policies that do the following:  

  1. Ensure availability of all documentation expressly declared a "record" by statute plus any additional records defined in an association's governing documents
  2. Exclude specific documents from owner review

The biggest change most associations will make to their policies involves the removal of any requirement that owners state a "proper purpose" before getting access to records. Under HB 12-1237, associations must maintain certain records, and owners are entitled to access that information. Associations can help minimize the impact of owner requests for records on other association business by adopting clear policies, keeping records up to date, and making documents easily accessible.

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HOA Records Bill Headed to Governor Hickenlooper for Action!

Following an implosion in the House last night over legislation on civil unions that ultimately killed over 30 other bills, CAI's Colorado Legislative Action Committee ("CLAC") became concerned about whether time would run out on this last day of the legislative session to take up the the HOA records bill - HB 1237.  With the sands in the hourglass running low, we are pleased to report that the House has just concurred with the Senate amendments to HB 1237 and voted to repass the bill!  That means HB 1237 will be prepared and sent over to Governor Hickenlooper for action.  Since the bill was unanimously passed by the House and Senate on 3rd reading and is not controversial in nature, we expect Governor Hickenlooper to sign HB 1237 into law which will become effective on January 1, 2013. 

CLAC will be partnering with the Rocky Mountain and Southern Colorado Chapters of CAI to present classes on the new law.  Managers, management company representatives and boards of HOAs will want to attend these classes to be prepared to comply with HB 1237 by the first of the year.  Keep an eye on this blog and the Rocky Mountain and Southern Colorado Chapter websites for information on these classes as they are scheduled. 

We will also be providing a synopsis of HB 1237 on this blog in the near future!

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HOA Records Bill Passes Senate on 2nd Reading

After getting bogged down on the Senate calender as we approach the end of the legislative session next week, House Bill 1237 (the HOA records bill) was just heard this afternoon and passed by the Senate on second reading.  HB 1237 is expected to be heard by the Senate on 3rd reading as early as tomorrow morning.  The bill was amended in the Senate today to:

1.  Clarify the provision of the bill addressing records relating to actions taken outside of a board meeting;

2.  Clarify that email addresses of board members must be produced to owners upon request;

3.  Clarify the ability of owners to use a normal records request to obtain basic records from the association - even if there is pending or threatened litigation.  However, attorney client privileged documents, documents which fall under the attorney work product doctrine and documents relating to executive session are still protected from production;

4.  Clarify that contracts for work performed within the "immediate preceding 2 years" must be produced upon request.  However, contracts that are under negotation are not required to be produced to owners.

As a side note, some folks have speculated that HB 1237 was not taken up by the Senate earlier because of substantive concerns with the bill. Some folks have even speculated that the bill would likely be killed in the Senate.  While there have been some amendments in the Senate to clean-up provisions of the bill, HB 1237 has enjoyed bipartisan support in both the House and Senate.   

Once HB 1237 has been passed on 3rd reading by the Senate, it will be sent back to the House for concurrence.  We fully expect the House to approve the Senate amendments and vote for final passage of the bill.  HB 1237 will then be sent to Governor Hickenlooper to be signed into law. 

We will continue to provide you with important updates on the bill as it proceeds through the final phases of the legislative process.  Once the bill has been signed into law, we will provide you with comprehensive information on steps homeowners' associations, managers and management companies should take to comply with the new law which will go into effect on January 1, 2013. 

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Congressman Perlmutter Weighs in On Onerous FHA Certification Requirements!

Yesterday our own Congressman from Colorado, Ed Perlmutter (D, 7th District), sent an outstanding letter to Carol Galante (Acting Federal Housing Commissioner and Assistant Secretary for Housing with HUD) addressing some very real problems with the current FHA certification requirements.  Congressman Perlmutter called on Acting Commissioner Galante to revisit the FHA certification requirements relating to:

" ● No more than 15 percent of the units in a development may be 30 days or more delinquent on their association assessments, including REO

● Extending the certification approval beyond two years

● Clarifying the mandatory association legal certification and lowering the penalty below $1 million and 30 years in prison

● Denial of FHA-insured loan for units in buildings with more than 25 percent commercial space

● Requiring an owner occupancy rate of 50 percent, including REO."

CAI's Colorado Legislative Action Committee ("CLAC") met with the Congressman earlier this year to discuss our concerns that the current FHA certification requirements are making it extremely difficult for condomiminium associations to obtain project approval from HUD which has chilled the sale of condominium units in Colorado.  CLAC's ongoing efforts were assisted by communications to the Congressman's staff by Aaron Acker, the HOA Information Officer for Colorado. 

As a member of the powerful House Financial Services Committee, Congressman Perlmutter's call on Acting Commissioner Galante to act will be extremely helpful in CAI's efforts to make FHA certification of condominium projects more reasonably obtainable. 

Please join CLAC in thanking Congressman Perlmutter for his outstanding efforts on this matter by emailing him with your thanks!

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CAI National Believes FHA Action on Condos, Transfer Fees in Pipeline

Here’s the latest from CAI National on expected revisions to the FHA certification requirements for condominium associations: “The Federal Housing Administration (FHA) is likely to take action in the coming months that will affect community associations. FHA is preparing new policies for condominium project approvals and will soon release guidelines on the use of transfer fees by community associations.

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HOA Industry Can't Afford to Be Tone Deaf

As Chair of CAI’s Colorado Legislative Action Committee (“CLAC”), last week I participated on a legislative update panel at the CAI Rocky Mountain Chapter Spring Showcase. While the session addressed the status of manager licensure in Colorado, the main focus of the discussions were on the perception of the HOA industry by legislators, their constituents, regulators and special interest groups and what that means for the industry in the future on the legislative and regulatory front. 

The panel discussion began with a presentation by Aaron Acker, the HOA Information Officer, who noted that the number of complaints being lodged with his office have been increasing this year. Mr. Acker reported that while the calls are generally tracking the categories of complaints outlined in the 2011 Annual Report of the HOA Information and Resource Center, he is seeing a new trend in complaints relating to HOA law firms with an emphasis on how some firms are utilizing the foreclosure remedy.

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HB 1237 Unanimously Approved by the Senate Local Government Committee

Just minutes ago, the Senate Local Government Committee unanimously approved a slightly amended version of House Bill 12-1237 ("HB 1237").  As you know, HB 1237 amends the association records provision of CCIOA to:  (1) make it clear what records must be maintained and produced to homeowners; (2) specifically list the types of records which may be withheld from production; and (3) eliminate the requirement that owners must state a "proper purpose" prior to being permitted to inspect records. The amendments to the bill are housekeeping in nature and simply tighten up language in the bill.   

On a 5 to 0 vote, the Committee approved the bill with a favorable recommendation to the entire Senate.  The bill will now be placed on the Consent Calender to soon be considered by the full Senate.  We fully expect the bill to proceed through the Senate, return to the House for concurrence and ultimately be signed into law by Governor Hickenlooper. 

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FHFA Final Rule on Private Transfer Fees Carves Out HOAs!

The Federal Housing Finance Agency (FHFA) has published a Final Rule in the Federal Register that limits the ability of Fannie Mae, Freddie Mac and the Federal Home Loan Banks to deal in mortgages on properties that are encumbered by private transfer fee covenants.  

A News Release from FHFA announced the outstanding news that "The final rule excludes private transfer fees paid to homeowner associations, condominiums, cooperatives, and certain tax-exempt organizations that use private transfer fee proceeds to benefit the property."  This Final Rule has been a long time coming and is a victory for CAI National which worked hard to ensure common interest communities were excluded from the limitations.

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CLAC Update on Status of Manager/Management Company Regulation

The Community Associations Institute’s (CAI) - Colorado Legislative Action Committee (CLAC) has been carefully reviewing DORA’s 2012 Sunrise Review: Common Interest Community Association Managers (Sunrise Review). For those of you who have read the Sunrise Review, you know that DORA ultimately recommended the regulation of management companies.      

The CLAC feels that DORA’s recommendation to regulate management companies will not provide protection to all Coloradoans living in homeowners’ associations. DORA’s conclusion that, “For the most part, community associations contract with management companies, not individual community managers” does not accurately reflect the fact that many associations around Colorado retain the services of managers who are not affiliated with a management company.

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Communication from CLAC on DORA Sunrise Review

This morning the Colorado Department of Regulatory Agencies (DORA) published the Sunrise Review on whether the licensure of community association managers in Colorado is necessary. The Sunrise Review Application submitted by CAI’s Colorado Legislative Action Committee (“CLAC”) recommended the licensure of individual community association managers. 

The analysis in the Sunrise Review focused largely on whether unregulated community association managers pose potential harm to the residents living in community associations and the financial costs associated with potential regulation. The categories of “harm” outlined in the report include: 

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DORA Recommends Management Company Regulation

The Colorado Department of Regulatory Agencies ("DORA") has just published the Sunrise Review on whether the licensure of community association managers is necessary.  The ultimate recommendation is that management companies should be regulated. 

Stay tuned for a communication from CAI's Colorado Legislative Action Committee and details on DORA's recommendation.

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HOA Records Bill Sails Through the House

This morning, the Colorado House of Representatives on a 63 to 0 vote passed House Bill 12-1237 ("HB 1237") on 3rd reading. The bill will now be sent to the Senate for consideration. HB 1237 addresses the retention and production of HOA records.

The bill is intended to clarify: (1) what exactly are records of the association; (2) what records must be retained by associations: (3) what records must be produced to owners upon request; and (4) what records are exempted from production. In addition to these clarifying provisions, HB 1237 disposes of the requirement that owners provide a "proper purpose" prior to being permitted to inspect and obtain copies of records.

We will provide you with important updates on HB 1237 as it proceeds through the Senate.

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Roofing Contractor Bill Clears the Senate and Heads to the House

Today, Senate Bill 12-038 ("SB 38") was passed by the Senate on 3rd reading and will soon be headed to the House for consideration.  As I mentioned in a blog posting yesterday, SB 38 is a bill that is intended to provide protections from unscrupulous roofing contractors. 

Prior to passage on 3rd reading, the Senate amended SB 38 to make it clear that HOAs do not fall under the definition of "roofing contractor." The bill was also amended to ensure that HOAs with maintenance, repair and replacement responsibilities for roofs fall under the protections of the bill.   

We will provide you with important updates on the bill as it is considered by the House.  As always, you can count on us to keep you updated on the latest news relating to HOA legislative and regulatory issues! 

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HOA Records Bill Passes the Colorado House on 2nd Reading

This morning, an amended version of House Bill 12-1237 (“HB 1237”), sponsored by Representative Angela Williams and supported by CAI’s Colorado Legislative Action Committee, was passed by the Colorado House on second reading. The bill will soon be heard on 3rd reading by the full House and is expected to be passed and sent to the Senate for consideration. Senator Ted Harvey, a Republican from Highlands Ranch, has kindly agreed to sponsor the bill in the Senate. 

 

HB 1237 was highlighted and received positive press yesterday in the Denver Post. The bill addresses the retention and production of HOA records. The bill is intended to clarify: (1) what exactly are records of the association; (2) what records must be retained by associations: (3) what records must be produced to owners upon request; and (4) what records are exempted from production.  In addition to these clarifying provisions, HB 1237 disposes of the requirement that owners provide a “proper purpose” prior to being permitted to inspect and obtain copies of records. 

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Roofing Contractor Bill Amended to Protect HOAs

The Colorado Senate this morning amended Senate Bill 12-038 (“SB 38”) to exclude HOAs from the definition of “roofing contractor” and to provide HOAs with the protections provided under the bill.

SB 38, which is intended to provide protections from unscrupulous roofing contractors, requires “residential roofing contractors” to sign a written contract with customers that includes among other things: 

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House Bill 1237 Gaining Momentum

This morning the Denver Post published an article about House Bill 1237, the bill intended to clarify records disclosure requirements for homeowners associations.  Suzanne Leff and Molly Foley-Healy have previously discussed the substance of House Bill 1237, and we are pleased to see legislation that will help associations with everyday governance.

Many of the problems we address are caused by misinterpretation and misunderstanding of applicable law by laymen.  When the law is interpreted in a variety of ways by industry professionals, it's time to fix that law.  As always, check www.cohoalaw.com and subscribe to our updates using the link to the left to follow the progress of House Bill 1237 and other state and federal legislation that impacts associations. 

