Whose Land is it Anyway? And Why do we Care?

We frequently hear people say that common areas are owned by their association. And, while that is true in many cases, it is not true when referring to condominiums. In fact, the single fact distinguishing condominiums from any other type of common interest community is how the property making up the project, other than the individual units, is owned. Continue Reading Posted In Governance
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This Lawyer is Not a Plumber: Are you hiring the right professionals to serve your association?

I’m the granddaughter of Midwestern dairy farmers who grew up during the Great Depression, and my parents own a small town HVAC/plumbing business. As a child, I often heard some version of the following: “I can make that.” “We don’t need to hire someone. I can fix it.” “Why would we pay someone for that work? I can do it myself.” With this do-it-yourself attitude ingrained in my psyche, I can’t help but feel guilty when I need to call a plumber to unclog a drain or when I hire someone to clean my house. The frugality—and wherewithal—that my parents and grandparents modeled for me certainly left an impression. Yet I’ve also come to realize that my life sometimes requires different choices.

Yes, I can play plumber and unclog a sink drain. I’ve done it: I’ve gathered the equipment, removed U-traps, brushed pipes clean, disposed of clogged pipe nastiness, and put everything back together. Sometimes I’ve succeeded. But on other occasions I’ve removed the drain stopper and struggled to get it reconnected, or, as one of my college roommates will recount, my work has resulted in leaks where I could not get the old mismatched pipes to fit securely. Yes, I’ve played plumber and channeled my inner DIY-er, but I’m not a plumber. I would not offer to fix someone else’s drain, and I most definitely would not venture into my HOA’s clubhouse armed with a plunger and pipe putty.

Continue Reading Posted In Governance , Money Matters
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Where do governance policies come from?

I recently prepared a package of the nine mandatory policies for a community association. The board of that association read the policies very carefully and sent back a number of questions, asking why I had drafted various provisions the way I had, or why I had included them at all.

When drafting the mandatory policies, there is no single source. The “nine mandatory policies” or “SB-100” policies originate from Senate Bill 05-100 signed into law in 2005. Originally there were seven mandatory policies, with the dispute resolution requirement added in 2006 and the reserve study requirement added in 2009. Since SB-100 became law there have also been many other additions and amendments to the Colorado Common Interest Act (CCIOA) and Colorado Revised Nonprofit Act that affect these policies.

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Where's my Money?

It is not uncommon for homeowners to wonder where all their dues are going.  Some owners might see their dues go up with no visible changes to the property and even get suspicious.  Of course, associations often bear a lot of expenses that are not directly related to property condition, such as insurance, management, and legal fees.  Nevertheless, owners have the right to know what their association is doing with their assessments.

If a homeowner wants to know where the money is, he or she should first request the association's annual financial statements.  These statements are an association record, and the owner has a right to view them.  The Colorado legislature intends that these statements be available at no cost to the owner, so it is advisable for associations to keep them readily available in an electronic format.

If the annual financials do not satisfy the owner, an audit or review may be an option.  Audits are performed at the discretion of the board, but members are empowered to demand audits in limited circumstances.  If the association has annual revenues or expenditures of at least $250,000.00 and at least one-third of the owners request the audit, the Association must obtain an audit using generally accepted auditing standards, performed by a certified public accountant.  If the Association has revenues or expenditures below $250,000.00, a third of the owners are entitled to demand a review, rather than an audit.

Audits are expensive, and if you find yourself in a situation where owners are requesting an audit or review, listen to the request.  There is a reason for the dissatisfaction, and if the association has properly conducted business, the audit or review will support the board's conduct.

Posted In Governance , Money Matters
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Failing to Reserve and Deferred Maintenance is a Recipe for Disaster

If you have ever served on the board of directors of an HOA, you know that some members are never happy to see their annual assessments increased.  In fact, some folks can be downright hostile when faced with an increase.  This can even be true when an assessment increase is absolutely necessary to adequately fund reserves to be financially prepared to handle major repairs and replacements to association common elements.   

When boards are unwilling to propose essential assessment increases or members are unwilling to ratify budgets with these increases, it is not uncommon to see a couple of things happen.  First, these associations tend to defer routine maintenance on common elements which reduces the remaining useful life of components like roofs, siding and asphalt.  Second, these associations may not have enough funds in reserves to cover the costs associated with these major repairs and replacements.  In such cases, without levying a special assessment or obtaining a loan to cover the associated costs, the infrastructure of these communities will begin to erode and eventually fall apart.

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Flying the American Flag in Observance of Memorial Day

As we contemplate the observance of Memorial Day, we need only briefly look at the news to be reminded of how lucky we are to live in the United States of America.  As we witness the repression in other countries that is unimaginable to most of us, we must remember the men and women serving in the United States Armed Forces who have died to protect the freedoms we sometimes take for granted.

In addition to attending Memorial Day services, many Americans honor our fallen members of the military by flying the American flag or service flags.  While it is rare that HOAs will prohibit the flying of these flags, here is an important reminder to those living in Colorado about the right to display the American flag and service flags in associations.   

american flag photo: american flag american-flag-3.jpg 

 

 

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Spring and Summer Tips for HOA Living

Okay – so the nicest thing I can say about the snow we had on Mother’s Day is that it was really annoying. However, regardless of our quirky Colorado weather, spring really is here! That means HOA boards and residents need to anticipate and avoid common pitfalls and controversies that can arise as we spend time outdoors during the spring and summer. Here are some important tips to keep in mind:

Continue Reading Posted In Covenant Enforcement , Governance
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Annual Education? Do You Comply?

 We sometimes receive questions about the owner education requirements required by the Colorado Common Interest Ownership Act (CCIOA), and what it takes to comply. CCIOA says that the association must provide, or cause to be provided, education to owners at no cost on at least an annual basis as to the general operations of the association and the rights and responsibilities of owners, the association, and its executive board under Colorado law. The criteria for compliance with this section shall be determined by the executive board.

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Full Disclosure: How much is too much?

