Colorado Homeowners Association Law Blog

We routinely receive questions related to fair housing issues in common interest communities. Many community association directors and community association managers are aware that both the federal and state Fair Housing Acts prohibit discrimination against certain protected classes of persons in the provision of housing and services related to housing. One of the protected classes is handicapped persons. According to the Fair Housing Act, discrimination includes: (a) a refusal to permit, at the expense of the handicapped person, reasonable modifications of existing premises occupied or to be occupied by such person if such modifications may be necessary to afford such person full enjoyment of the premises; and (b) a refusal to make reasonable accommodations in rules, policies, practices, or services, when such accommodations may be necessary to afford such person equal opportunity to use and enjoy a dwelling.

 Social media sites like Facebook and Twitter are becoming more common methods for American communications. Sites that were once reserved for college students are now used by parents, grandparents, businesses, and movements to keep in touch and disseminate information. Many homeowners associations and condominium associations have joined the new media revolution, with varying degrees of success.

Facebook and Twitter can allow users to customize who can see information posted. While most association governing documents are matters of public record, if an association wishes to post other information, like meeting minutes or budgets, it may wish to limit access to association members. Any association that intends to make full use of the communications aspects of social media should take care to ensure that the site or page is regularly reviewed to grant access to members.

In today’s tough economic times, many associations are struggling to pay their expenses due to several delinquent homeowner accounts and, oftentimes, overlook the importance of enforcing their covenants.

The board of directors for an association has a fiduciary obligation to ensure that homeowners are complying with the covenants contained in the governing documents. Covenant enforcement does not always require an association to take legal action against its homeowners and there are several cost effective ways of ensuring compliance.

Oftentimes, a simple and courteous letter to the homeowner may suffice. If the letter is ignored, the association’s covenants may permit it to assess fines against homeowners for non-compliance. Before assessing a fine, the association must provide adequate notice to the homeowner and further provide to them an opportunity for a hearing before the board or fining committee to permit the offending homeowner to dispute the violation. If the board or committee is convinced that the violation exists, a fine may then be assessed. If a fine is assessed, it is typically beneficial for an association to continue to work with the homeowner to obtain compliance. It is recommended that the assessment of fines be used as a leveraging tool and not as a means of punishing the homeowners.

Occasionally, a fine and warning letters may not compel a homeowner to comply with the covenants. In this case, it is recommended that the association’s attorney send a demand letter to the homeowner. If the attorney demand letter does not result in the violation being cured a lawsuit, if authorized by the covenants, should be filed against the homeowner requiring them to remedy the violation. The association’s covenants may also permit it to enter a homeowner’s property, cure or remove the violation and assess the expenses incurred to the homeowner. As a part of this lawsuit, the association should request a judgment against the homeowner for all or part of the fines assessed and reasonable attorney fees and costs incurred.

One often overlooked method of enforcing the association’s covenants, particularly if the homeowner is a nuisance, is to institute a judicial foreclosure to remove the homeowner from the community. Of course, this option is only available if the homeowner has unpaid fines and assessment fees.

No matter which manner the association proceeds to enforce its covenants, it is recommended that they pursue so diligently and in a uniform manner to ensure that it is not precluded from enforcing its covenants in the future.

You will remember from a recent posting that we discussed the new Fannie Mae guidelines, and the anticipated HUD regulations. As noted,  HUD did in fact adopt new temporary regulations that went into effect on December 7, 2009, and remain effective until December 31, 2010, at which time the new permanent HUD regulations will become effective. The new HUD temporary regulations are found in HUD Mortgagee Letter 2009-46 A, and can be found at http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09_46aml.pdf. The new HUD permanent regulations are found in HUD Mortgagee Letter 2009-46 B, and can be found at http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09_46bml.pdf. It is important to note that condominium projects under developer control and under construction or being converted have different standards. This posting does not address those standards.

The fallout from our current economic crisis is hitting all of us, sometimes in ways we least expect. While many homeowners are struggling to hold onto their homes, many are faced with the prospect of having to sell. In the present economy, that is difficult enough. However, for those whose homes are condominiums, Fannie Mae has implemented new guidelines that can make it more difficult than previously to complete a sale. HUD has adopted similar new temporary regulations which went into effect on December 7, 2009 and remain effective until December 31. 2010, at which time more restrictive permanent regulations become effective.

But we are all just volunteers! We all have regular jobs to do too! They can’t expect us to do everything!

We are surprised by the number of times that we’ve heard these statements from board members when they are being challenged for actions they’ve taken, or decisions they’ve made. However, Colorado law does not make any explicit distinction between board members who are volunteers as compared to board members who receive compensation for serving on the board (such as for other types of non-profit corporations).