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HUD Files Rule Banning Seller Payment of Assessments at Closing

CAI National made the following announcement regarding a HUD ban on sellers paying assessments at closing:

 "The U.S. Department of Housing and Urban Development has acted to ban the practice of sellers agreeing to pay a set amount of association assessments for a buyer when closing on a FHA-insured mortgage. The ban is included in a proposed rule limiting concessions sellers may offer buyers to complete a sale.

In announcing the rule, HUD emphasized the need to limit risks to the FHA from borrowers whose homeownership costs have been paid by another party. The proposed rule explains that HUD’s views on seller concessions such as paying for up to a year’s worth of association assessments have changed. The Department now views these payments as inducements for a buyer to purchase a home, which increases risk of borrower default. By limiting the amount of seller concessions at closing, HUD is seeking to ensure that only those borrowers with a demonstrated ability to pay closing costs and repay all mortgage obligations qualify for FHA-insured mortgages.

HUD has established a 30-day public review and comment period for the proposed seller concession rule, which may be viewed here."

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Concerns Over HOA Accountability in Colorado Crosses Party Lines

Yesterday I attended and testified at a hearing before the House Local Government Committee on House Bill 12-1237 (“HB 1237”) relating to the production of association records to homeowners. While an amended version of HB 1237 was reported out of Committee and seems to be on its way to passage in the Colorado House of Representatives, that is not what really caught my attention. 

What made me sit up and take notice were the comments made by Representative Balmer when he made a motion to refer the bill out of Committee to the full House with an “extremely” favorable recommendation. Representative Balmer is a Republican from Centennial and as a general rule Republicans do not favor regulation. However, when it comes to HOA legislation that has not been the case. 

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HOA Records Bill Unanimously Approved by Committee: Future Legislation Foreshadowed?

House Bill 12-1237 passed out of the House Local Government Committee on a 9-0 vote this afternoon. The Committee adopted an amendment to the original bill language that does the following:

  • Excludes architect plans from documents that an association must disclose
  • Changes the tax return retention period from 10 years to 7 years to conform to federal guidelines
  • Includes non-confidential construction defect settlement information as part of association records
  • Mandates the non-disclosure of certain documents, such as personnel and medical records, rather than leaving this decision to the discretion of associations
  • Reintroduces existing statutory language that prohibits the use of membership lists for commercial purposes

The Committee heard testimony from homeowners, homebuilders, and community association professionals, including attorney Molly Foley-Healy. Those testifying spoke favorably about the bill and highlighted benefits of this piece of legislation.

As the Committee members voted on the amendments and the bill, Rep. David Balmer (R-Centennial) expressed his strong support for the HOA records bill as an initial step toward regulating those community associations that make association business “intentionally opaque.” He invited the bill’s sponsor, Rep. Angela Williams (D-Denver), to work with him on additional legislation that puts “teeth” into the Colorado Common Interest Ownership Act ("CCIOA").These comments, coupled with Sen. Morgan Carroll's recent comments in The Denver Post signal more legislation on the way for Colorado HOAs - and send a clear message to HOAs about the importance of complying with CCIOA. 

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Homeowner's Insurance Bill Killed in House Local Government Committee

On January 16th, I blogged on House Bill 1057 which would have required the Insurance Commissioner to adopt the following rules relating to homeowner’s insurance: (1) the criteria and requirements for estimates of replacement value of insured property; and (2) educational requirements for insurance producers related to homeowner’s insurance – including estimating replacement values.  The bill would also have required homeowner’s insurance policies to include “. . . coverage for additional living expenses. This coverage must be available for a period of twenty-four months. . .” 

While at the time I didn't give HB 1057 much of a shot at making it through the legisaltive process - stranger things have happened.  However, the House Committee on Local Government heard the bill and voted to "postpone indefinitely."  In legislative speak, that means the bill is dead for the session. 

 

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CBS News 4 Covers HOA Records Bill

Yesterday, CBS News 4 ran a segment on the 6:00 pm news addressing the failure of HOAs to produce records to owners as highlighted in the 2011 Annual Report of the HOA Information and Resource Center. While we can always count on news outlets to run a sensationalized “HOA horror story,” the good news is the story they recounted ended with the HOA ultimately doing the right thing by producing records. 

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Denver Post Covers Manager Regulation

This morning, the Denver Post ran a front page story entitled HOA house may get put in orderWhile the story opens with a sensationalized account of a foreclosure which was not tied to manager misconduct, the story recognizes CAI as the leader in promoting the competent management of community associations in Colorado. As Chris Pacetti was quoted as saying, “We are trying to establish a level of professionalism and performance in the industry.” The article further highlights the need for criminal background checks, training and licensure.   

Brian Tobias, the Senior Policy Analyst at the Colorado Department of Regulatory Agencies (“DORA”) who is conducting the Sunrise review, boiled down the review process as follows: “A key question that the state is asking is whether community association managers cause harm, and, if so, would regulation fix it.” 

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Association Records: Navigating the Electronic "Paper" Trail

This at least should be a rule through the letter-writing world: that no angry letter be posted till four-and-twenty hours will have elapsed since it was written. ~ Anthony Trollope

In my life outside of community association law practice, I volunteer with Denver Public Schools (“DPS”). On more than one occasion, my work with DPS, and in other volunteer roles, has allowed me to better relate to the challenges that association board members experience in their roles as community leaders – whether it’s the time commitment, strong emotions, opposing views, an unclear governance model, or thousands of e-mails flooding my inbox, I’ve experienced it.

Most recently, I served as co-chair for a large community committee that participated in a year-long process of monthly, and sometimes weekly, meetings. At the committee’s inception, a member of the general public submitted a Colorado Open Records Act (“CORA”) request to DPS, asking for all documents related to the committee’s work. DPS administration informed me and the rest of the steering committee of this CORA request to make us aware that the contents of our e-mails would get released to the constituent.

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Bill Introduced to Address Association Records

Today House Bill 12-1237 (“HB 1237”) was introduced in the Colorado General Assembly to address the issue of the retention and production of community association records. CAI’s Colorado Legislative Action Committee (“CLAC”) worked with Representative Angela Williams to draft this bill which seeks to provide clarity to management, executive boards and owners on exactly what records must be retained by an association and produced to owners upon request. 

Given the fact that the current records provision of the Colorado Common Interest Ownership Act (“CCIOA”), C.R.S. 38-33.3-317, is the provision that received the most complaints by the HOA Information Officer – introduction of this bill is very timely.

 

HB 1237 is substantially based upon revisions made to a similar provision of the Uniform Common Interest Ownership Act (“UCIOA”) by the National Council of Commissioners on Uniform State Laws. UCIOA is the model act which our CCIOA is based upon. In addition to substantially adopting the revisions made to UCIOA, the bill also inserts key provisions of the Colorado Revised Nonprofit Corporation Act into CCIOA. 

 

Here are some highlights of HB 1237:

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2011 Annual Report Of The HOA Information And Resource Center

In response to a Colorado Open Records Act (“CORA”) request, I was provided with the 2011 Annual Report of the HOA Information and Resource Center. This is the long-awaited report that focuses on the activities of the HOA Information and Resource Center (the “Office”) including a synopsis of inquiries and complaints. Below I have outlined just a few interesting points made in the Annual Report. However, to be clear, these are snippets of information and I highly recommend that you review the entire Report for context and a full understanding of the data and related issues. 

Here are just a few of the interesting points made in the Annual Report: 

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Three Cheers for the Western Tiger Salamander!

In an election year that could easily be plagued by partisan politics and the introduction of divisive legislation, I’m taking my hat off to Representative Angela Williams for working with school children in her district by introducing House Bill 11-1147 to make the Western Tiger Salamander the state amphibian of Colorado. Not only will her young constituents have an up close and personal view of how a bill becomes law, they will also learn firsthand the importance of civic activism.

 

 

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Community Association Manager Licensure in Colorado: A Fait Accompli?

As Chair of CAI's Colorado Legislative Action Committee ("CLAC"), I write a monthly column for  Common Interests magazine which is published by the Rocky Mountain Chapter of CAI.  In Capitol Chronicles this month, I addressed:  (1) the background related to the Sunrise Review Application submitted to the Colorado Department of Regulatory Agencies ("DORA") to investigate the necessity of regulating community association managers; (2) the sunrise review process and timeline; (3) the potential outcomes of the sunrise review; and (4) the next steps for CLAC.  If you are interested in what's happening with manager regulation in Colorado - this article will update you on the latest information available. 

 

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CAI National Introduces Us To the CFPB

Meet the CFPB

In 2010, Congress created the Consumer Financial Protection Bureau (CFPB) to serve as the nation’s “cop on the beat” to protect consumers from harmful financial products. Officially opened for business on July 22, 2011, the CFPB is now responsible for enforcing most federal financial consumer protection laws.

CAI’s members have a keen interest in the development of CFPB’s rules and regulations that could affect community associations. As a new federal agency, the CFPB is still working to define its approach to protecting consumers from abusive financial products and helping to ensure consumers have the right information to choose the financial products and services that will best meet their needs. While the CFPB’s authority extends from checking accounts to credit cards to payday loans, it also has significant authority over federal housing policy, mortgage lending standards and the home buying process.

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Homeowner's Insurance Bill Introduced in the Colorado House

As I have been reviewing legislation that was introduced during the first week of the legislative session here in Colorado, House Bill 12-1057 (“HB 1057”) caught my attention. The bill, as introduced by Representative Claire Levy, seems to be aimed at ensuring that folks carry adequate homeowner’s insurance. 

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Synopsis of Data on HOA Complaints to the HOA Information Office

As I mentioned this morning in an earlier blog posting, data on complaints received by the HOA Information Office during 2011 was published in the Colorado Real Estate News. Again, to be clear, the information published was a synopsis of complaint information and is not the actual report which the HOA Information Officer is soon expected to deliver to the Director of the Division of Real Estate.  However, the information is published by the Department of Regulatory Agencies ("DORA") and here are some items I found particularly interesting:

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HOA Information and Resource Center Complaint Information is Published!

Many of us in the HOA industry in Colorado have been anxiously awaiting publication of information regarding the report from the HOA Information Officer to the Director of the Division of Real Estate on complaints received relating to HOAs.  A synopsis of findings of the HOA Information Center on complaints was just published in the Colorado Real Estate News.   However, to be clear, this is not the actual report. 

We'll provide you with highlights on the data contained in the summary soon.  Stay tuned!

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Bill Introduced to Address Open Meetings for Residential Nonprofit Corporations

Last year during the 2011 legislative session, Representative Cindy Acree was successful in passing House Bill 11-1110 to address open meetings and transparency in governance for “Residential Nonprofit Corporations.” As originally drafted, the bill would have included homeowners’ associations (“HOAs”) that were similarly regulated under the Colorado Common Interest Ownership Act (“CCIOA”). Since this wasn’t the intent of the bill, Representative Acree specifically excluded HOAs from the definition of "Residential Nonprofit Corporations" and focused upon independent senior living facilities. 

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Senate Bill 12-030 Requires Assignment of Liens Be Produced Prior to Redemption

The 2012 legislative session kicked-off today in Colorado! At this early stage in the session, Senate Bill 12-030 (“SB 030”) was introduced to clean-up administrative provisions of the public trustee foreclosure statute. 

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2012 Colorado Legislative Session Kicks Off Wednesday!

It’s the most wonderful time of the year . . . at least for political geeks like me! This coming Wednesday (January 11th) the Colorado General Assembly will officially convene for the 2012 legislative session. 

 

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CAI Industry Update Breakfast: Shedding Light on Manager Licensure and HOA Complaints

The Rocky Mountain Chapter of CAI is hosting a CAI Industry Update Breakfast on January 20, 2012.  Here's what you need to know about the event: 

 

"On November 4th, CAI’s Colorado Legislative Action Committee filed a Sunrise Application with the Colorado Department of Regulatory Agencies (“DORA”) to determine whether the licensure of community association managers is necessary.  Since that time, the CAI rumor mill has been working overtime!  Join our panel to get the facts about the Sunrise Application, why it was filed, what happens during the sunrise review process, when we can expect a recommendation from DORA and what happens next.  We’ll also discuss the eagerly anticipated report submitted by Aaron Acker, the HOA Information Officer, to the Director of the Division of Real Estate on complaints his department received about HOAs during 2011.  This report could well be a catalyst for legislative and regulatory initiatives in Colorado during 2012 and into the future.  We’ll also have the latest news from the State Capitol on HOA bills you need to know about.

 

Please join our panel consisting of Molly Foley-Healy, Dee Wolfe and Chuck Montera for this Industry Update Breakfast.