Community associations often deal with situations that they must disclose to buyers or lenders as part of the documentation provided in a real estate transaction. Typical disclosures that associations must give include (1) whether the association is involved in litigation and (2) whether a special assessment has been levied. Litigation and special assessments seem easy enough to disclose. But the obligation to disclose, or the liability for not disclosing, is less clear with respect to threatened litigation or a special assessment under consideration but not yet approved. Associations should consult with legal counsel when a situation does not fall squarely within the mandatory disclosure categories. Failure to disclose may result in liability for the association, but giving too much information can also cause problems for an association.

As examples, associations tread into murky disclosure areas with respect to the following areas:

Ongoing disputes between the association and a particular owner or group of owners that does not involve litigation. In general, associations should neither hide nor embellish the facts regarding an unhappy owner’s impact on the community. A protracted dispute, much like a potential lawsuit or special assessment, is not a mandatory disclosure for associations or sellers.

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The Advantages of Transparency

WLPP attorney Doug Stallworthy recently wrote a post on transparency in association boards. His thoughts follow.

Transparency in decisions made by the board of a homeowners association fosters a sense of confidence in those decisions.  By following correct procedures for meetings on all issues, whether simple or complex, both the board and members will gain a familiarity with the process, and members may understand how complex the issues faced by a board really are.

When residents contact a board member about an issue in the community, the board member should always refer them to the HOA manager, ask the resident follow complaint procedures, or raise the issue at the appropriate time in an open meeting.  Board members should not give opinions or make decisions outside of a meeting. Open meetings allow the board as an entity to discuss an issue, and receive comments from interested members.

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Compliance and Consistency in Collections

By now, your association should have a new collection policy in place that complies with the new HOA collection law that went into effect on January 1, 2014. When adopting a new policy, the association should not only ensure its compliance with the new law, it should also make sure it is consistent with its other governing documents. As I discussed in a previous blog, it is important that the association’s governing documents are consistent with one another and most importantly, with the Declaration. While the policy can add or elaborate specifics about the collection procedures, it cannot contradict the terms of the Declaration or the new law.  Should you have any questions regarding your collection policy, please feel free to contact us.

Posted In Governance , Money Matters
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Who needs reserves?

If there is one thing people hate almost as much as an assessment increase, it is properly funding reserves.  Some owners look at those lonely accounts, chock full of unused cash just sitting there, and think, "Hey, let's use that money now! That way, we don't have to raise assessments this year!"  Other owners look at the reserves and wonder if perhaps it's okay to defer reserve contributions until a time when finances loosen up.

Hogwash. 

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Selective Enforcement - Why's Everybody Always Picking On Me?

Many times when enforcement action is started against an owner in a community, the first response is “Why are you picking on me? Everybody else is/has [fill in the blank – painted their house without ARC approval; installed new windows without ARC approval; modified their landscaping; left their trash cans out, etc.]” Then the formal response is accompanied by a dozen pictures of other homes in the community that have the same, or similar, violations. Face it, everybody who receives the enforcement letter from their association feels like they are being singled out, because they know at least one other person who has done exactly what they are accused of doing, and that other person hasn’t been reprimanded. Or have they?

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Are You Feeling the Love?

For many folks, Valentine’s Day is traditionally thought of as a day of roses, chocolate, stuffed bears, hugs and kisses. I would like to get a bit off the traditional track of Valentine’s Day and wonder aloud if you are feeling the love in your HOA. So are you?  

As homeowners, residents, board members and managers in HOAs, what does it mean to “feel the love?” Obviously, we are not talking about romantic love. Instead, I believe this means that our thoughts and concerns are actually being heard when we express them. If someone doesn’t agree with our point of view, at the very least we are treated with respect. We reach out to each other to constructively discuss and work through conflict and do not resort to sending nasty grams or lodging personal attacks or threats at meetings. We do not make assumptions. Instead, we do our research first and ask questions before jumping to conclusions and reacting. We tell the truth in a constructive way and do not hurl insults. 

 

What steps can your HOA, the homeowners and residents take to ensure everyone in your community feels the love? Since a peaceful and harmonious community is so vital to our happiness and even health, I think this question is worth a few moments of reflection. 

Posted In Governance
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HOA Information and Resource Office Releases 2013 Annual Report

Earlier today the Colorado HOA Information and Resource Office released its 2013 Annual Report. Interestingly, the number of complaints more than doubled - from 576 in 2012 to 1,248 in 2013 - but the number of people logging complaints only increased slightly from 309 complainants in 2012 to 327 in 2013. The most complaints in 2013 related to association and management communication with homeowners (or lack thereof), which moved up from fourth place in 2012. The report contains other details about the number and types of communities registered with the Office, and the outreach work that the Office undertook in 2013.

For those of us who work with community associations on a daily basis, the report contains few surprises. Even so, the trends revealed in these annual reports are important to consider because they can sometimes have an influence on legislation and regulations affecting community associations. 

The report is also a good reminder for boards to ensure that owners and directors receive their annual education, as mandated by the Colorado Common Interest Ownership Act. Education can help prevent problems and complaints in your HOA. Our "CCIOA 101 for HOA Boards" blog series is a great resource for board members to learn about basic association governance laws. In addition, our attorneys work with association clients to prepare board and owner education classes tailored to an individual community's needs. Contact one of our attorneys directly if you have questions about education options.

 

 

 

 

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Protection for the Board - D & O Insurance

 We receive many calls from board members of homeowner association clients inquiring about complaints made by unhappy members of their communities and threats of lawsuits against the directors. The complaints run the full gamut from failure to enforce the governing documents, to unfair enforcement of the governing documents, to failure to abide by the governing documents or CCIOA, or any of a number of other complaints. Being a lawyer, I generally answer their question with one of my own – “You do have D & O insurance in place, don’t you?” I get a little worried when the answer is another question – “What’s that?”

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2014 New Year Resolutions for HOA Boards

Happy New Year from all of us at Winzenburg, Leff, Purvis & Payne! As we begin 2014, I thought I would continue with my annual tradition of providing HOA boards with New Year resolutions for consideration. This year, please consider the following resolutions with a focus on building community and putting a halt to disputes before they get out of hand.

1. Commit to Transparency. While open meetings for HOA boards are the law of the land in Colorado, some HOA boards utilize “working sessions” in an attempt to get work done without interruptions. While working sessions should not be utilized to take formal action and one could argue do not constitute a “formal meeting,” shutting members out of these meetings could result in a perception that the board has something to hide. As a result, with the exception of permissible executive sessions, commit to ensuring that all meetings are open to the members and utilize your Conduct of Meetings Policy to avoid inappropriate interruptions.  