With record rainfalls this season, Colorado community associations and managers have stayed busy responding to reports of water intrusion and hail damage. After the immediate excitement subsides, our phones start ringing. Managers and board members typically ask us some variation of the following questions about insurance:

Is the association or the owner responsible for insurance coverage? This question often arises in the context of condominium and townhome communities, and the answer depends on what the governing documents and controlling statutory provisions say. Often, the documents do not give clear guidance on which party bears the burden for insuring specific components, hence the call to the attorneys. The answers sometimes come as a surprise to uneducated owners and even association boards.

We recommend that associations evaluate insurance obligations with legal counsel and their insurance professionals to ensure proper coverage and to enable clear communication with owners about what coverage applies. Through the preparation of insurance and maintenance charts that summarize association and owner obligations, and the adoption of insurance guidelines that state insurance coverage responsibilities and provide step-by-step procedures for reporting and handling claims, associations can proactively educate owners and reduce confusion when losses occur.

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.

We have all heard from time to time about an association manager or officer who gets caught with his hand (or more) in the association’s cookie jar. The most recent account making headlines has to do with a manager in Virginia who has been convicted of stealing $3 million from over 350 different homeowners associations. We shake our heads and are thankful that our association isn’t the victim of such a potentially disastrous crime. But sometimes, it is just a matter of luck that our association hasn’t suffered such a loss, or we are lucky that everybody providing services to the association is trustworthy.

The towing of illegally parked vehicles is a topic that is regularly brought to our attention. In most instances, the problem involves a commercial vehicle, motor home, trailer or truck that that is parked in violation of the Association’s covenants or rules. It may also involve a vehicle that appears to have been abandoned or is not properly registered with the State of Colorado. In more egregious instances, the vehicle is parked illegally in a designated handicap parking space or fire lane. In any instance, the question is: “Can we tow the illegally parked vehicle?

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

Why are we writing about swimming pool safety in the fall? One reason only – the Virginia Graeme Baker Pool and Spa Safety Act. Effective December 19, 2008 this federal law requires that homeowners associations with community pools take certain actions intended to reduce the risk of injury caused by the pool’s drainage and suction systems.

Times change, people change, laws changes, can your covenants change too? The simple answer to this question is yes, they can. Two of the most frequent questions we get is how is this done and when should we consider it? Below are our answers to these questions.

When Should Your Covenants Be Amended?

At WLPP we don’t believe there is any hard and fast rule as to when your covenants should be amended. In general, we recommend that they be reviewed at least every ten years to make sure that they are up to date with current laws and practice. However, a sooner review may be warranted whenever there are significant changes to Colorado law addressing homeowners associations (for example, Senate Bill 05-100). There may be terms that are no longer applicable to your community, outdated restrictions, or terms that no longer comply with current law. 

I have now used up another 10 seconds of my allotted 15 minutes of fame. I had the opportunity this week to be interviewed by a local television reporter who was doing a story about a property owner and his dispute with his homeowners association. Unfortunately, it is difficult to give complete and in-depth coverage of an issue when there is a limited amount of time available, especially in light of other pressing news like our country’s current financial melt down. However, the topic raised by the reporter does warrant further, in-depth examination, at least by those involved with the operation and management of their community associations, as well as those governed by them.

Sometimes we get inquires from owners and managers unfamiliar with Colorado law addressing homeowners associations. This article is intended as an introduction to the field of community association law in Colorado. Feel free to contact one of our attorneys if you have any questions regarding the application of CCIOA to your community.    

Homeowners Associations in Colorado

Homeowners associations are entities organized to govern the operation of common interest communities in Colorado. They are generally created by the developer (also called the declarant) of a new community and organized before the first unit is conveyed to a purchaser. Most commonly they are organized as nonprofit corporations, although they may also be organized as for-profit corporations or LLCs.

"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.

The migration away from paper products is a hot trend these days. The benefits of such a move for a homeowners association are clear - not only does it save trees, it also saves money (less paper, postage, and storage costs). In short, being green saves green. But can an Association truly become paperless? Not yet, but as computer technology and the use of the internet become more and more advanced, the answer is closer to becoming yes. Below are some steps your Association can take to start freeing itself from the paper weight:

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

Community association board members fill tough roles that require a great deal of attention to association business. We understand that, as board member volunteers, you need guidance from professionals to facilitate informed decision-making, allowing you to uphold your fiduciary duties to the association that you serve. To assist you in evaluating the legal priorities for your community, we have created this Legal Audit checklist. Place a check mark in the box beside each statement that applies to your community association--and don't forget to complete Part 1 of the Community Association Legal Audit.