  

Molly Foley-Healy, Esq. 

Molly is Chair of CAI’s Colorado Legislative Action Committee and is Special Counsel with the law firm of Winzenburg, Leff, Purvis & Payne. 

Dee Wolfe, CMCA®, PCAM®

Dee is the Co-Chair of the Colorado Legislative Action Committee’s Manager Licensure Taskforce and is Senior Vice President of Colorado Association Services, AAMC®.

Chuck Montera, Account Manager

Chuck is the Public Relations Professional with Sigler Communications, Inc. responsible for assisting the Manager Licensure Taskforce with the public relations aspect of the Sunrise Application process." 

 

Date: January 20, 2012

Time: 7:30 am to 9:00 am

Location: Courtyard Marriott, Denver – at Colorado Boulevard & Florida

Cost: $15.00 for CAI Members; $20.00 for Non-Members

Register: To register for this event, click here.

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CAI Reports Congress to Increase Fees on Fannie Mae, Freddie Mac, and FHA

As Congress continues to play politics with extending the payroll tax deduction into 2012, Community Associations Institute ("CAI") reports that an increase in fees on Fannie Mae, Freddie Mac and FHA seems to be an inevitable part of any deal ultimately reached.  CAI National published the following report: 

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Increased HOA Registration Fee for 2012 In Effect

In my November 30th blog posting, I reminded HOA boards and managers to put the renewal of their HOA’s registration with the Colorado Division of Real Estate (“Division”) on their 2012 To Do List. In that posting, I noted that we suspected the registration fee would be significantly increased to cover the costs of operating the program.

The Division posted on the HOA Information and Resource Center webpage that the registration fee has been increased to $43.00. In addition, the processing fee will be increased to just below $1.50. Pursuant to statute, the registration fee cannot exceed a $50.00 statutory cap and must be set at a level that estimates the direct and indirect costs anticipated to operate the HOA Information and Resource Center. Frankly, the current fee is more in alignment with where we thought the original fee would be set. 

 

As a reminder, your initial registration is good for a period of one year. That means, according to the HOA Frequently Asked Questions published by the HOA Information and Resource Center, you must renew the registration for your HOA within one calendar year of the initial registration date. 

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ALERT from CAI's Colorado Legislative Action Committee: Protect Your Association's Priority Lien Rights in Colorado

Andrew Fortin, CAI National’s Vice President of Government & Public Affairs, has provided CLAC with the following important ALERT for CAI members in Colorado: 

“CAI members in Colorado have reported that a mortgage company in that state is telling lenders that in order to obtain a mortgage for a home in a community association; the association must waive their priority assessment lien rights under Colorado Law. In justification for this requirement the mortgage company cites “VA, FHA and [Company name’s] internal company requirements.” CAI’s Government and Public Affairs Staff have reviewed FHA and VA requirements, discussed this matter with officials at FHA and examined FHA’s ongoing and active lending in the 19 states with priority assessment lien laws. We have concluded that there is no federal regulatory or statutory requirement that would require an association to waive its priority assessment lien rights under Colorado Law to obtain an FHA or VA backed mortgage. We are working with the CAI’s Colorado Legislative Action Committee to bring this issue to the attention of legislators.


At issue are provisions in the FHA Handbook (HUD Handbook 4150.1, Chapter 11) which prohibits the association from establishing a priority lien for assessments through its declaration and covenants. We believe that the mortgage company in question is using this subsection as a pre-text for abrogating Colorado’s Priority Lien Assessment. If your lender experiences issues related to this claim, CAI recommends that the lender demand the statutory citation and or regulatory citation for the requirement. We encourage you to report this to CAI’s Government Affairs Department at government@caionline.org with “Colorado Priority Lien” in the subject line. We will keep you posted on developments.”

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FHA Responds to CAI on Transfer Fees

On October 21st, I posted a blog entry informing you that FHA was contemplating a prohibition on deed-based transfer fees in order for a condominium association to qualify for FHA-insured loans.  In that same entry, I included a report from Community Associations Institute ("CAI") on the issue with a link to a letter to FHA requesting that they exercise caution and due diligence prior to taking such action.  CAI has received a response from FHA to this letter and has published the following communication:     

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CAI Reports That Leading Senator Chides FHA on Condos

In an ongoing effort to persuade the US Department of Housing and Urban Development ("HUD") that the FHA certification guidelines must be revised in a manner that takes very real industry concerns into consideration, Community Associations Institute ("CAI") made the following announcement regarding the actions of United States Senator Scott Brown:

"Massachusetts Senator Scott Brown has sent a strongly worded letter to the Secretary of Housing and Urban Development expressing concerns over the development and implementation of FHA’s condominium guidelines. The letter specifically addressed the concern over the recent actions by FHA to deny mortgage funding to associations with special assessments or loans for property improvements. Senator Brown also expressed confusion for an association in securing insurance versus fidelity bonds and ultimately called for the removal of the “invisible barrier” that seems to hinder a positive resolution between community associations and FHA. You can read the letter here.

This letter is another BIG victory for CAI and our members’ efforts to reform the current FHA criteria and rulemaking process. Senator Brown’s letter will certainly get the attention of FHA officials who have continued to implement flawed condominium underwriting criteria despite concerns expressed by CAI and condominium owners across the country. A big thank you goes to CAI’s Massachusetts LAC and CAI members, whose efforts, led by CAI member Stephen Marcus, helped secure this important letter of support for all condominium owners. This is an important development in CAI’s efforts to move FHA to adopt more rational and fair criteria."

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7 News Covers Manager Licensure Sunrise Application

Yesterday, 7 News provided coverage on the Sunrise Application that was submitted last Friday to the Colorado Department of Regulatory Agencies (“DORA”) to examine the need to license community association managers. 

Speaking out in support of manager licensure, Chris Pacetti who is the Chair of CAI’s Colorado Legislative Action Committee’s Manager Licensure Task Force, noted that “Anyone can operate as a homeowners’ association manager without any qualifications.” Dee Wolfe, Co-Chair of the Taskforce, stated that, “For most people, their home is their single biggest investment, so it’s doubly important to have a licensed association manager who is held to a higher standard.” 

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Manager Licensure Submitted Today for Sunrise Review

Members of Community Associations Institute ("CAI") are receiving notification today from the Rocky Mountain and Southern Colorado Chapters of CAI informing them that the Colorado Legislative Action Committee of CAI ("CLAC") has submitted a Sunrise Application to the Colorado Department of Regulatory Agencies ("DORA") to investigate the need for licensing community association managers in Colorado. Here's the communication that has been distributed to Rocky Mountain Chapter members from the Chapter President Brian TerHark:

 

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Washington Post Sheds Light on FHA Debacle

Kenneth R. Harney, a columnist for the Washington Post, on Friday published an illuminating column on the impact the new FHA guidelines are having on the condominium market. Mr. Harney characterized this chilling effect when he wrote: “This, in turn, has abruptly shut off loan money for would-be buyers and refinancers, forcing them to pursue conventional bank loans requiring much higher down payments – sometimes 20 percent higher compared with FHA’s 3.5% minimum – which they often cannot afford.” 

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CAI Cautions FHA on Transfer Fees, Calls for Waiver

As if the Federal Housing Administration hasn't done enough already to tank the market for condominium units in the United States, it seems they are now contemplating a prohibition on transfer fees in order for a condominium association to qualify for FHA-insured loans.  Here is a report from Community Associations Institute on the issue: 

"As part of a series of training sessions on the revised, Federal Housing Administration’s (FHA) condominium mortgage guidelines, FHA informally announced that it would be issuing new regulatory guidance to address the issue of deed-based transfer fees. FHA indicated that it would likely disqualify any condominium association with deed-based transfer fees from access to FHA-insured mortgages. This news comes as condominium associations across America are still reeling from the July 2011 FHA Guidance which imposed new and confusing underwriting guidelines that conflict with condominium business practices, state law and common sense. In response to this sudden announcement by FHA, CAI has dispatched a letter warning FHA of the dire consequences to the condominium market if it follows through on its announcement.

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Anticipating the 2012 Legislative Session for HOAs

Recently, I wrote an article that was published in the October 2011 edition of the CAI Rocky Mountain Chapter’s Common Interests magazineColorado HOAs: At a Legislative and Regulatory Crossroads focuses on the evolution of legislation in Colorado beginning with passage of Senate Bill 100 back in 2005 through the 2011 legislative session. 

In my opinion, based upon the legislative trends in Colorado and the anticipated report from the Division of Real Estate which will be published in December summarizing complaints received about HOAs, there is no question we are at a legislative and regulatory crossroads in Colorado. Lawyers like me can pontificate on what we expect to see during the 2012 legislative session. However, the fact is that not one of us has a crystal ball. Instead, we will have to wait and see what the legislative and regulatory fall out will be from the Division’s report. In addition, there’s little doubt that HOAs will be a legislative focus in what promises to be a highly charged session rife with election year politics.

 

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CAI Reports FHA Backing Away From Management Company Insurance Mandate

According to Community Associations Institute ("CAI"), the Federal Housing Administration is evidently backing off a new requirement that management companies carry a fidelity bond on any condominium association they manage that would cover an amount equal to the association's budget and reserves.  Here is what CAI is reporting: 

"Thanks to pressure from CAI members across the country, the Federal Housing Administration (FHA) indicated that it will revise a controversial regulatory mandate that would require management companies to carry a fidelity bond if they managed a condominium association. In June, FHA released new guidelines for its condominium mortgage insurance program. The guidelines set standards that condominium associations must meet in order for any potential buyer to qualify for a FHA-backed mortgage. As FHA accounts for nearly one in three condominium mortgages, the guidelines have a significant impact on the marketability of condominiums.

 

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HUD Commits to Revisit Provisions of the FHA Project Certification

I just returned from an excellent training provided by the U.S. Department of Housing and Urban Development (“HUD”) on the new and revised requirements for FHA condominium project approval found in the Condominium Project Approval and Processing Guide.

The 800 pound guerilla in the room was the new Project Certification requirement. Beginning on August 31, 2011, any application for a new certification or recertification submitted to HUD for FHA approval requires the condominium association, or an agent of the association, to sign the Project Certification which says the following:

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CAI Engages House Committee on FHA Condo Program

 Here's an update from CAI National on CAI's lobbying efforts relating to FHA's role in establishing criteria for condominium associations to become approved for FHA-backed loans: 

"The House Financial Services Committee’s Subcommittee on Insurance, Housing and Community Opportunity hosted a hearing on September 8, examining the role of FHA in the mortgage markets. Acting FHA Commissioner Carol Galante testified to FHA’s role in the post crash housing market and noted process made by FHA in “improving” the condominium insurance process.  Her testimony stands in sharp contrast to the statement submitted to the Subcommittee by CAI. In that statement, CAI cites continued lack of transparency and outreach by FHA as an ongoing problem and the cause for implementation of criteria that “do not comport with association business operations, state law or common sense.” CAI and CAI member-led Mortgage Matters Teams met with key members of the Financial Services Committee during the August recess to pressure lawmakers to step up oversight and pressure FHA to amend or rescind its current flawed guidance. You can read CAI’s statement here."

 

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Important Communication from the Division of Real Estate on HOA Registration

On Wednesday, the Colorado Division of Real Estate distributed the following communication relating to HOA Registrations: 

“One of the purposes of HOA registration is to provide the Colorado consumers with basic information about HOA’s, including their physical address and contact information for the HOA. It is important to remember that when you register your HOA, you must provide the address for the HOA, even though it is a management company that is overseeing the HOA or that created the registration, the address that needs to be provided is the actual HOA address. You may use a range or a general street address for the HOA. Additionally, please make sure to read the “Attestation” when you are registering the HOA that states you attest under penalty of law that all the information is correct including the address. If the address you had entered does not reflect a physical address for the HOA, please update your registration with the appropriate information. You may update your information by logging in and going back into the profile to update then save it. The website address is: https://www.dora.state.co.us/pls/hoa/HOA.logon If you have further questions or comments please contact Cynthia Aguilar at 303-894-2292.”

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Do HOAs Need to Rethink Prohibitions on Displays Supporting Members of the Military?

Back in May, Lindsay Smith blogged on a story involving a couple in Louisiana who were displaying a banner in their yard supporting their son who is a Marine serving in Afghanistan. 