 

2. Ensure that Members Have an Opportunity to Speak Prior to the Board Taking Formal Action. While meetings of the board are business meetings and members should not be permitted to inappropriately interrupt the work of the board, it is also important to remember that Colorado law permits members to speak prior to the board taking formal action on a matter. As a result, in addition to an open forum at the beginning of a meeting, make sure that owners are permitted to speak to an issue prior to the board voting to take formal action.  

 

3. Use Surveys and Special Member Meetings to Obtain Essential Input. When considering a tough issue that could be controversial or significantly impact the members, utilize a survey to educate the members on the issue and to obtain their input prior to taking formal action. If the issue is truly a hot button, you should also consider holding a special meeting of the members for the purpose of explaining the issue fully, answering questions and obtaining essential input.

 

4. Use Mediation to Address Disputes Before They Blow-up. There is no question that when left unaddressed, small disputes between members and their associations can fester and blow-up into ugly disputes. Don’t let this happen! Utilizing an independent 3rd party to mediate a dispute can get to the heart of the problem and resolve the dispute before it becomes destructive. There’s no doubt about it, mediation can be a cost-effective and positive way to resolve disputes.

 

By implementing these easy New Year resolutions, HOA boards can take essential steps to promote a harmonious and productive 2014! 

Posted In Governance
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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.

Continue Reading Posted In From Capitol Hill/Legislation , Governance , Money Matters
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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.

 

Posted In From Capitol Hill/Legislation , Governance , Money Matters
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Constructively Managing Conflict in HOAs: Tip #4

As we near the end of our examination on how to constructively manage conflict in HOAs, let us take a moment to review the first three tips we have covered:

Tip #1: Be Real About What Is Bothering You

 

 

Tip #2: Listen, Listen, Listen!

 

 

Tip #3: Folks in a Conflict Must Strive to Use Neutral Language and Tone

 

 

These first three tips will be most effective if every individual engaged in the conflict is willing and committed to looking at their personal agenda, taking a moment to really listen to where the other person is coming from and to act like an adult in their interactions.

 

While utilizing these interpersonal skills should go a long way to resolving conflict, it may not be enough. As a result, the folks involved in the conflict should seriously consider the next tip:

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Constructively Managing Conflict in HOAs: Tip #3

As this series of blog entries continue to analyze what homeowners, board members and managers can do to constructively handle conflict in HOAs; we have already stressed the importance of folks understanding what is at the heart of a conflict and the importance of really listening to what the other individual is saying. However, the importance of using good interpersonal skills does not stop there.

Tip #3: Folks in a Conflict Must Strive to Use Neutral Language and Tone

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Constructively Managing Conflict in HOAs: Tip #2

For those of you who follow our Colorado HOA law blog, you know that last week I started a series of blog entries aimed at providing tips on how to constructively manage conflict in HOAs. I’m convinced that if homeowners, board members and managers keep these tips in mind, it will give everyone involved a real chance at resolving conflict before things get out of hand. 

Tip #1 from last week, was “Be real about what is bothering you.” Here is Tip #2 for your consideration:

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Constructively Managing Conflict in HOAs: Tip #1

You are probably no stranger to conflict if you have served on the board of, managed or lived in an HOA. We all assume that conflict is bad and something that should be avoided at all costs. In fact, I don’t know many folks who are actually comfortable with directly facing conflict. However, when handled properly, conflict in the HOA setting can actually be a blessing in disguise. Conflict can bring issues out into the open to be constructively reviewed and resolved. 

For conflict to be handled appropriately, both boards and homeowners must do their part. This series of blog entries will focus on important steps both parties should take when dealing with conflict. So here we go:

 

Tip #1: Be Real About What Is Bothering You

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Basic Enforcement Concepts for HOA Boards

Lately I have been running into folks who have had a lot to say about how boards of HOAs are enforcing use restrictions in the declarations for their communities (commonly referred to as "covenants") and the rules and regulations which I will refer to as the "rules."  While there are always two sides to every story, I thought it would be useful to to address some basic concepts which every board should be aware of when dealing with enforcement issues.   So here we go:

1.  Boards have a fiduciary duty to enforce the use restrictions in the declaration for their HOAs and the rules.  Owners have a legal obligation to comply with the use restrictions and rules.

2.  While Boards have the duty to enforce use restrictions and the rules, boards also have the authority under Colorado law to examine the unique circumstances behind particular violations and to exercise their reasonable business judgment on a case by case basis to determine whether to enforce or how far they should go with enforcement.    

3.  As a general rule, board members are also homeowners in their associations.  That means the board members also have a legal obligation to comply with the use restrictions and rules.   Compliance for board members is not optional!  In fact, if board members are not in compliance, how can they expect to require or enforce compliance from other owners?  Also, board members should be careful not to inappropriately give preferential treatment to their neighbors, family or friends. 

4.  Boards do not have the authority to levy a fine against an owner for a violation unless they first give that individual notice of the alleged violation and an opportunity for hearing to determine whether the violation occurred. 

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Addressing and Not Avoiding Conflict in HOAs

Earlier this week, I was asked by the Alternative Dispute Resolution Section of the Colorado Bar Association to participate in a luncheon conversation about the use of mediation in HOA disputes.  We talked about the types of disputes which can occur in HOAs and the importance of mediators understanding the role of the governing documents and Colorado law in the HOA context.  However, I found the experiences shared by mediators who have actually mediated HOA disputes to be the most interesting part of the conversation. 

While the mediators obviously gave no details of the parties involved or the particulars of any dispute which they mediated, they did share the cathartic affect of giving owners and board members the ability to vent their frustrations and express how they really feel about the dispute.  These mediators recognized that underlying many disputes in HOAs is the need for folks (both homeowners and board members) to truly be heard, respected and recognized as having vaulable input. 