My community association has . . .

?   checked that the assessments charged to individual units match the allocated interests stated for those units in the association’s governing documents.

Associations must assess individual units for budgeted expenses in accordance with the allocated interests stated in the governing documents. When we advise clients of discrepancies that we note in unit assessments and allocated interests, we sometimes hear, “We’ve always done it that way; that’s what people are used to.” If the governing documents do not align with the association’s manner of assessing owners, then past mistakes do not support future disregard for the documents.

Exclusivity contracts are often used by providers of video programming distributors (think cable providers) to obtain the exclusive right of access or the exclusive right to provide video service in a community. On November 13, 2007, the FCC entered its order banning exclusivity contracts between cable operators (and other multi-channel video programming distributors) and multiple dwelling unit developments. The definition of multiple dwelling units developments includes condominiums, cooperatives, and communities of single family homes. The final order from the FCC has still not been published. However, in the mean time, you can view a summary of the FCC order here, and comments, prepared by the Community Associations Institute. This action by the FCC is consistent with its belief that communication providers (internet, wireless and cable) should be subject to the greatest possible competition in providing their services, and that consumers generally benefit from that competition.

We’ve written before about how the Fair Housing Act applies to common interest communities. Unfortunately, there are some (maybe many) homeowners associations and condominium associations that still don’t understand the importance of this federal law and its state counterpart, the Colorado Fair Housing Act, or if they understand, they don’t believe it applies to them. Here is a recent story of a condominium association in Hawaii that found out otherwise.

Community association board members fill tough roles that require a great deal of attention to association business. We understand that, as board member volunteers, you need guidance from professionals to facilitate informed decision-making, allowing you to uphold your fiduciary duties to the association that you serve. To assist you in evaluating the legal priorities for your community, we have created this Legal Audit checklist. 

Sometimes unexpected things happen that require the special attention and input of the members of your Association. If a matter pops up that can’t wait until the next annual meeting, a special meeting is in order. When this happens, the question we often are asked by Boards and managers is: What type of notice must we give the members before a special meeting?

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

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.

A CHECKLIST FOR BOARDS TO FOLLOW

1. Check your governing documents: what is required for the Association under your Declaration, Articles of Incorporation and Bylaws?

A. Also, what optional coverage are you authorized (by the documents) to consider?

B. What insurance coverage must the Owner have?

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

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

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

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

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

Board members and managers often ask us to explain the fiduciary duties of board members to the community associations that they serve. We have compiled some information to guide directors in their roles. As you read this information, you will discover that, at the most basic level of decision-making, directors must make reasonable decisions after considering the information available. In advising boards, we recommend that directors try to recognize the emotions involved in a given situation and avoid letting the emotions, rather than the facts and interests of the association, guide the decision-making process.

What is a fiduciary?  Webster's Dictionary defines "fiduciary" as follows:

adj. of, relating to, or involving a confidence or trust: as a : held or founded in trust or confidence b : holding in trust c : depending on public confidence for value or currency

Fiduciary duties arise from special relationships that the law recognizes.  Examples of fiduciary relationships include doctor-patient, attorney-client, trustee-beneficiary, and board of directors-corporation. 

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

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

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

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

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

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

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

When townhome or condominium owners do work inside or outside of their unit, it could impact the Association. Some issues that need to be discussed and addressed if they will affect the Association are:

1.         Will it adversely affect building systems? Example: might water overflow to another unit?

2.         Cosmetic issues: will it affect the exterior? Set standards for style, materials, etc.

3.         Mechanic lien issues and claims which could be brought against the Association as a result of the work.

4.         Insurance issues: should contractors have insurance?

5.         Noise, inconvenience, mess, dust, and debris disposal may cause problems for neighbors.

6.         Costs may be incurred to supervise the work.

7.         Is all future maintenance and repair to be at the owner's expense?  If so, a written and recorded agreement may be needed to protect the Association. 

8.         Environmental issues. Example: asbestos removal by an owner in a pre-1980 building could force evacuation of the building's residents.

Legal Tip:  Most governing documents require owners to get approval if they plan on doing work that will affect the Association. 

Many states have enacted Megan's Laws which allow for public notification of convicted sex offender presence within the community.  In Colorado, individuals may obtain information about sex offenders through the Colorado Bureau of Investigation's website and through local law enforcement.  The CBI website permits any private citizen to search his or her zip code and find the whereabouts of sex offenders that fall into the following categories: sexually violent predator, multiple offender, and failed to register.  Other sex offenders are not listed on the website but citizens may request their information from local authorities.