Timothy and Jodi Burr, the proud parents of the Marine, claim that a covenant of Gardens of Southgate Homeowners Association (“Association”) prohibits the placement of signs on lawns within public view. They also maintain that the Association is selectively enforcing this covenant since the Association has allegedly not taken enforcement action on “numerous signs throughout the neighborhood.” 

 

Since May, this story seems to have taken on a life of its own and has become extremely ugly. Evidently, the couple did not take down their banner and the Association has filed a lawsuit against them to force compliance. In addition to the issue of selective enforcement, the couple has contended that the Association has been unresponsive to their requests for a meeting to discuss this issue. 

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Positive Changes to FHA Guidelines on Commercial Space & Assessment Delinquencies

This week I have been blogging on recent changes made by HUD to the FHA guidelines which condominium associations must comply with to become FHA-certified. This certification is important since it enables purchasers of units in these associations to be eligible for FHA-backed loans which enhances the marketability of units.

Beneficial changes have been made in the Condominium Project Approval and Processing Guide (“Guide”) relating to the percentage of commercial space which may be present in a condominium project and the percentage of assessment delinquencies an association may have to be eligible for FHA-certification. Here’s what you need to know:

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HUD Approval of Some Leasing Restrictions Made Permanent

As I discussed fully in a blog posting on March 21, 2011, for a condominium association to obtain HUD certification for purchasers of units in that association to obtain FHA-backed loans, one of the requirements is that at least 50% of the units in the project must be owner-occupied. Simply put, that means associations must have a mechanism to regulate the rental of units. Ironically, HUD also had in place guidance that would have disqualified any association with rental restrictions in the association’s governing documents.

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Special Assessments Proving Problematic for FHA Approval

If you serve on the board of directors or are a manager of a condominium association, you know that obtaining approval from HUD for FHA-backed loans really enhances the ability of owners to sell their units in your community. 

As I mentioned in myJune 30th blog posting, HUD launched the new Condominium Project Approval and Processing Guide (“Guide”) which outlines the criteria that condo associations must comply with in order for these communities to be certified by HUD to be eligible for purchasers of units to obtain FHA-backed loans. One of the many items that HUD reviews when analyzing an association’s submission, is whether the association has levied a special assessment. Here is the provision of the Guide that addresses special assessments: 

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CAI Publishes Initial Analysis of New FHA Approval Guidelines

On June 30th, we announced in a blog posting that the U.S. Department of Housing and Urban Development (“HUD”) had just released the new Condominium Project Approval and Processing Guide (“Guide”). The Guide consolidates the processes and requirements that condominium associations must comply with in order to receive FHA certification. In addition, the Guide also outlines new and revised eligibility requirements for condominium associations.  

Community Associations Institute (“CAI”) has published an initial analysis of the revised requirements outlined in the Guide. In the coming days, we will be blogging on the pros and cons of some of the specific changes outlined in the CAI analysis, 

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Breaking News from HUD

The U.S. Department of Housing and Urban Development (“HUD”) has just released a new Mortgagee Letter launching the new Condominium Project Approval and Processing Guide (“Guide”) which addresses FHA approval of condominium associations. The Guide is intended to consolidate all of pertinent information and to reconcile some of the differing opinions provided by HUD.  In addition, HUD has published a matrix which briefly describes the policy requirements specified in the Guide with associated implementation dates. 

While we haven’t had an opportunity yet to review the Guide in detail, keep an eye out here next week for further information and updates.  

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HOA Information Officer Gives Synopsis of Complaints at CBA Course

Late last week, Aaron Acker and I co-presented a legislative update session at the Colorado Bar Association course Advanced HOA Issues: Communities in Distress. Aaron, the HOA Information Officer with the Colorado Division of Real Estate (“Division”), focused on the role of the Division relating to homeowners’ associations (“HOAs”) and provided a synopsis of the types of HOA-related complaints his office is receiving. Here’s an overview of what Aaron shared with the attendees:

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New ADA Pool Accessibility Standards: What HOAs Need to Know

We have been hearing a lot of buzz out in the HOA world about the new Americans with Disabilities Act (“ADA”) regulations relating to pool accessibility standards. Many associations are confused about whether these new standards apply to their communities, what exactly the pool accessibility standards require and when modifications to pools and spas must be made. For our HOA friends out there, here’s what you need to know:

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HOA Registration Clean-Up Bill Dead

At long last, today is the final day of the 2011 Colorado Legislative Session. All in all, it was a good session for HOAs in Colorado. Unfortunately, the HOA registration clean-up bill (“SB 253”) was derailed by the House Majority Leader at the 11th hour.

SB 253, backed by CAI’s Colorado Legislative Action Committee (“CLAC”), was introduced to clean-up and clarify provisions of HB 10-1278 which last year created the HOA Information and Resource Center and HOA Registration – both of which are under the auspices of the Colorado Division of Real Estate. As fully discussed in our April 21st blog posting, SB 253 was intended to provide clarity and protection for HOAs from unnecessary litigation and potential legal exposure relating to the statutorily flawed registration requirement. 

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HOA Registration Clean-up Bill Cleans Up House Committee Votes

The HOA registration clean-up bill (“SB11-253”) passed out of the House Economic Development and Business Affairs Committee on a unanimous vote this afternoon! The bill now moves to the House Floor, where it will hopefully get approved before the first regular session of the General Assembly adjourns on Wednesday, May 11th.

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Transfer Fee Bill Just Passed by House

On a 63 to 0 vote, the full House just passed the transfer fee bill ("SB 234") without amendments.  The bill will next be sent to Governor Hickenlooper for consideration.  We fully expect the Governor to sign SB 234 into law and are pleased to report the HOA exclusions are in the final version of the bill.  Check out our April 26th blog posting for more information on the HOA exclusions. 

In other news, the HOA registration clean-up bill ("SB 253") is scheduled to be heard before the House Economic and Business Development Committee this afternoon.  Assuming the bill garners sufficient Republican support to make it out of Committee, the bill should proceed quickly through the House.

As always, we will continue to provide you with important updates on these bills. 

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Transfer Fee Bill Sails Out of Committee

Yesterday, the transfer fee bill ("SB 234") was reported without amendments on a 10 to 0 vote out of the House Committee on Local Government to the full House for consideration.  Assuming SB 234 is passed on second and third readings in the House without amendment, it will then be sent to Governor Hickenlooper for consideration.

The good news is the HOA exclusions we outlined in our April 26th blog posting, have remained untouched.  At this point in the legislative process, we do not expect these important exclusions to come under attack.

In other news, the HOA registration clean-up bill ("SB 253") is expected to be formally introduced in the House as early as today.  We expect that SB 253 will be assigned to the House Committee on Local Government and scheduled for hearing early next week.  Since the General Assembly is slated to adjourn for the session on May 11th, we are keeping our fingers crossed that the bill makes it through the legislative process to Governor Hickenlooper's desk. 

We will continue to keep you updated on these important bills as the 2011 Colorado Legislative Session winds down. 

 

 

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Transfer Fee & HOA Registration Clean-Up Bills Headed to the House

With only 9 days left in the Colorado legislative session, two significant bills remain in play for HOAs in Colorado. 

The transfer fee bill (“SB 234”) was passed on 3rd reading Friday by the full Senate. While the bill has been significantly amended by the Senate, the HOA provisions we outlined in our April 26th blog posting remain in place. SB 234 is currently slated to be heard Wednesday by the House Committee on State Affairs. 

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HOA Registration Clean-Up Bill Clears Senate Judiciary Committee

Just minutes ago, the Senate Judiciary Committee on a 7 to 2 vote reported Senate Bill 11-253 (“SB 253”) with no amendments out of Committee to the full Senate for consideration. The purpose of the bill is to clean-up provisions of HB 10-1278 which last year created the HOA Information and Resource Center (“Center”) and the HOA Registration to fund the Center. To learn more about SB 253, check out our April 21st blog posting.

SB 253 could be considered on second reading by the full Senate as early as tomorrow. For the bill to proceed to the House for consideration, SB 253 must be passed by the Senate on second and third readings. We will continue to provide you with significant updates on the bill. 

 

 

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HOA Provisions Still Safe in Transfer Fee Bill

After giving stakeholders time to work through proposed amendments to Senate Bill 11-234 (“SB 234”), late last week the Senate Committee on Local Government (“Committee”) referred an amended version of the transfer fee bill to the full Senate for consideration. While SB 234 has not yet been placed on the Senate Calendar to be considered on second reading, we expect the Senate will take up the bill very soon. (For the bill to be sent to the House for consideration, the Senate must pass the bill on second and third readings.)

From the HOA perspective, the good news is the provisions we really care about have remained unchanged in SB 234. In fact, the HOA-specific provisions were not the subject of controversy during the Committee hearing. The following provisions remain excluded from the definition of “Transfer Fee Covenant” in the bill and are permitted to be charged:

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Late Status Bill Just Introduced to Clean-Up HOA Registration

Senate Bill 11-253 (“SB 253”), sponsored by Senator Morgan Carroll and Representative Angela Williams, was just introduced in the Colorado General Assembly. The purpose of the bill is to clean-up and clarify provisions of HB 10-1278 which last year created the HOA Information and Resource Center (“Center”) and the HOA Registration to fund the Center – both of which are under the auspices of the Colorado Division of Real Estate (“Division”).  

CAI’s Colorado Legislative Action Committee (“CLAC”) supports SB 253 and worked hard to get the legislation introduced. Here’s what you need to know about the bill:

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Senate Committee on Local Government Holds Hearing on Residential Transfer Bill

On Tuesday afternoon, the Senate Committee on Local Government (“Committee’) held a hearing on Senate Bill 11-234 (“SB 234”) – the residential transfer fee bill. As we noted in our April 7th blog posting, SB 234 currently prohibits the future recording of residential transfer fee covenants or liens which require payment of a transfer fee. The bill has several carve outs which include the fees management companies charge in relation to the conveyance of a unit and transfer fees for community associations which are present in a recorded document. 

The Colorado Bar Association, Land Title Association of Colorado, Colorado Mortgage Lenders Association and CAI’s Colorado Legislative Action Committee (“CLAC”) all testified in favor of the bill. These interest groups made the following consistent points:

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House Bill 1124 Signing Ceremony

Winzenburg, Leff, Purvis & Payne attorneys Molly Foley-Healy and Suzanne Leff attend the signing ceremony of House Bill 1124, addressing conflicts of interest.  Take advantage of our free conflicts of interest policy review!

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HB 1124 Signed Into Law - Take Advantage of Our Free Conflicts of Interest Policy Review!

Just a few minutes ago, Governor Hickenlooper signed House Bill 11-1124 (“HB 1124”) into law. As you know from recent blog postings, HB 1124 addresses the Conflicts of Interest Policy that community associations in Colorado are required to adopt. 

In particular, HB 1124 requires that a Conflicts of Interest Policy must contain the following provisions:

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HUD Publishes Frequently Asked Questions in Case of Government Shut Down

Frequently Asked Questions for FHA Clients during a Government Shutdown:

The following HUD/FHA Information Resources will be available during a government shutdown:

·HUD/FHA Resource Center: (800) 225-5342

·HUD/FHA National Servicing Center: (877) 622-8525

·HUD’s primary internet site:  http://www.hud.gov  (but will not be updated)

·The Resource Center FAQ site:  http://www.fhaoutreach.gov/FHAFAQ

HUD/FHA staff will not be available to respond to case specific questions.  All questions that cannot be answered by contract staff at the Resource Center and the NSC will be deferred until the government re-opens.

Please be aware that HUD Staff will not be available to process incoming mail during a government shutdown so business partners should suspend shipment of documents and approval packages during the term of the shutdown.  The following are examples of such documents:  Submission of FHA Test Cases, HRAP condominium approval packages, NAID requests, etc.  

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Transfer Fee Bill Just Introduced in Colorado General Assembly

Senate Bill 11-234 (“SB 234”), which was granted late bill status, has just been introduced in the Colorado Senate. After months of negotiations between stakeholders, SB 234 was introduced to address concerns relating to residential transfer fees, to protect equity in homes and to promote the sale of residential real estate. 

SB 234, as currently written, provides as follows: 

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Free Conflicts of Interest Policy Review!

As we announced in our blog posting earlier today, the Colorado Senate just passed House Bill 11-1124 (“HB 1124”) which will soon be sent to Governor Hickenlooper for consideration. Since we expect the Governor to sign the bill into law, there’s no time like the present to make sure your HOA’s Conflicts of Interest Policy complies with the requirements of the bill.