I think it's fair to say that many of us are extremely uncomfortable with conflict.  As a result, we tend to avoid constructive and important conversations early on in a dispute.  Unfortunately, this often results in an escalation of the dispute and increased anger, frustration and mistrust between the parties.  As a result, for your consideration, I would like to recommend that both board members and homeowners make a commitment early on in a dispute to really listen to each other, to treat each other with respect and if necessary to agree to disagree in a constructive and respectful manner.  I suspect this commitment may go a long way to reducing destructive disputes in HOAs. 

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Does a Casserole Cure a Covenant Violation?

Jase Robertson, a star of the hit show Duck Dynasty, got a bit sideways with his HOA for burning leaves and keeping chickens in his yard. As you might expect, Jase was sent covenant violation letters and seems to have been fined for these violations. 

In an attempt to “flush these rules down the commode” and get "creative,” Jace and members of his family (armed with a casserole) attended a meeting of their HOA Board to discuss the issue. When his time came to speak, Jase stated that: “We are endowed by our creator with certain unalienable rights – life, liberty and the pursuit of happiness. Chickens make me happy. They get insects. They fertilize your yard and if anything goes wrong, you can put them in a pot!” 

 

The Board President calmly and professionally informed Jase that when he bought his home he signed a document stating that they are not allowed to burn leaves in their yard or keep chickens. Jase, understanding the governing documents of his association covered these issues, stated: “They got me. I signed the contract. I didn’t know that was in there.”

 

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Recording Meetings - Should We or Should We Not?

 Does your Board record its meetings, either with audio recordings or video recordings? Do you allow members who are present to record meetings? Do you know? Do you care?

With all the discussion and action in recent years focused on transparency of association operations, it might seem like recording meetings, or allowing them to be recorded is consistent with notions of transparency. However, that is often not the case. When your association has not thought about this topic, too often the result, when the Board discovers that a member is recording the meetings, is uncertainty, and then the call to the association’s lawyer’s office to find out what is allowed, not allowed, and what can be done

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Let's Start a Poop Patrol Revolution!

If you have followed my summertime blog entries over the past couple of years, you know that I love dogs! In fact, my husband and I are the proud parents of a lab and two adorable beagles. While I love dogs, I have to tell you that I DO NOT love dog poop. Frankly, it’s fair to say that one of my pet peeves is when dog owners are not responsible and do not pick up after their canine kids.

Lily and Finnegan are always responsible poopers!

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Happy Flag Day!

Today is Flag Day and the 238th birthday of the United States Army!  There is no question in my mind that the vast majority of HOAs in Colorado recognize the importance of allowing residents to express their patriotism by displaying the American flag and service emblems.  However, as we observe Flag Day and prepare for the July 4th holiday, now is a great time to remind HOAs about applicable Colorado law.  Here's what you need to know:      

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Breaking Through These Times of Trouble

As everyone who has been within fifty feet of me during the college football season is well aware, I am a proud alumna of the University of Oklahoma.  I arrived in Norman two years after the bombing of the Murrah building; two years after my arrival, I witnessed the May 3, 1999 F5 tornado that destroyed Moore.  Today, I watch the news and worry about my friends and loved ones who have been impacted by the most recent storms.  While I was born and raised in Colorado, I will always be a Sooner.

Of course, as a community association attorney, I also see this destruction as a crucial lesson for my clients.  It's important that association boards understand and recognize the impact that natural disasters can have on their communities, and prepare accordingly.

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The Fair Housing Act - The More Things Change, The More They Stay the Same

 We’ve written many times about the Fair Housing Act and assistance animals, most recently on April 29, 2013. Little did I know then that, just four days previously the U.S. Department of Housing and Urban Development had issued Notice FHEO-2013-01 addressing service animals and assistance animals for people with disabilities in housing and HUD-funded programs, a copy of which can be found here.

We’ve discussed in the past that the Fair Housing Act differs from the Americans With Disabilities Act (“ADA”), in that the ADA, with certain exceptions, typically does not apply to homeowners associations, which the Fair Housing Act often does. We’ve also discussed that the U.S. Department of Justice has published a fact sheet describing changes to the ADA rules relating to service animals. Those rules essentially said that a service animal was a dog that had been individually trained to do work or perform tasks for the benefit of an individual with a disability, and excluded emotional support animals.

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Fair Housing and Assistance Animals

 We’ve written many times about the Federal Fair Housing Act and its applicability to community associations. One of the more frequent questions that we have to deal with is residents requesting permission to keep their assistance animals. 

In Colorado and under the Federal Fair Housing Act, it is unlawful to refuse to make reasonable accommodations in rules, policies, practices or services when the accommodation may be necessary to afford a disabled person an equal opportunity to use and enjoy a dwelling unit, including public and common areas. This applies as well to enforcement of restrictive covenants

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Good Governance and Communication Go Hand-in-Hand

As laws have changed over the past few years and more information has become available online, community association governance has been forced to evolve to new, higher standards. Now more than ever, volunteer board members must understand their role as leaders and decision-makers for their communities, and they must have the tools to communicate effectively with their owners. When it comes to effective communication, we see a good mix of exemplar approaches (many of which were learned from experience) and communities that could benefit from proven strategies. If your community is looking for ways to improve communication, or struggling with a contentious issue and wondering what may help, consider the following options for increasing transparency, educating owners, and fostering community within your association:

Hold regularly scheduled board meetings. If owners do not have access to the business of the association, they may get suspicious of what the board is doing. Unfortunately, all too often, perception is reality for owners. You may meet for months without other owners in attendance, but that does not eliminate the need for meetings that owners can attend if they so choose. Set the time and location of meetings at the beginning of the year and stick to that schedule.

Allow owner access to board members. The community manager often serves as the primary contact person for owners with questions and problems to report. Managers then communicate with the board and take action where appropriate. But the manager should not serve as a substitute for the owner-elected board. Board members must make themselves accessible, typically at board meetings, so that owners can feel more assured that their voices are heard and considered in the board decision-making process. Remember that, under the new records law, owners have a right to obtain board member email addresses, so owner contact with board members is a part of board member service to the community. But remember, too, that all board members must have access to information used to make decisions—so individual board members should avoid secret conversations and promises to owners.

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Smoking in Your Community - Is it a Nuisance?

 We frequently get questions about what an association can do to restrict or regulate smoking in the community. These questions have increased now that Colorado law permits growing and smoking marijuana. Typically, but not always, the issue is exacerbated in condominium or townhome communities.