In some cases, where the court determines that the sex offender poses a predatory risk to the community, the court may require community notification of the offender's presence.  Community notification consists of a community meeting to which community members, schools, senior citizens, and recreation facilities in the area where the sex offender intends to locate receive a direct invitation.  At the community notification meeting, local law enforcement personnel present educational information about sex offenders, risks to the community, and cautionary steps that parents and children may take to protect themselves, and then reveal the identifying information about the sexually violent predator.  Community notification only occurs in the most extreme cases.  In most, if not all, cases, offenders are only released into the community after they have served a criminal sentence, undergone evaluations, and participated in some form of rehabilitation. 

The good faith acts of directors of profit or non-profit corporations which are within the powers of the corporation and within the exercise of an honest business judgment are valid.  Rywalt v. Writer Corp, 526 P.2d 316, 317 (Colo. App. 1974).

It is educational to review the Rywalt case, above, to show the deference the courts will give to Board decisions. In this case, a group of homeowners sued the Association in an attempt to prevent the Association from entering into an agreement with the developer to build a second tennis court on the common area close to the plaintiffs' homes. The cost of the tennis court would be borne by the developer. The plaintiffs argued, among other things, that the Association's decision was arbitrary and capricious.

One thing about this business – it is full of surprises. One surprise that occasionally comes to light during our course of representing an association has to do with how common expenses are shared. The declaration of restrictive covenants (which imposes the obligation to pay assessments) should describe how expenses of the association are allocated. In fact, CCIOA mandates that the declaration must allocate the various types of allocated interests: the allocation of voting rights; the allocation of burden of common expenses; and in condominiums, the ownership of the undivided interests in the common elements. In a couple of cases recently we’ve discovered that an association is allocating common expenses in a manner that is different from how the declaration specifies.

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

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

Issue: A large homeowners association is looking to make repairs to the common area fences within the community. What options are available to them to finance this project?

Background: Recently, the Board of Directors of a large homeowners association called our office to discuss a problem. It seems that they had common area fences that were fairly old and in desperate need of some TLC. Unfortunately they did not have any funds available to make the necessary repairs.    Pursuant to the Association's covenants, the Board was severely restricted in the amount it could set for the annual assessments each year (without approval of at least 2/3 of the members, the covenants limited the annual assessment to a 10% increase from the previous year). As a consequence, the Association's reserve fund was nearly empty. The Board had tried on several occasions to get the members to approve a special assessment, but it was turned down each time. The Board was now wondering what options it had available to pursue.

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

Occasionally, we’ll hear from an association’s board of directors about how proud they are that they haven’t had to raise assessments for some period of time – 10 years, plus or minus. Typically, they are touting what great stewards they have been of their members’ money, and how grateful the members should be. Oftentimes, the comments come in the heat of candidacies for election of members to the board of directors. Sometimes, they even wonder out loud why their members don’t appreciate the money saving efforts of the board. What they are missing follows.

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

Today, community associations are being challenged to provide services for the full breadth of members. A challenging area is accommodating the needs of disabled members.  The Fair Housing Act require associations to make “reasonable accommodations” for those with needs. The goal of these laws is to make it possible for a disabled person to live within the community by granting and maintaining an exception to the rules of the Association.   An example of such an exception would be to the parking rules.

As legal counsel for community associations, we assist our clients with the various types of conflict that arise in the course of association business activities.  We understand that conflict can sometimes escalate to a level that requires court intervention.  We also know that certain preventative steps can help to alleviate the time, expense, and emotional drain that come with litigation.  In particular, good contract drafting can help to minimize the impact of disputes between associations and their contractors.  We encourage our clients to seek legal advice when entering into contracts for management services, landscape maintenance, capital improvements, and any other project or service that involves a relationship with an independent contractor.  The following reminders come directly from our experience advising community associations:

A bid or proposal form, while legally binding, is not a good contract.  While signing a bid or proposal form may bind the association to pay for services performed by the contractor, the association does not receive any protections as part of the bargain.  We recommend contracts that contain specific provisions which, at the very least, address the scope of work, insurance coverage, payment terms, remedies for default or breach, and attorney fees for the prevailing party in any dispute that may arise under the contract terms.  Bid forms do not typically include these recommended contract terms.

The pool has only been open a week but already you have started to receive some complaints from the community about noise and roughhousing. If you already have a policy regulating pool use, you can breathe easy and follow the guidelines that the Association has in place to handle noise and unacceptable behavior, assuming, of course, that those guidelines have been approved by the Board of the Association and reviewed by your Association's attorney. Just make sure that you apply all rules in regulations in a fair and consistent manner.