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Conflicts of Interest Bill Just Passed Colorado Senate

The Colorado Senate just passed House Bill 11-1124 ("HB 1124") without amendments on a 23 to 11 vote.  As we more fully described in our March 22nd blog posting, the bill enumerates the provisions which must be present in the conflicts of interest policy that every homeowners' association ("HOA") in Colorado is required to adopt.  In addition, HB 1124 requires that an individual who runs for a seat on the board of a special district must disclose whether he or she serves on the board of an HOA located within the special district.

HB 1124 will soon be heading to Governor Hickenlooper for consideration.  We fully expect the Governor to sign HB 1124 into law.

We will keep you posted as Governor Hickenlooper considers HB 1124.  Also, keep your eye on this blog for the announcment of an exciting service that Winzenburg, Leff, Purvis & Payne will be offering to HOAs relating to the requirements of the bill. 

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Secretary of State Eliminating Postcard Notifications - Start Planning Now!

During the 2010 legislative session, House Bill 10-1403 (“HB 1403”) was signed into law by Governor Ritter. The purpose of HB 1403 was to enable the Colorado Secretary of State (“SOS”) to reduce the costs of operations through phasing out postcard notifications and permitting corporations, including nonprofit corporations like homeowners’ associations (“HOAs”), to elect to file a periodic report every other year as opposed to an annual report.

The SOS has announced that distribution of postcard notifications to registered agents will be eliminated on January 1, 2012. As a result, registered agents of HOAs should subscribe to receive free email notifications from the SOS. We recommend that your registered agent sign-up for email notifications now to ensure that your HOA receives important notices and takes steps to remain in good standing with the SOS.

 

To learn more about the periodic reports and other information HOAs should know about the SOS, check out Business Organizations Frequently Asked Questions

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Conflict of Interest Bill Clears Senate Committee on Local Government

The Senate Committee on Local Government (“Committee”) today considered House Bill 11-1124 (“HB 1124”) which addresses conflicts of interest for individuals serving on the board of their homeowners’ association (“HOA”) and on special district boards. 

The bill was passed unanimously by the Committee with a favorable recommendation to the full Senate.  In addition, the Committee is recommending that the bill be placed on the Senate Consent Calendar. We expect the Senate will approve HB 1124 which currently contains the following provisions:

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HUD Relaxes Leasing Restrictions for FHA Approval of Condominium Projects

For the purpose of obtaining FHA approval of a condominium project, the U.S. Department of Housing and Urban Development ("HUD") has just announced a waiver on some leasing restrictions in condominium projects.  This waiver will be in effect for a period of one year. 

As you know, when a condominium project applies to HUD for approval for FHA-backed loans, one of the requirements is that at least 50% of the units must be owner-occupied. That means an association must be able to control the rental of units in the project. An obvious way that associations handle this is through rental restrictions contained in the governing documents of the association. 

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HOA Inquiry Stalls Trash Bill on Floor of the Colorado House

As noted in our March 1st blog posting, Representative Libby Szabo introduced House Bill 11-1116 (“HB 1116”) in the Colorado House which would regulate the ability of local governments to require citizens to pay for and utilize residential waste services provided for by the municipality in which they live.

Yesterday an amended version of HB 1116 was considered by the full House which provided that local governments (after the effective date of the new law) that plan to require citizens to pay for and utilize their residential waste services – must first provide the electorate with an opportunity to vote on whether the local government may take such action. 

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High Drama in Nevada Over HOA Omnibus Bill

Okay – so it has really felt like the 2011 legislative session in Colorado for HOAs has been pretty darn busy. We have battled over the assignment of junior lien rights, engaged in lengthy and sometimes intense negotiations on the superlien, reworked legislation affecting the governance of associations and the session is only half over. However, recent drama in Nevada has put our 2011 legislative session into perspective.

In addition to the federal investigation in Nevada of an alleged conspiracy targeting HOAs that we reported on in our March 7th blog posting, Senator Michael Schneider has introduced an omnibus bill in the Nevada Legislature he has dubbed “Sex, drugs and money: Why HOAs don’t work.” The bill is a whopping 43 pages long and addresses everything from regulating transfer fees to prohibiting HOAs from using radar guns to regulating the composition of HOA boards.

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Position Statement on HOA Registration for Pre-CCIOA Communities Published

The Colorado Division of Real Estate (“Division”) has published a Position Statement on whether common interest communities formed before July 1, 1992 (commonly known as “pre-CCIOA communities”) are required to comply with the new HOA Registration requirements. In the Position Statement, the Division noted that “The interpretation of whether the registration requirement applies to entities not formed under CCIOA has caused significant confusion amongst homeowners’ association registrants.” 

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Homeowner Associations - The Legislative Gift That Keeps on Giving

As we approach the midpoint in the 2011 Colorado legislative session, it’s worth taking a moment to reflect on how homeowner associations (“HOAs”) are present in the mind of many legislators in the Colorado General Assembly and trends we are seeing legislatively. Here are some observations:

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To Haul or Not to Haul - That is the Question

Representative Libby Szabo has introduced House Bill 11-1116 (“HB 1116”) in the Colorado House of Representatives, which would regulate the ability of local governments to require residents to pay for and utilize residential waste services provided for by these municipalities. 

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HOA Registration - Today is the Deadline to Register Without Penalty!

As we have been reminding you for several months now, the deadline for homeowner associations (“HOAs”) to register with the Colorado Division of Real Estate (“Division”) without incurring penalties is today! As reported in our December 17th blog posting, the Division granted a grace period through February 28, 2011 for HOAs to register. Here’s some important information you need to know if your association has not yet registered:

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HOA Conflict of Interest Bill (HB 1124) Clears the Colorado House of Representatives

The Colorado House of Representatives has passed House Bill 11-1124 (“HB 1124”) on third reading, which means the bill has cleared the full House and will now be referred to the Senate for action.  The Senate sponsor of HB 1124 is Senator Morgan Carroll.  Once the bill has been formally referred to the Senate, it will be assigned to a committee and scheduled for a hearing. 

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Colorado Bankers Association Derails Superlien Bill at the 11th Hour

At the request of Representative Deb Gardner, the sponsor of House Bill 11-1197 (“HB 1197”), the bill was postponed indefinitely today by the House Economic and Business Development Committee. What does that mean? It means that HB 1197 is dead for this legislative session.

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Important Update from CAI's Colorado Legislative Action Committee On the Superlien Bill (HB 1197)

CAI’s Colorado Legislative Action Committee (“CLAC”) and members of CAI’s Attorney Committee have been working diligently on a rewrite of House Bill 11-1197 (“HB 1197”). As originally introduced, HB 1197 would have had a detrimental affect on the superlien which homeowner associations rely upon under the Colorado Common Interest Ownership Act (“CCIOA”). 

Representative Gardner, the sponsor of HB 1197, has worked closely with us and other stakeholders to rewrite the bill in a manner that is positive for everyone involved. As a result of these efforts, a strike-below has been drafted which will be heard by the House Economic and Business Development Committee on Thursday. Simply put, a strike-below means the provisions of the original bill are completely stricken and replaced with the language contained in the strike-below.

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Overhauled Version of HB 1124 Passes Out of Committee

The House Local Government Committee has just passed an overhauled version of House Bill 11-1124 (“HB 1124”) out of Committee on a 10-1 vote with a favorable recommendation to the full House of Representatives. The version passed by the Committee, known as a strike-below, does not include any of the onerous provisions contained in the original version of HB 1124 as described in our January 22nd blog posting.

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House Bills 1110 and 1124 Being Heard in Committee on Monday

HB 1110

On February 9th, House Bill 11-1110 (“HB 1110”) was passed by the Colorado House of Representatives and was referred to the Senate where it has been assigned to the Senate Committee on Business, Technology and Labor. HB 1110 is currently scheduled to be heard by the Senate Committee on Monday.

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Thanks from CAI's Colorado Legislative Action Committee - Your Grassroots Efforts Were Successful on SB 122!

CAI’s Colorado Legislative Action Committee (“CLAC”) would like to thank all of you who participated in our Calls to Action on Senate Bill 11-122 (“SB 122”). As a result of your participation in the legislative process, SB 122 was defeated yesterday in the Senate Judiciary Committee. SB 122 has been classified as “postponed indefinitely.”

While SB 122 will see no further action this legislative session, the doors are not necessarily closed on the issue. Senators who voted against SB 122 noted that Senator Lundberg has brought an important issue to the table – which is the promotion of bidding at public trustee foreclosure sales. Senators also grappled with the purpose of redemption and how to ensure that junior lienors (like HOAs) are able to recover the full value of their liens. Concern was further expressed about the unsavory practices engaged in by some purchasers of junior liens. 

 

While things have quieted down for now, CLAC will monitor this issue during the current legislative session. We will also engage, in good faith, with stakeholders to tackle the issues expressed by members of the Senate Judiciary Committee while protecting the financial interests of HOAs in these tough economic times.

 

Thanks again for all of your grassroots efforts on SB 122! We will keep you informed as this issue develops. 

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SB11-122 Defeated in Committee

The Senate Judiciary Committee voted in opposition to SB11-122 earlier today. This defeat of SB11-122 means that community association lien rights in foreclosure are preserved.

Thank you to everyone who contacted Judiciary Committee members to ask that they oppose SB11-122!

 

 

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Update on House Bill 11-1197: Prepared by CAI's Colorado Legislative Action Committee

As you are probably aware, on February 2, 2011, House Bill 11-1197 (“HB 1197”) was introduced by Representative Deb Gardner in the Colorado House of Representatives. HB 1197 addresses the superlien provision of the Colorado Common Interest Ownership Act (“CCIOA”). The bill as originally introduced was detrimental to community associations in Colorado.

CAI’s Colorado Legislative Action Committee (“CLAC”) has been working closely with Representative Gardner and other stakeholders to protect and enhance the superlien. While a great deal of progress has been made on a complete rewrite of HB 1197, the process has not yet been completed. 

 

CLAC will continue to work diligently to protect the interests of community associations in Colorado. Negotiations on the rewrite of HB 1197 are expected to be wrapped up this week and CLAC will formally take a position on whether to support the bill. 

 

In order to provide the time necessary to conclude the work on HB 1197, the bill will not be heard in the House Economic and Business Development Committee (“Committee”) this week. Instead the bill is currently slated to be considered by the Committee next Tuesday. 

 

We will provide you with an update on the rewrite of HB 1197 when it is complete and CLAC’s position on the bill. We will also let you know what you can do to productively engage in the political process on HB 1197. 

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SB 122 Update - Please Contact Senators Immediately

This morning Senate Bill 11-122 (“SB 122”) was heard before the Senate Judiciary Committee (“Committee”). As you know, if signed into law, SB 122 would destroy the ability of homeowner associations (“HOAs”) to assign junior lien rights to investors which would have a detrimental impact on the finances of many HOAs in Colorado. SB 122 – A Gamble HOAs Can’t Afford Colorado to Take more fully explains the issue.

Public testimony has been closed on SB 122 in the Committee. Senator Lundberg, the sponsor of the bill, introduced an amendment to SB 122 that does not address the underlying concerns HOAs have with the bill. The Committee is convening Wednesday afternoon to vote on SB 122 and the amendment.

 

Please call and email members of the Committee before noon on Wednesday to ask them to vote NO on the amendment and NO on SB 122. 

 

Names and Contact Information for the Senate Judiciary Committee:

 

CHAIR:  Senator Morgan Carroll:  303-866-4879; morgan@senmorgancarroll.com

VICE-CHAIR:  Senator Lucia Guzman:  303-866-4862; lucia.guzman.senate@state.co.us

Senator Angela Giron:  303-866-4878; angela.giron.senate@state.co.us

Senator Steve King:  303-866-3077; steve.king.senate@state.co.us

Senator Kevin Lundberg:  303-866-4853; kevin@kevinlundberg.com

Senator Linda Newell:  303-866-4846; Linda.newell.senate@gmail.com

Senator Jeanne Nicholson:  303-866-4873; jeanne.nicholson.senate@state.co.us

Senator Ellen Roberts:  303-866-4884; ellen.roberts.senate@state.co.us

Senator Mark Scheffel:  303-866-4869; mark.scheffel.senate@state.co.us

 

Thank you for participating in the Calls to Action on SB 122.  We will provide you with an update on the status of the bill following the Committee vote tomorrow. 