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Violence Toward the Board - What Can You Do?

Once again we read about an unhappy owner in his homeowners association acting out his aggression toward the association’s board of directors. This time, the owner shot and killed two members of the association’s board of directors because the board approved removal of three pine trees that shielded the owner’s view of overhead power lines behind his home.


Is it just our collective imaginations, or is there really more aggression and violence toward association boards? I suspect it is not just our imaginations. While some of the evidence is anecdotal, here in our office it truly seems that association boards face more hostility, aggression and violence.

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Together We Stand - Divided We . . . Are Liable? Personally?

 We write regularly about the role of community associations’ boards of directors, as well as the role of each of the directors on the board. Today I saw an interesting article about potential liability of directors.


We routinely advise boards that it is important for boards to obtain proper information, thoroughly debate issues at a board meeting and make a decision. In fact, Colorado law provides that a Board, acting within its power, in good faith and in the exercise of its business judgment, will not be liable for its decisions, even if the decision is ultimately determined to be the wrong one. This is known as the business judgment rule.

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Pssst...My Neighbor is Violating the Covenants!

All Colorado community associations are required by the Colorado Common Interest Ownership Act ("CCIOA") to adopt responsible governance policies governing issues like collections, meeting procedure, and records inspection.  CCIOA does not provide a lot of guidance for the terms of these policies, but the policy regarding enforcement of covenants and rules and the imposition of fines, must provide the following:

  • Notice and hearing procedures;
  • A schedule of fines;
  • A fair and impartial fact-finding process; and
  • An impartial decisionmaker.

These minimal guidelines do not address a question we frequently see from our clients: "Do I have to tell my neighbor I ratted him out?"

Many homeowners prefer the option of anonymity when making a covenant violation complaint.  The reasons for the preference are obvious - it allows the complainant some measure of protection from an irate neighbor, and can encourage free and open violation reports.

Photo courtesy of http://theduty.tumblr.com.

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Directors' Duties

We frequently talk about directors’ “fiduciary duties” to their associations and their members. While CCIOA seems to say that non-declarant directors do not have a fiduciary duty (it says no director nor officer shall be liable for actions taken or omissions made in performance of such person’s duties except for wanton and willful acts or omissions), Colorado courts continue to talk in terms of fiduciary duty. So what is a fiduciary duty?

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Better Communication in 2013

I love the fresh start of a new year. Like many people, I use the last few days of the year to reflect on accomplishments, identify areas for improvement and growth, and set goals for the next twelve months. The last week of the year often slows down enough for reflection and planning, and I can chart my course for things like client relations activities, changes to internal business practices, and training for that three-day bike ride I want to complete in July.

How does your community association plan for the year ahead? If you're a new board member, perhaps you're eager to begin addressing concerns that led you to volunteer in the first place. If you're a seasoned director, you may have a project underway that you intend to see to completion. But what are your goals as a board? Is your board approaching the New Year with a unified vision and voice?

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New Year Reminders

Now that the new year is upon us, it is wise to make sure that your association is in compliance with certain legal requirements. Here is a short list, but make sure to review your governing documents for any other requirements:

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2013 New Year Resolutions for Directors and Residents of HOAs

For those of you who follow our blog, you know that every year I post New Year Resolutions for directors of HOAs. For 2011, the resolutions focused on addressing the fiscal health of associations and in 2012 they focused upon individual development of directors

As I have reflected upon the less than constructive interpersonal dynamics which have become far too common in some HOAs during 2012 and the venomous diatribes of a small number of HOA critics, I’m more convinced than ever that it takes both directors and residents of HOAs (and managers and HOA lawyers for that matter) to do their part to create harmonious and livable communities. As a result, I humbly offer for your consideration the following 2013 New Year Resolutions for Directors and Residents of HOAs:

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Strategic Planning for the New Year

Here it is, not even Christmas yet, and I’m talking about the new year? What gives?

We all know that it is easy to get caught up in day-to-day activities and “emergencies” that command so much of our time. But we also know that, every once in awhile, it is a good idea to take a step back and reflect on where we have been, and where we are going. While this seems obvious, and may apply to so many aspects of our lives, it is applicable to the operation of community associations as well.

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Make Sure to Vote - At Your HOA Annual Meeting!

If you are like me, election day couldn't come soon enough.  While I'm truly a political junkie, the negative campaigning became so overwhelming that even I muted the TV during commercials and we quit answering the incessant political calls.  While the negative campaigns were distasteful and the truth became something that was optional, the real truth is that in the United States of America every vote counts and casting your ballot is your opportunity to make your voice heard.

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How to avoid becoming a headline - or successfully dealing with it if you do

As you know, from time to time, HOAs end up in the news for perceived abuses to residents of an association or to question actions taken by the board or management.  While the allegations in the news coverage may or may not be true, it's rare to see a flattering story about an HOA.  As a result, it's important to have a plan in place to address difficult issues that may arise in your association and the subsequent media coverage.      

Chuck Montera, a public relations and issues management professional with Sigler Communications, works routinely on HOA issues and was kind enough to provide us with the following article on crisis management to share with our readers.  Instead of relying on an attorney to provide advice on public relations issues - we thought it would be helpful for you to get advice straight from a public relations expert.  

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Be Nice to Grumps!

Every Board member knows there are some people who are simply grumps.  They enjoy creating a negative environment.  While Board members are only human, it's important to remember to treat grumps the same as any other member of the association.  If a Board treats a grump differently, that Board could end up with a case of selective enforcement.

Selective enforcement occurs when a Board enforces a covenant against some, but not all members.  This may happen when the Board intentionally takes an action due to a personal issue, as with a grump, or it may happen when a Board takes actions a prior Board neglected to take.  Every situation is different, and what may seem like unequal treatment is not necessarily selective enforcement.

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Of Course You Don't Need Workers' Compensation Insurance - Or Do You?

We occasionally get questions about whether a homeowners association should obtain its own workers’ compensation insurance, and when we recommend “Yes,” the inevitable question is “Why; we don’t have any employees?”