Over time, we've noticed that those who deal with common interest communities (homeowners and condominium associations) may regularly take for granted that everybody knows and understands what these communities are and how they function. We are as guilty of this as anyone. However, in a recent message from CAI (the Community Associations Institute), we were once again reminded that what is so common to us, may not be to others. So, borrowing from CAI, we are looking to help provide understanding.

We have blogged here before about homeowner discontent with associations and the effect that discontent can have on the morale of volunteer board members and community association professionals. In a blog entry last week , CAI's Chief Executive Officer Tom Skiba addressed the very same topic, echoing many of the sentiments expressed here.

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

When you began your position on the Board of your community association, you probably thought about what you, based on your life experiences, might be able to bring to the Board. Perhaps you are an accountant or a contractor. Perhaps you are an attorney or a landscaper. Due to the diversity of issues you will address on the Board, nearly every profession or trade has something to bring to the Board table.

Have you just been elected to your community association's board and you have no idea how to tackle elections, homeowner complaints, and general board decisions? Or maybe you have some idea but you need want a little more guidance?

1. Review your association's position on rights and responsibilities.

When associations, owners, and residents recognize and take ownership of their respective rights and responsibilities that flow from living within one community, all parties tend to benefit. The Community Association Institute (CAI) provides information on rights and responsibilities and even provides recommendations for implementation.

2. Take an interest in the public's perception of homeowner associations.

The numbers are in. People enjoy association living! Community associations provide stable, comfortable, and pleasant living for millions. If you believe Associations have a positive impact on your homeownership or on community don't let your voice be drowned out by the vocal minority. The concerns of unhappy homeowners should certainly be addressed by associations as they work to build strong communities, but they should also be tempered by the masses who would come out in favor of association living.

3. Take responsibility.

Most people can agree that less legislation and fewer mandates set in place against associations would be preferable. Not because associations do not want to govern responsibly, but because the cost of hasty legislation can sometimes outweigh its benefit, especially when so may associations already govern in responsible manners. How can we avoid legislation? By continuing to govern responsibly by urging all others in our industry to do the same, and by showing that not only do associations strive to meet the minimum level of responsible governance required by statute but they also push beyond the minimum to provide the best level of governance possible.

4. Learn, learn, blog.

In keeping with the spirit of pushing the envelope beyond what is required by statute, association volunteers and professionals should continue to seek out information about community associations at the local and national level and stay abreast of new developments. One great way to do this is through the numerous blogs that focus on community associations. If you're reading this, you already know about our blog, but there are many others. Ungated is a blog sponsored by CAI. The Community Associations Network also sponsors several interesting blogs. Approach blogs with some caution as they are essentially unrestricted publishing, but don't shy away. They often provide a wealth of information and opinions, as well as a platform to communicate with others about how they have approached the very situations you may now be facing. Blogs have created a national conversation among those interested in community associations—consider yourself invited to participate.

5. Focus on community.

We thought a focus on communities was so important that we actually made it our firm motto: "Focused on Communities." Community is truly the key word in "community association" and the more we focus on that as we govern, manage, or counsel associations, the better our communities will become.

As we approach the end of 2005, we reflect a little on this past year's developments, not the least of which was passage of S.B 100. When the year started, and the bill was introduced, many in the common interest community industry assessed the bill and wondered why our legislators felt it was necessary. As it wended its way through both State houses, and ultimately to the Governor's desk, it gained momentum, seemingly in stark opposition to what many outside of the State houses believed was necessary for mandatory governance of a common interest community. However, there seems to be significant concern with how community associations operate from those outside the industry to cause its passage. Here is an example of why.

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.

Be prepared. We've all heard that that is the Boy Scout's motto. However, it should also be the motto of your community association. We are all witnessing the devastation of Hurricane Katrina on the southern states of our country. And, while hurricanes are not a threat to our fine state, we all know that we have our own types of severe weather.

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.

SB 100, which is formally known as the act "Concerning Increased Protection for Homeowners," may change the way your association handles the rights of owners to participate during association meetings. For purposes of this discussion, there are only two types meetings that are relevant—meetings of owners and meetings of the board of directors.

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

Community association Boards have experienced a rash of bad publicity from the local media and from the Colorado legislature. Board meetings of some associations are lasting longer than ever and often contain more strife and animosity. The task of running an association is becoming increasingly complex as well. In some cases, both Board members and owners lose sight of their ultimate goals—to administer the common elements and to promote the best interests of the residents in the community. A general outline of principles may bring the parties' respective objectives back into focus.