 

 

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HB 1197 Still on the Drawing Board

As we informed you in our February 2, 2011 blog posting, HB 1197 was introduced that day and addresses the superlien that homeowner associations ("HOAs") have under the Colorado Common Interest Ownership Act ("CCIOA").  As originally introduced, the bill was detrimental to HOAs. 

While the bill was originally scheduled to be heard tomorrow in the House Economic and Business Development Committee, the bill as initially written is undergoing a major rewrite and is not expected to be heard in Committee until later this week.  CAI’s Colorado Legislative Action Committee (“CLAC”) has been working diligently with the sponsor of the bill, Representative Deb Gardner, and other stakeholders to redraft the bill in a manner that is positive for HOAs.

 

Please do not contact members of the Committee to ask them to oppose HB 1197 at this time. The language as originally introduced is no longer on the table. We will provide you with updates as they become available on the rewrite and the position which CLAC ultimately takes to protect the interests of HOAs in Colorado. We will also provide you with updates on what you can do to become productively engaged in this process. 

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SB 122 CALL TO ACTION: Contact Members of the Senate Judiciary Committee on Monday

As you know, Community Association Institute’s Colorado Legislative Action Committee (“CLAC”) has been working on Senate Bill 11-122 (“SB 122”). If passed, SB 122 would destroy the ability of homeowner associations (“HOAs”) to assign junior lien rights to investors. This would have a detrimental impact on the finances of many HOAs in Colorado. SB 122 – A Gamble HOAs Can’t Afford Colorado to Take more fully explains the issue. 

CLAC has been working on another bill that could significantly blunt the negative impact of SB 122 on associations. While progress has been made, stakeholders have not yet approved a final rework of the legislation. As a result, we must take immediate action to defeat SB 122.

SB 122 is scheduled to be heard before the Senate Judiciary Committee on Tuesday morningPlease take a moment right now to call and email members of the Senate Judiciary Committee to ask them to vote NO on SB 122. Please make these contacts on Monday. 

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SB 122 Scheduled for Hearing on Tuesday - Stay Tuned for Important Updates

As we informed you in our January 31st blog entry, Senate Bill 11-122 (“SB 122”) was introduced for a second year in a row by Senator Lundberg. The bill, as currently written, would destroy the lien assignment market for HOAs – drying up an important revenue stream for associations in these tough economic times. 

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Amended Version of HB 1110 Clears the Colorado House

Yesterday, the Colorado House of Representatives passed an amended version of HB 1110. As we fully described in our January 21, 2011 blog entry, HB 1110 amends the Colorado Revised Nonprofit Corporation Act to apply certain governance provisions of CCIOA to “Residential Nonprofit Corporations.” 

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HOA Registration Payment System is Operational

The Colorado Division of Real Estate has just announced that the payment system for the HOA Registration program is operational.  If your association has already registered and was unable to pay the fee, the Division is requesting that you log into your account to make payment for your association's registration.   

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SB11-122 Committee Hearing Laid Over

The Senate Judiciary Committee is not going to hear testimony on SB11-122 today as was originally scheduled. The Judiciary Committee will re-schedule the hearing for a later date. 

SB11-122, as written, would impact the redemption rights of junior lienors, such as homeowner associations. The delayed hearing date for SB11-122 will allow for further discussions about the contents of the bill with the bill sponsor, Senator Kevin Lundberg, and other stakeholders.

For now, you can suspend your calls and emails to Senate Judiciary Committee members. However, please continue to spread the word among board members, residents, community managers, and other community association constituents about the potential impact of this bill on Colorado communities.

We will provide you with updates and additional calls to action as soon as we have more information on the status of this bill.

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HB 1197 Introduced Today Addressing HOA's Superlien

House Bill 1197, sponsored by Representative Deb Gardner, was introduced today in the Colorado House of Representatives.  

The bill, as originally introduced, addresses: (1) calculation of an association’s superlien; (2) timeframe for a lender to pay an association’s superlien; (3) penalties that may be assessed for failure to pay the superlien; (4) affect of payment of the superlien on subsequent foreclosures; (5) the ability of associations to foreclose on a superlien and junior lien in the same action; (6) the affect on a senior lien by an association’s foreclosure; and (7) the requirement of an association to provide ledgers evidencing delinquencies.

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SB 122 - CALL TO ACTION

Community Association Institute’s Colorado Legislative Action Committee (“CLAC”) has been working on Senate Bill 122 (“SB 122”). If passed, SB 122 would destroy the ability of homeowner associations (“HOAs”) to assign junior lien rights to investors. This would have a detrimental impact on the finances of many HOAs in Colorado. SB 122 – A Gamble HOAs Can’t Afford Colorado to Take more fully explains the issue. 

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Division of Real Estate: Pre-CCIOA Communities Exempt from HOA Registration

The Colorado Division of Real Estate (“Division”) has published an HOA Information Office Legislative Summary and Resource Handout (“Summary”). In that Summary, the Division has noted that pre-CCIOA communities (associations created before July 1, 1992) that have not elected to be treated as CCIOA communities – are not required to register. However, the Division is urging those communities to voluntarily comply with the HOA registration requirements. 

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FHFA Excludes Community Associations from Proposed Rule on Transfer Fees

The Federal Housing Finance Agency (“FHFA”) has issued a News Release announcing the creation of a Proposed Rule that will be published in the Federal Register addressing private transfer fee covenants. The Proposed Rule would limit Fannie Mae, Freddie Mac and the Federal Loan Banks from “dealing in mortgages on properties encumbered by certain types of private transfer fee covenants and in certain related securities.”

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HB 1110 Amended to Exclude HOAs

As we fully described in our January 21, 2011 blog entry, House Bill 1110 amends the Colorado Revised Nonprofit Corporation Act to apply certain governance provisions of CCIOA to “Residential Nonprofit Corporations.” While it was clear that the intent of the legislation was never to include homeowner associations within the definition of Residential Nonprofit Corporation, the broad definition in the original version of the bill did capture associations.

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Junior Lien Bill - Inequitable Procedural Treatment for HOAs

Yesterday we announced that for the second year in a row, Senator Lundberg had introduced a bill (SB 122) which would destroy any incentive for investors to purchase the junior lien rights of homeowner associations. In addition to the adverse impact this bill would ultimately have on paying members in associations, SB 122 singles out associations for inequitable procedural treatment.

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Junior Lien Bill Introduced in the Colorado Senate - Round II for Community Associations

On January 31, 2011, Senate Bill 11-122 (“SB 122”) was introduced in the Colorado Senate. Sponsored by Senator Lundberg for the second year in a row, the intent of the legislation is to obtain the highest bid possible on property at a public trustee foreclosure sale. The philosophy behind the bill is to get the price bid up high enough at the sale to have excess proceeds available to be distributed to the individual who loses his or her home in foreclosure. All good intentions aside, SB 122 attacks the lien rights of homeowner associations in Colorado.  

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HUD Extends "Anti-Flipping" Waiver

On Friday, January 28, 2011, the U.S. Department of Housing and Urban Development (“HUD”) announced that it was extending the “anti-flipping” waiver through December 31, 2011. 

As a general rule, FHA regulations prohibit insuring a mortgage on a home which is owned by a seller for less than 90 days. However, given the continued foreclosure crisis, HUD has extended the waiver of this requirement for the duration of 2011 to promote the quick resale of homes. 

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Pre-CCIOA Communities Exempt from HOA Registration

This morning at CAI’s Wake-Up Call breakfast meeting, Aaron Acker – the HOA Information Officer for the Colorado Division of Real Estate (“Division”) – announced that pre-CCIOA communities will not be required to register with the Division. This means that associations created before July 1, 1992, will not be required to comply with the registration requirement. 

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Extension of the Foreclosure Deferment Program Powers Through the Colorado House

In response to the crisis where lenders were foreclosing on an unprecedented number of homes in Colorado, in 2009 Governor Ritter signed into law a Foreclosure Deferment Program (“Program”) which is currently scheduled to expire on June 30, 2011. The Program provides eligible homeowners with an opportunity to defer public trustee foreclosure sales on their homes for a period of up to 90 days while they pursue options to remain in their homes.

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House Bill 1103 - Tax Breaks for Windmills

In August of 2008, the Colorado Common Interest Ownership Act was amended to create C.R.S. 38-33.3-106.7 which prohibits unreasonable restrictions on the installation of “energy efficiency measures” in community associations. At the same time, at C.R.S. 38-30-168, a statute on the books since 1979 addressing the installation of “solar energy devices” in community associations was amended to more fully address the installation of solar panels and to permit residential windmills in associations. Representative Andy Kerr, a champion of green energy, was the sponsor of these significant revisions to Colorado law. 

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HOA Conflict of Interest Bill Introduced

On Friday, January 21, 2011, House Bill 1124 (“HB 1124”) was introduced in the Colorado House of Representatives. Sponsored by Representative Angela Williams, HB 1124 would amend the Colorado Common Interest Ownership Act relating to conflicts of interest of individuals serving on the executive boards of homeowner associations. 

In particular, the legislation would require directors to disclose a conflict of interest "if any contract, decision, or other action taken by or on behalf of the executive board would financially benefit any member of the executive board or any person who is a parent, grandparent, spouse, child, or sibling of a member of the executive board or a parent or spouse of any of those persons. . .” In the event such a conflict exists, it must be disclosed to the executive board and the director is permitted to participate in discussions on the issue. However the director is not permitted to cast a vote on the issue. If a director violates these requirements, “any contract entered into or action taken in violation of this section is void and unenforceable.” 

In addition to these proposed revisions to CCIOA, HB 1124 would not permit an individual serving on a metropolitan district board to concurrently serve on the executive board of a homeowner association which is located within the metropolitan district. 

 

CAI’s Colorado Legislative Action Committee will be addressing this bill in the Colorado General Assembly. We will provide you with updates on the legislation as it proceeds through the legislative process. 

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HOA-Related Bill Introduced in Colorado House of Representatives

House Bill 1110 (HB 1110) was introduced today in the Colorado House of Representatives. Sponsored by Representative Cindy Acree, HB 1110 would amend the Colorado Revised Nonprofit Corporation Act (“Nonprofit Act”) to extend some provisions of the Colorado Common Interest Ownership Act (“CCIOA”) and other requirements to “Residential Nonprofit Corporations” which are defined in the legislation as “a nonprofit corporation that has residential members.” Based upon current provisions of the legislation, it is clear that most homeowner associations in Colorado would be required to comply with the requirements of the bill.  In addition, members of associations would fall within the definition of "residential member."

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Colorado General Assembly Convenes for 2011 Legislative Session

On Wednesday, January 12th, the Colorado General Assembly will convene for the 2011 legislative session. We expect community association issues to be front and center once again and will provide you with updates on bills affecting associations as they are introduced and proceed through the legislative process. 

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HOA Information and Resource Center Website Up and Running

The website for the HOA Information and Resource Center, created by the Colorado Division of Real Estate (“Division”), is up and running. The website currently provides information on the HOA Registration, methods that can be utilized for homeowners to submit complaints to the Division, consumer resources and contact information for Aaron Acker – the HOA Information Officer.

The website is a work in progress with more information and resources expected to be made available in the coming weeks.   

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HOA Registration Has Gone Live

As promised by the Colorado Division of Real Estate (“Division”), the online HOA Registration has gone live.

Here are some important reminders:

●  All HOAs must formally register online with the Division prior to March 1, 2011. 

●  The registration fee for each HOA will be $8.93. Associations with annual revenues of $5,000 or less OR are not authorized to levy assessments and do not have any revenue – are not required to pay the $8.93 fee. 

●  All registrations must be completed online. The HOA Information and Resource Center will not accept paper applications or cash or checks for payment.

●  You will need the following information to register your association:

(1)   Name of the association;

(2)   Name of the association’s designated agent or management company, if any;

(3)   Valid physical address and telephone number for both the association and the designated agent or management company, if any;

(4)   Name of the common interest community;

(5)   Initial date of recording of the declaration;

(6)   Reception number or book and page number for the main document that constitutes the declaration;

(7)  The type of association (e.g. planned community, condominium); and

(8)  The number of units in the association. 

 

 

If you would like Winzenburg, Leff, Purvis & Payne to assist your association with the registration process, please email Molly Foley-Healy at mfoley-healy@wlppaw.com.