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Rules of the Road for Productive Board Meetings

Those of us who specialize in community association law spend a whole lot of time at HOA board meetings. Based upon experience, I can tell you that how well a meeting is run can make a world of difference in the amount of business which gets accomplished and whether the interactions at the meeting are constructive. While board meetings are open to members and they are encouraged to attend, it’s important to remember that these meetings are held for the purpose of conducting important association business. 

I’m a huge fan of boards blowing the dust off and utilizing their HOA’s Conduct of Meetings Policy. This is one of the 9 required Responsible Governance Policies which HOAs are required to have under Colorado law. (These policies are commonly referred to as the “SB 100 Policies”). A well written Conduct of Meetings Policy will address the procedures utilized to promote productive meetings in the member meeting and board meeting settings. A well written policy should also address the ability of homeowners to speak in an open forum and prior to the board taking formal action on a matter. 

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Senator Newell's Town Hall Meeting Highlights Challenges of Self-Managed HOAs

On Saturday morning, State Senator Linda Newell, who represents most of the South Metro Denver area, held a phenomenal Town Hall Meeting which focused on homeowners’ associations (“HOAs”) and related issues. The turnout for the meeting was excellent and the participants were there to learn and share their stories in a collaborative manner. It was my pleasure to share information about HOAs and to lead this great group of folks in discussing HOA-related issues. It was also an honor to work with Senator Newell who is one of those rare legislators who truly works across the aisle in this hyper-partisan political world we live in. 

While many issues were discussed, a noticeable trend at the Town Hall Meeting was the challenges faced by self-managed HOAs. In particular, the challenges associated with the maintenance, repair and replacement of physical components of structures the HOAs are responsible for and budgeting and setting assessments at a level necessary to meet these obligations. One homeowner shared her story of trying to sell her unit in a condominium association, only to be thwarted by the fact that the concrete patio on the back of her unit is pulling away and is in a horrible state of disrepair. This patio is the responsibility of her HOA and it doesn’t look like the HOA has the funds necessary to deal with the problem. 

 

Let’s face it; serving on the board of directors of an HOA is a big responsibility. The boards of self-managed HOAs have the same responsibilities as the boards which benefit from the advice and assistance of professional community association managers. Without the expertise of these professional community association managers, many self-managed boards struggle to obtain the information necessary to carry out their responsibilities and to fulfill their fiduciary duty to the communities they serve. 

 

So what are these folks to do? Here are some tips:

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HOA Opinion Piece in Denver Post Paints Unfair Picture

Today in the Denver Post, an opinion was published by Jose’ Martinez entitled The dark side of HOAs. While there is no question that not every HOA is perfect, it’s unfortunate that Mr. Martinez made the leap that based upon an anecdotal situation he observed –  all HOA boards and management companies are bad. Mr. Martinez also referenced the 3000 queries and complaints outlined in the 2011 Annual Report of the HOA Information and Resource Center as evidence for the need to regulate HOAs. What Mr. Martinez failed to note is that for the 8,287 HOAs which are currently registered in Colorado, only 478 actual complaints were made and none of those complaints were investigated to determine if they are valid.

While it’s fair to say that some boards of HOAs are on power trips, act inappropriately and should be removed; it is also fair to say that the vast majority of boards, managers and management companies are acting with the best of intentions and in the best interests of the communities they serve. It’s also important to point out that serving as a volunteer on an HOA board is time consuming and can be a no-win situation for these folks. Directors of HOAs have the fiduciary duty to enforce the governing documents of their associations and to make tough decisions that are sometimes not popular. Managers have the unenviable task of communicating and acting upon these tough decisions.

 

Does the Colorado Common Interest Ownership Act ("CCIOA") have teeth to ensure that HOA boards are complying with the “homeowner bill of rights” provisions of CCIOA? No, it doesn’t. Is this something that should be addressed by statute? Probably so – but in a balanced, thoughtful and appropriate manner. Is ongoing education an important component for HOA boards and managers? Absolutely. However, saying all of these things, I would like to salute the directors and managers of HOAs for all of your hard work and the contributions you make to ensure your communities are vibrant and great places to live. The job you do is sometimes thankless and I want you to know that painting all boards, managers and management companies as bad is truly unfair! 

Posted In Governance
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Budget Season: How is your HOA handling reserves?

After a wonderful holiday weekend, it’s time to saddle up and get back to work! For management and boards of homeowners’ associations (“HOAs”), that means budget season is now in full swing. While community association managers play a pivotal role in assisting boards with the creation of budgets, it’s ultimately up to each board to adopt a budget that’s in the best interests of the association they serve. That means boards must be fiscally responsible when creating their budgets. 

Over the past few years, boards have understandably been reticent to do anything to increase assessments. For some HOAs, especially some condominium associations, that has meant making a decision to defer routine maintenance and to either not fund reserves at all or to fund them at a low level. While kicking the reserve can down the road may seem like a short term solution to an assessment increase, if put off too long, this can become a recipe for a fiscal nightmare. 

 

When facing the question of whether – or at what level – to fund reserves, boards should ask themselves the following questions:

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You Catch More Flies With Honey

As I was driving to work this morning, I was reflecting on some of the less than constructive communications I have witnessed in the community association context lately. I don’t know if it’s the heat that’s getting to everyone or if the ugly presidential campaign is starting to rub off on us, but it seems like some folks have lost the ability to be constructive and to think before they act or speak. 

Whether it’s a homeowner to homeowner dispute, homeowner to board dispute, board to homeowner dispute, homeowner to manager dispute or any other combination – everyone needs to take a deep breath and think before they act. It’s also a good rule of thumb not to blast off that nasti-gram or leave a blistering voicemail in the heat of the moment. 

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Colorado Springs HOA Has Unique Opportunity to Build Consensus and Community

Yesterday, the Denver Post ran a story entitled Rebuilding to test covenants after Colorado Springs wildfire. The story focuses on the Mountain Shadows Community Association which was devastated by the Waldo Canyon fire. The Post reports that 346 homes were destroyed in this community made up of custom homes, patio homes, condos and townhouses. 

While the ashes of this devastating fire have barely cooled and the broken hearts of the residents cannot possibly have healed, the story anticipates fighting over rebuilding and the inability of architectural review committees “to enforce the covenants and rein in rebellious property owners.” The story essentially focuses on ways to control homeowners as they attempt to rebuild their homes and their lives.