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HOA Registry: New Information from Division of Real Estate

The Colorado Division of Real Estate (“Division”) has just provided the following updated information on the HOA Registry: 

  1. All HOAs must formally register with the Division of Real Estate prior to March 1, 2011. 
  2. The online registration process will be available for use on January 3, 2011.
  3. The registration fee for each HOA will be $8.93. Associations with annual revenues of $5,000 or less OR are not authorized to levy assessments and do not have any revenue – are not required to pay the $8.93 fee. 
  4. All registrations must be completed online. The HOA Information and Resource Center will not accept paper applications or cash or checks for payment.

As we noted in our December 17th blog posting, all associations in Colorado have been granted a temporary and automatic registration by the Division that is valid through February 28, 2011. The Division promulgated this emergency rule to ensure that associations were not penalized for failing to register by the initial statutory deadline of January 1, 2011.

 

We will provide you with a link to the online registration as soon as it becomes available.

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President Obama Signs Legislative Fix to Red Flags Rule into Law

On December 18, 2010, President Obama signed S.3987  into law. As we noted in our December 14th blog posting, the purpose of the legislation is to limit the types of businesses and entities defined as “creditors” which are required to comply with the Red Flags Rule (“Rule”).

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Grace Period Granted for HOA Registration

The Colorado Department of Regulatory Affairs ("DORA") has promulgated an Emergency Rule that will provide a grace period for HOAs to register with the Division of Real Estate ("Division") through February 28, 2011. In fact, the Rule states: "The purpose of this rule is to provide an immediate and automatic temporary registration to HOA’s who have not been required to register in the past, but are now required to do so pursuant to House Bill 10-1278."

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Legislative Fix for Red Flags Rule Sent to President Obama

As we mentioned in our December 8th posting on the Red Flags Rule (“Rule”), implementation of the Rule by the Federal Trade Commission (“FTC”) has been repeatedly delayed since 2008 while members of Congress seek a legislative fix limiting the scope of the Rule. The FTC is currently slated to begin enforcement of the Rule on January 1, 2011. 

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FHA Re-Certification Deadline Extended

The United States Department of Housing and Urban Development (“HUD”) has just announced an extension of the December 7th deadline for recertification of condominium projects that had received approval for FHA-backed mortgage insurance prior to October 1, 2008.    

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Red Flags Rule Effective January 1st

It’s not surprising if you haven’t heard of the Red Flags Rule (“Rule”). That’s because since the Rule was originally slated to go into effect in January of 2008, members of the United States Congress have repeatedly asked the Federal Trade Commission (“FTC”) to delay implementation of the Rule while a legislative fix was sought limiting the entities that will be required to comply with the Rule. While that task has not been accomplished, the Rule is currently slated to become effective on January 1, 2011.

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Is Your Condominium Ready for FHA Re-Approval?

The Federal Housing Administration is implementing a new approval process for condominium projects.  All projects must now obtain re-approval every two years.  Most current approvals are scheduled to expire on December 7, 2010.

Check your condominium's approval status at the following link, and contact us if you need assistance obtaining re-approval before the December deadline.

https://entp.hud.gov/idapp/html/condlook.cfm

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Start Preparing Now for HOA Registration

 

As you know from our November 12, 2010 posting, most community associations in Colorado will be required to register with the Colorado Division of Real Estate (“Division”) by January 1, 2011.   While there was some talk that associations would be able to begin registering as early as November, the Division has not yet completed the online registration process. In fact, an emergency rule may be promulgated to provide a grace period for associations to register. 

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Colorado HOA Registration Information

All community associations in Colorado must register with the Division of Real Estate by January 1, 2011. Associations that do not register will lose their lien rights and the ability to enforce recorded covenants. The January 1st deadline, and the harsh consequences for associations, makes compliance a top priority. However, the Division of Real Estate has not finalized the registration process, so associations cannot yet comply with the law. You can learn more about the registration process on the Division of Real Estate’s website.

We will post updates on the registration process to our firm’s website as soon as more information is available. You can receive updates via email by subscribing to the RSS feed along the left side of the page at www.cohoalaw.com.

If you have any questions concerning HOA registration or other legal compliance issues, please contact one of our attorneys at (303) 863-1870.

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An Ombudsman For Everyone? Apparently Not

Earlier in this legislative session, we wrote about proposed new legislation, Colorado H.B. 1278, that was going to create an HOA Ombudsman as a State of Colorado employee. The earlier version of the bill required the Ombudsman to be an advocate for the rights of unit owners in their communities and offer to mediate disputes, but would not purport to give legal advice to any party; act as a clearing house for information concerning the rights and duties of unit owners, declarants, and unit owners’ associations under CCIOA; report suspected violations of the new law or rules of the Division of Real Estate; and report other suspected violations of law to the appropriate authorities.          

The proposed law went through many iterations, but was finally passed on third reading by both the Senate and House last week, and was sent to the Governor’s desk for signing. Assuming that the bill is not vetoed, it will become effective on January 1, 2011. On its journey, the bill was winnowed down to remove the advocacy provisions, and instead of creating an Ombudsman to advocate for everybody, now creates within the Division of Real Estate an HOA Information and Resource Center, the head of which will be the HOA Information Officer.

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Protecting Tenants under Foreclosures

While this may not seem such a big deal to many of our readers, - read: nonlawyers -, HOA lawyers have a very difficult practice. Not only is it important to be well versed in the major areas of the practice, such as Real Estate, Colorado Common Interest Ownership Act, Corporation and Non-Profit Corporate Acts, Contracts, Litigation, especially Collections, but also knowledgeable in other areas to seek expert advice to make sure the client receives the best and most accurate information. Examples include laws regarding fair housing, employment, bankruptcy, taxes and other esoteric areas.

With all the new laws being passed directly involving HOA’s (see Mark Payne’s most recent posting) and those affecting HOAs indirectly, it is important to be aware of situations that may have impact how we attorneys offer advice.

Last year Congress passed Public Law 111-22, Title VII –Protecting Tenants at Foreclosure Act, effective May 20, 2009. The law was passed to protect bona fide tenants against immediate evictions by the successor in interest of “any foreclosure on a federally-related mortgage or loan or on any dwelling or residential real property after the date of the enactment [May 20, 2009]…” The law appears to focus on public trustee foreclosures on mortgages covered under federal law. But, because of the inclusion of “…or on any dwelling or residential property after the date of enactment…,” I would interpret the intent of “or” to include all foreclosures on dwellings and residential real property with or without it being a “federally-related mortgage,” - including HOA lien foreclosures as well.

 

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The Legislature In Session - An Ombudsman for Everyone

Like the changing of seasons, our legislature has returned, and with it, numerous ideas on how our lives can be better regulated. Over the last several years, we have had several legislators who take a particular interest in the operations of homeowners associations. They have an interest in protecting what, in their minds, are under-represented homeowners.

Along those lines, this year Representatives Ryden and M. Carroll have introduced HB10-1278, which, if passed, will create an HOA ombudsman in the Colorado Division of Real Estate. The HOA ombudsman would be appointed by the Executive Director of the Colorado Department of Regulatory Agencies. The ombudsman would be required to have at least five years of experience working with issues arising under the Colorado Common Interest Ownership Act (“CCIOA”), or in the operation or management of associations as either an attorney, accountant, a member of an executive board or any combination thereof.

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New Laws Affect Association Governance

The 2009 legislative session began with relatively few bills affecting Colorado common interest communities. But the last few weeks of the session more than made up for the slow start. New laws concerning community association governance do the following: (i) mandate that association boards have access to extensive, specific information to assist with their decision-making, (ii) establish qualifications for individuals serving as committee chairs, and (iii) require policies concerning reserve programs. Other laws enacted but not discussed in this article include restrictions on affordable housing units, modifications to foreclosure time frames for some borrowers, and changes to provisions of the Colorado Common Interest Ownership Act applicable to small, exempt communities. The table below gives a summary of the new laws affecting association governance, the action required by associations, and the effective dates of the laws.

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UCIOA 2008 and UCIOBORA

For those of you who have an interest in the evolution and development of the Uniform Common Interest Ownership Act, the American Bar Association House of Delegates recently adopted the 2008 Uniform Common Interest Ownership Act as proposed by the Uniform Law Commission. This new act is an attempt to integrate, address and resolve a number of issues that have been raised in the formation, operation and management of common interest communities in the last thirty years. But, be mindful that this is only a recommended uniform act – it is not the law in Colorado (and may never be), nor any other state at this time. However, it does provide some guidance and insight into the rationale behind various provisions that we are all familiar with in the Colorado Common Interest Ownership Act ("CCIOA").

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Carbon Monoxide Alarms and Colorado's New Law

Colorado’s new law concerning carbon monoxide alarms was signed by Governor Ritter on March 24, 2009 and applies to sales, rentals and remodels of single family and multi-family residences on and after July 1, 2009. The definition of “multi-family dwelling” in the new law specifically includes condominiums, and therefore, subject to certain limitations, would apply to units in condominium associations.

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New Resource Concerning Alternative Energy Devices

The Governor’s Energy Office has launched an informational site about the recent Colorado legislation supporting homeowner installation of alternative energy devices. You can access the information here.

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Clearing the Air: Dealing with Secondhand Smoke

Open windows during the warmer months of the year allow you to experience the fresh, Colorado air.  But sometimes that air is not so fresh.  Secondhand tobacco smoke can make its way into your home, causing irritation and potential harm.  Community associations may have a role, and an obligation, in minimizing the impact of second-hand tobacco smoke in your home.

The Colorado Clean Indoor Air Act took effect nearly two years ago, on July 1, 2006. The Clean Indoor Air Act applies to community associations and prohibits smoking in restrooms, hallways, lobbies and other common areas in any public or private buildings, including condominium buildings, and within a fifteen foot radius of building entryways.  The law does not prevent owners from smoking in their residences, and does not clearly restrict smoking on private patios or balconies, although some associations impose more stringent smoking restrictions through their recorded covenants or rules.  Colorado community associations, and individuals, in violation of the Clean Indoor Air Act may face fines.  The law establishes a fine schedule of $200 for the first violation, $300 for the second, and $500 for the third and subsequent violations.

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Hearing Due Process - Now What?

Our legislature continues to tinker with the responsible governance policies made mandatory several years ago. This year Governor Ritter signed H.B. 1135 which amends Section 209.5 of the Colorado Common Interest Ownership Act (CCIOA). Section 209.5 first became law in 2005 by what has commonly been referred to as S.B. 100 which required every association to adopt a responsible governance policy concerning enforcement of covenants and rules, including notice and hearing procedures and a schedule of fines. Prior to adoption of S.B. 100, CCIOA permitted an association to levy reasonable fines for violations of the declaration, bylaws and rules and regulations, but only after notice to the offending owner and an opportunity for a hearing. Continue Reading Posted In From Capitol Hill/Legislation , Governance , Your Governing Documents
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Greening Your Community Association

"Going green" seems all the rage these days. From the cover of Newsweek, to hybrid vehicles, to Al Gore and the bevy of eco-friendly products at the local retail store, the push for consumer products and practices that minimize the impact on Earth and its resources has found its place in mainstream America.

Community associations, too, play a role in the green movement. New or old, common interest communities impact the Earth at both the association level and the individual homeowner level. Individuals and associations alike can implement many practices aimed at reducing energy consumption and the overall carbon footprint of their daily activities.

For the past three decades Colorado statutes concerning solar energy devices have guided community associations’ architectural policies. More recent legislation establishes mandates regarding community associations’ landscaping policies and seeks to allow homeowners to use more energy saving devices such as wind generators, retractable window awnings, and clotheslines.

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New Legislation Supports Homeowner Use of Alternative Energy Devices

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.  Continue Reading Posted In Covenant Enforcement , From Capitol Hill/Legislation
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Update on Legislation Affecting Community Associations: Board Actions without Meeting

On March 3, 2008, the Colorado General Assembly sent this legislative session’s first piece of legislation impacting Colorado community associations to Governor Ritter for signing. Upon enactment, House Bill 08-1089 will amend the Colorado Revised Nonprofit Corporation Act to provide new default procedures for board actions taken without meetings. The new legislation aims to facilitate board actions between meetings and addresses the issue of board members who cannot or do not vote on proposed matters within the necessary time period for board action. House Bill 08-1089 will not take effect until August 6, 2008, at the earliest, and remains subject to the possibility of veto or voter referendum. Continue Reading Posted In From Capitol Hill/Legislation
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Colorado Foreclosure Law and Your Association's Superlien

As part of the changes to Colorado’s foreclosure law that become effective January 1, 2008, C.R.S. §38-38-103(1)(c) will read:

If a recorded instrument does not specify the address of the party purporting to have an interest in the property under such recorded instrument, the party shall not be entitled to notice and any interest in the property under such instrument shall be extinguished upon the execution and delivery of a deed pursuant to section 38-38-501.