 

Unfortunately, the story misses the most important point – this is the perfect opportunity for the homeowners in Mountain Shadows to come together to build consensus on a vision for the community they would like to rebuild. With the exception of being required to comply with applicable local, state, and federal laws and ordinances, governing documents of HOAs can (and should) be updated to fit the priorities of the owners in the communities the documents govern.  Here are some thoughts for the folks at Mountain Shadows, and any other HOA for that matter, facing the task of rebuilding:

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Happy and Effective HOA Residents: Trait #3

As we continue on our journey to examine traits which make HOA residents happy, productive and reasonable members of their communities – let’s recap the first two traits we have examined: 

Trait #1: Happy and effective HOA residents understand that they must be familiar with and comply with their governing documents.

Trait #2: Happy and effective HOA residents get informed before reacting negatively.

 

When we delved into Trait #2, I mentioned that it’s not uncommon for residents of HOAs to react negatively to board decisions which affect their wallets and pocketbooks. Let’s face it – that’s just human nature. Trait #3 dovetails into this common reaction and calls on HOA residents to be realistic about the finances and obligations of their HOAs.

 

Trait #3: Happy and effective HOA residents understand that money doesn’t grow on trees.

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Happy and Effective HOA Residents: Trait #2

Yesterday I began posting a series of blog entries outlining traits of happy and effective residents in HOAs. While members of the boards of directors of HOAs certainly have a significant role in creating vibrant, healthy and livable communities – residents of HOAs play an equally important role in fostering cooperation and reasonableness. Here’s the first trait I outlined yesterday on our journey to discover how residents can do their part to make their associations a great place to live:

Trait #1: Happy and effective HOA residents understand that they must be familiar with and comply with the governing documents of their HOA. 

While it’s imperative for residents to understand and comply with the governing documents of their associations, we can’t stop there. Controversies in HOAs can arise over issues that have little to do with complying with the governing documents. This is particularly true when boards make tough decisions to increase assessments or even levy a special assessment. As a result, we arrive at Trait #2.

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Happy and Effective HOA Residents: Trait #1

For those of you who follow our blog, you know that last spring I posted a series of blog entries outlining the Traits of Highly Effective HOA Directors. This popular series focused on those traits of HOA directors that contribute to the successful governance and operations of the associations they serve. 

As I reflect back on all of the feedback and conversations that sprang from this series of blog entries, it became clear to me that directors governing effectively is only one piece of the puzzle in building vibrant and livable associations. Owners and residents of HOAs play an equally important role in ensuring that their communities are well-maintained and are a great place to live. As a result, this series of blog entries will focus upon the traits of happy and effective HOA residents.

 

Trait #1: Happy and effective HOA residents understand that they must be familiar with and comply with the governing documents of their HOA. 

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You Can Lead a Horse to Water...

But you can’t make him drink.  A lot of the work I do for my association clients requires me to counsel boards to take actions different from the actions they’d taken in the past.  I advise them to enforce their covenants.  I make sure they treat owners and residents as equally as possible, regardless of gender, age, race, affiliation, or personality conflicts.  I work to dispel myths about owner’s rights and privacy.

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CCIOA 101 for HOA Boards: Counting Secret Ballots

Last week in a CCIOA 101 for HOA Boards posting, I talked about the circumstances under which the Colorado Common Interest Ownership Act (“CCIOA”), at C.R.S. 38-33.3-310, requires the use of secret ballots when members are voting in a contested election for directors or on other issues. When counting these secret ballots, here’s what you need to know:

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CCIOA 101 for HOA Boards: Secret Ballots

We often receive inquiries from HOA board members on whether they are required to utilize a secret ballot when members/owners vote on any particular issue brought before them. The Colorado Common Interest Ownership Act (“CCIOA”) addresses voting at C.R.S. 38-33.3-310 and requires secret ballots to be utilized by members under the following circumstances:   

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To Chalk or Not to Chalk - That Is the Question

CBS News in Denver recently ran a story about a controversy taking place in a local HOA relating to some residents allegedly complaining about a little girl in the community creating sidewalk art with chalk. Evidently, this seemingly normal childhood activity has created something of a divide in the community.

While it’s up to everyone to decide for themselves whether the chalk art of a child is offensive, the bigger legal question is whether creating a rule prohibiting chalk art in an HOA is a violation of the federal Fair Housing Amendments Act (“FHAA”) or the Colorado Civil Rights Act (“CCRA”).

 

Offensive?  (Photo courtesy of thechive.com)

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CCIOA 101 for HOA Boards: Open Meetings

For those of you who follow our blog, you know that I recently concluded a series of blog entries on the new HOA records bill (“HB 1237”) which has been signed into law by Governor Hickenlooper and will go into effect on January 1, 2013. This is just a first step the Colorado legislature has taken to address “homeowner bill of rights” provisions in the Colorado Common Interest Ownership Act (“CCIOA”). 

As I have shared in recent blog entries and in articles I have written for the Rocky Mountain and Southern Colorado Chapters of Community Associations Institute, in 2013 legislators in Colorado have pledged to introduce legislation to provide an enforcement mechanism that homeowners can utilize to ensure their HOA boards are complying with CCIOA. This legislation could even institute penalties for failing to comply.

 

While some boards may purposefully not comply with provisions of CCIOA, I believe the vast majority of boards are acting in good faith and strive to do the right thing. Instead, they may not know about or fully understand important provisions of CCIOA that provide rights to homeowners/members of their associations. As a result, over the next several weeks, I am going to be posting a series of blog entries entitled CCIOA 101 for HOA Boards aimed at getting HOA board’s up-to-speed on important provisions of CCIOA. The first few blog entries in this series will focus upon the rights of members relating to HOA meetings. 

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Displaying Patriotism in HOAs

We hope you all had a wonderful holiday weekend and took time to reflect on the sacrifices that our men and women in the military have made for the United States. For those of you who have lost loved ones in the service of our great country, our thoughts and prayers are with you. 

Americans express their thanks to the members of our military and their patriotism in a variety of ways. One of the most common ways they do this is by displaying the American flag. As we continue to remember those lost while serving their country and with Flag Day and the 4th of July fast approaching, now is an appropriate time to remind HOAs about Colorado law relating to flying the American flag and service emblems. 