Meaning, if your association’s current contact information is not listed in your Declaration, a lender foreclosure could extinguish your association’s super priority lien.

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SB 100 and SB 89 - What Do We Do Now?

We all know that our 2006 legislature was very busy cleaning up SB-100 adopted in 2005. The legislature, in its haste to get SB 100 passed, left more than a little ambiguity in its provisions. As we’ve reported in the past, SB-89 (formally known as SB06-89) is the clean up bill. We’ve attached here a comparison chart summarizing actions associations should take, or might consider taking, based on the provisions of SB 89.

The full text of SB 100 was 28 pages long, and the full text of SB 89 is 18 pages long. Our summary is simply a paraphrasing of certain key provisions of the two acts. It is always dangerous to paraphrase statutes, as every part of a statute is important. Further, certain provisions of the statutes may be subject to other specific provisions of an association’s governing documents. Therefore, before your association takes any action based on this comparison chart, please check with your association’s attorney for specific application.

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AMENDMENT 40 - VOTE NO THIS NOVEMBER

We want to let you know about an issue that is important to us at Winzenburg, Leff, Purvis and Payne, LLP. In fact we think it is important enough for all of you that we are for the first time coming out with a public opinion on a political issue. We are asking you to Vote NO on 40 which will term limit judges. Whether you are conservative, liberal, Republican, Democratic or Independent Amendment 40 is a bad idea with serious consequences which you should oppose.

Even though the proponents are pushing Amendment 40 purpose of term limiting judges as a good idea; the negatives far out-weight any gains they offer for passage.

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Colorado Common Interest Ownership Act (CCIOA)

Under the "Other Resources" category, on the lower left hand side of this page, you will find a pdf version of the Colorado Common Interest Ownership Act (CCIOA), including all of the changes made by SB06-89. Just click on the link and you will be taken to a copy of the Act. Posted In From Capitol Hill/Legislation
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Senate Bill 2006-89: What You Need to Know

As many of you are probably aware, Colorado recently passed Senate Bill 06-089, legislation intended to clean up provisions from last year’s SB 05-100.  Both Bills modify and add provisions to the Colorado Common Interest Ownership Act (“CCIOA”).  SB 089 creates a number of important new requirements for associations and homeowners, including mandatory procedures for a unit owner filing a claim against the association’s insurance policy and a mandatory disclosure that must be included in every residential real estate contract for property located within a common interest community.  We highlight other SB 089 amendments to CCIOA in this memorandum.

 

Recently, we have received a number of questions from associations as to how their SB 100 Responsible Governance Policies must be modified to comply with SB 089.  Although we cannot answer this question as to policies drafted by other law firms, it is our general opinion that few changes are required to these policies.  Nevertheless, we recommend that both the Conflict of Interest and Inspection and Copying of Records policies be modified to reflect material changes made to CCIOA by Sections 12 and 13 of SB 089.  Furthermore, we recommend that associations adopt a written dispute resolution policy by January 1st, as required by Section 5.

 

Please contact our office if you have any questions regarding SB 089 and its requirements.  We look forward to working with you on these matters.

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Colorado's New Foreclosure Law - HB 06-1387

On June 1, 2006, Governor Owens signed into law HB 06-1387. This is a substantial, sweeping, overhaul of Colorado's real estate foreclosure law. Among many other things done by this law, the most significant change made is the elimination of an owner's right to redeem property after a sale of the property. Lienholders still have the right to redeem. As a tradeoff for elimination of the right of redemption, owners are given a longer period of time to cure the default before the property actually can be sold at foreclosure sale.

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SB06-89 - New Law

We know you've been waiting with much anticipation the outcome of this year's legislative session. Senate Bill 06-89, the legislation intended to clean up last year's SB 05-100, was signed into law on Friday, May 26, by Governor Owens. We will be discussing in future posts how this new legislation affects SB 05-100.

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SB 89 - The End is Near

SB 06-089 (seen here in its final form) is finally making its way to Governor Owens' desk. Though the heavy lifting is over, the Governor must still sign the bill if it is to be enacted. If you support the bill, you should contact Nancy Lemein, Director of the Governor's Office of Policy and Initiatives to assure that the Governor hears your voice:

Nancy Lemein
Director, Governor's Office of Policy and Initiatives
136 State Capitol
Denver, CO 80203-1792
Ph 303-866-2471

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SB 06-089 modifies insurance section established by SB 05-100

As you already know, SB 06-089 has moved out of the Senate and on to the House for review. Section 16 of the bill has remained substantially intact since the bill's introduction and readdresses C.R.S. 10-4-110.8(5), regarding homeowner's insurance.

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SB 06-089 Passes out of Senate

SB 06-089 has passed through the Senate and is now on its way to the House where it will again be directed to a committee for review. As we previously mentioned, there have been amendments to the bill as it was introduced. Click here to view the bill as it left the Senate.

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SB 89 to be heard by the Senate as early as Monday

If you support SB 89, which is largely a clean-up bill to last year's SB 100, now is the time to call your State Senator and voice that support. The Senate could take action on this bill as early as Monday, February 27, 2006, so be sure to make contact no later than Monday morning.

If you want to help but you're not sure who your Senator is, just go to www.vote-smart.org.

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SB 06-089 Moves Through Senate Judiciary Committee with Amendments

SB 06-089 emerged from the Senate Judiciary Committee with some amendments on Monday. For those interested, CLAC (Colorado Legislative Action Committee) has prepared a useful matrix showing the current status of the bill, with amendments.

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SB 06-089: Colorado Legislation Proposes New Disclosure under C.R.S. 38-33.3-209.4

We already reported that your Colorado association may be responsible for another responsible governance policy under the proposed revisions to SB 100, but did you know SB 06-089 also proposes an additional disclosure under C.R.S. 38-33.3-209.4?

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SB 06-089 Update: Senate Judiciary Committee Hearing

SB 06-089, the SB 100 clean-up bill, is scheduled to be heard in front of the Senate Judiciary Committee on February 6, 2006, at 1:30 pm. If you intend to make your comments heard prior to the hearing, you should contact your senator by February 3, 2006. You also have the option of attending the hearing.

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New Policy Requirement for Colorado Associations?

We already told you that the SB 100 clean-up bill has been introduced. If you have not had the opportunity to review the bill yourself, you may not know that additional changes are proposed to 38-33.3-124, regarding alternative dispute resolution.

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Follow-Up Bill to Colorado's SB 100 Introduced: SB 06-089

The Capitol is again bustling as our state legislators return from hiatus. As you may already know, a clean-up bill has been introduced as follow-up to last year's infamous SB 100. The bill, SB 06-089, is again sponsored by Senator Hagedorn and Representative Carroll. Keep your eye on our site for more information on the bill as it winds its way through the legislative process. A copy of SB 06-089 is here.

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S.B. 100 - Is It Over Yet?

As you undoubtedly know by now, the first significant time sensitive obligation imposed by S.B. 100 has now passed. (You can review a copy of S.B. 100 by clicking on S.B. 100 under the "Other Resources and Lawyer Blogs" in the left margin of this page.) By January 1, 2006, virtually every common interest community was to have adopted seven mandatory responsible governance policies dealing with how it goes about adopting and amending policies, handling collections, dealing with board member conflicts of interest, conducting meetings, providing for members to inspect and copy association records, enforcing covenants and rules and imposing fines, and investing association reserve funds. If your association has not yet adopted these policies, it should do so right away. While there is no explicit remedy or penalty for an association's failure to adopt these policies, to carry out its fiduciary responsibilities, your board must adopt these policies to comply with Colorado law and avoid any liability to your members for failure to do so.

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CAI Releases Results of Recent Community Association Study

If you follow the news reports, it can sometimes seem as if community members do not appreciate the work undertaken by volunteer board members and other active homeowners. A recent nationwide study conducted by Zogby International on behalf of the Community Association Institute dispels that myth, showing, among other things, that an overwhelming 71% of residents have positive opinions of their associations.

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S.B. 100 - What Associations Does It Apply To?

We have discussed in previous postings that S.B. 100 (the "Act") was signed by Governor Owens on June 6, 2005. Portions of the Act became effective immediately, while the balance of the Act becomes effective on January 1, 2006. For the most part, the Act modifies the provisions of the Colorado Common Interest Ownership Act ("CCIOA"). We continue to receive a number of questions about the applicability of the Act to pre-CCIOA associations (those formed before July 1, 1992), as well as associations that were exempt from the provisions of CCIOA, and specifically, whether the mandatory responsible governance policies required by the Act must be adopted by all associations.

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Recording Meetings - What Can a Board Do?

Occasionally, we get questions from board members and managers about members that want to not only attend meetings, but also want to record the meeting, by either audio or video means. When your association has not contemplated this request, too often the meeting can turn out like this one.

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SB 100 - Limits on Board's Authority to Modify Common Elements?

We have received a number of questions about whether SB 100 limits an Association's ability (acting through its board of directors) to make changes to its common elements - as an example, can the board change hardscape landscape improvements to irrigated sod? While SB 100 does a number of things, including imposing a number of additional requirements on the association's board of directors, the simple answer is that it does not restrict the board's authority to make this type of decision.

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Xeriscape: Rocks, Wood Chips, and Cacti? Absolutely Not.

Let's face it. Colorado has a drier climate than, say, Florida. We live in a semiarid state and throughout history it has seen its share of droughts. Legislators certainly had this in mind when they passed S.B. 100 which, in part, stifles the ability of associations to prohibit or limit Xeriscape.

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Political Landscaping

Even though no major elections are scheduled for 2005, as early as mid-September, Coloradoans may see more evidence of ballot issues and party candidates than in recent years. Section 2 of Senate Bill 100 opens the door for homeowners living within community associations to display political signs on their property up to forty-five days before an election and seven days following the day of the election. This new addition to the statutory mandates for community associations allows an association to regulate the size and number of political signs that an owner displays only if a city, town, or county ordinance also regulates political signs on residential property. If an ordinance exists, the association may not create more restrictive policies for its owners concerning political signs. If no ordinance exists, an association can only limit the number of signs that an individual owner places on her property to one sign per office or ballot issue contested in the pending election. But, where no ordinance controls, an owner cannot place signs larger than three feet by four feet on his property. Many Colorado cities, towns, and counties either do not have political sign regulations or have broad regulations that place few restrictions on the number and size of political signs permitted.

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SB 100 - Restrictions on Automatic Collection of Attorneys Fees

Now that SB 100 has been law for a month, we, and you, are able to start comprehending its many changes to the way community associations have historically done business. For the full text of the law as approved by Governor Owens, click here. One of the most significant changes has to do with the collection of attorneys fees from members that violate the association's governing documents.

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Upcoming Changes in Bankruptcy Law

In the current economic climate, community associations have no choice but to deal with bankruptcies being filed by homeowners who are often delinquent in their assessment payments to the association.

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SB 100--"Getting To Know You...."

Everyone, except those lucky few who have been vacationing in the tropics for the last several months, knows that SB 100 is now law. Good or bad, or both, SB 100 will require some adjustment to most associations' practices. To understand SB 100, one must understand the relatively short text of the amendments but also how those amendments will affect the Colorado Common Interest Ownership Act ("CCIOA" which sounds like "KIOWA"). This sounds more difficult than it is, although some of the ambiguities in the statute will keep life interesting for a little while. Now that the dust has settled regarding the bill, we will try to examine the more relevant parts of SB 100 in an easy to understand format. Please stay tuned to our blog for a multi-part series on "SB 100 for the mere mortal." We reserve the right to change the name of the series at any time...

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S. B. 100 - What You Need to Know About Colorado's Newest Law Affecting Common Interest Communities

Introduction
Those of us involved in community associations in Colorado have been closely following the progress of SB 100, a bill introduced and sponsored by Senator Hagedorn and Representative Carroll. On June 6, 2005, Governor Owens signed the bill into law. There were more than 100 changes to the bill during its journey to becoming law. Below, we discuss the many provisions of the new law, and what they mean to community associations in Colorado. For the full text of the law as approved by Governor Owens, click here.

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Sweeping Legislative Changes - Colorado S. B. 100

Almost everybody having any involvement with homeowners associations in Colorado has been following the progress of S.B. 100 in the Colorado legislature this year. On June 6th, Governor Owens signed the bill into law.

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