 

Here’s what HOAs need to know:

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Those Pesky Policies

We’ve written before about the responsible governance policies required by the Colorado Common Interest Ownership Act (CCIOA). You all know that you’re required to have them in place. But, beyond the fact that Colorado law says you have to have them, why should you have them, and what benefit do they provide?

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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.

Continue Reading Posted In From Capitol Hill/Legislation , Governance , Hot Topic - HOA Records
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HOA Records Bill Clears the Senate!

HB 1237 (the HOA records bill) just unanimously cleared the Senate on 3rd reading!  The bill will now be sent back to the House for concurrence.  We believe the bill will clear this final legislative hurdle in the House before the legislative session adjourns next Wednesday and will then be sent to Governor Hickenlooper to be signed into law. 

Stayed tuned for the latest updates on HB 1237 and a comprehensive review of the bill once it makes it through the legislative process. 

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Highly Effective HOA Directors: Trait #8

As we reach the end of our journey in outlining the 8 traits of highly effective HOA directors, it’s appropriate to recap the first 7 traits that make these individuals outstanding participants in the governance of their homeowners’ associations (“HOAs”). So here’s a recap from the beginning: 

Trait #1: It’s all about the HOA and not about their personal agenda. 

 

A highly effective director understands that he/she has a fiduciary duty to act in the best interests of the association as a whole and is able to put aside his or her personal interests or agenda on any given issue. A highly effective director is also able to put the interests of the association ahead of the interests of neighbors or friends.

 

Trait #2: A highly effective director never attends an association meeting without having the governing documents of the association close at hand and routinely consults the documents for guidance.

 

A highly effective director understands that he/she has a duty to comply with and enforce the governing documents of the association. A highly effective director understands and is committed to consulting the governing documents of the association prior to making decisions. These directors always have the declaration, bylaws, SB 100 policies, and the rules and regulations of their association available for review at all meetings.   

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Highly Effective HOA Directors: Trait #7

As we enter the homestretch in outlining the 8 traits of highly effective HOA directors, I have to say that I’m thrilled at the number of hits this series of blog entries has received. I suspect the issue of governing effectively is a hot topic because it’s just not that easy to govern HOAs in these tough economic times. Directors are looking for the “secret to success” and unfortunately there’s no silver bullet. However, we hope that at least a few of the traits we have outlined in this series will resonate with directors who may be struggling and help point them in the right direction. 

The 7th trait of a highly effective director requires these individuals to not only deal with the issues of the day – but to look strategically toward the future.

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Highly Effective HOA Directors: Trait #6

This morning we continue our journey to identify the traits of highly effective HOA directors. While we could go on at length over what makes a director great, this series of blog entries will identify 8 essential traits of these outstanding leaders.

To recap, here’s where we have been on our journey thus far:

 

Trait #1: It’s all about the HOA and not about their personal agenda.

 

 

Trait #2: A highly effective director never attends an association meeting without having the governing documents of the association close at hand and routinely consults the documents for guidance.

 

 

Trait #3: A highly effective director asks constructive questions and is an outstanding listener.

 

 

Trait #4: A highly effective director never acts as a Lone Ranger.

 

 

Trait #5: A highly effective director passionately debates issues in the board room and then supports the ultimate decision of the board. 

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Highly Effective HOA Directors: Trait #5

It’s Friday and I have to admit I thought seriously about taking a day off from blogging on the traits of highly effective HOA directors. And then I thought – quit being so darn lame Molly – HOA directors are the folks who deserve to be given the day off for all of the countless hours they commit to governing their communities!

If you are reading this series of blog entries for the first time on the traits that make a director highly effective in participating in the governance of their homeowners’ association (“HOA”), check out this blog entry to catch-up on the first 4 traits.

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Highly Effective HOA Directors: Trait #4

In our quest to identify the traits that make a director highly effective in participating in the governance of their homeowners’ association (“HOA”), a quick recap of the traits we have explored so far is in order:

Trait #1: It’s all about the HOA and not about their personal agenda.

 

 

Trait #2: A highly effective director never attends an association meeting without having the governing documents of the association close at hand and routinely consults the documents for guidance.

 

 

Trait #3: A highly effective director asks constructive questions and is an outstanding listener.

 

 

For those of you who remember the radio show the Lone Ranger, you’ll have to forgive me for using the hero in this next trait of a highly effective director. While I may not have the concept of the show quite right, I hope you will give me a pass on this one!

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Highly Effective HOA Directors: Trait #3

As we continue our journey today in exploring the traits that make a director highly effective in participating in the governance of their homeowners’ association (“HOA”), let’s start by recapping the first two traits we have identified:

Trait #1: It’s all about the HOA and not about their personal agenda.

 

Trait #2: A highly effective director never attends an association meeting without having the governing documents of the association close at hand and routinely consults the documents for guidance.

 

I believe the next trait of a highly effective director may well be one of the most important traits in effective governance. This trait requires a director to suspend his/her ego and their own ideas of whether an issue in their HOA is truly a problem and how to best address the problem.

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Highly Effective HOA Directors: Trait #2

Late last week, I began posting a series of blog entries focusing on the traits that make a director highly effective in participating in the governance of their homeowners’ association (“HOA”). 

As a reminder, here is the first trait:

 

Trait #1: It’s all about the HOA and not about their personal agenda. 

 

 

A highly effective director understands that he/she has a fiduciary duty to act in the best interests of the association as a whole and is able to put aside his or her personal interests or agenda on any given issue. A high effective director is also able to put the interests of the association ahead of the interests of neighbors or friends. 

 

 

A second, and equally important trait, focuses on the importance of being familiar with and utilizing the governing documents of the HOA.

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Highly Effective HOA Directors: Trait #1

Serving on the board of directors of a homeowners’ association (“HOA”) is just not easy – especially in these tough economic times. Directors sacrifice countless hours of their personal time to govern their communities and deal with tough issues. Sometimes their hard work is recognized by members of their HOAs and other times they are criticized for their decisions. 

If you have served on the board of an HOA, have advised boards, have observed the work that boards undertake or have interacted with board members, you can probably pinpoint the traits of a highly effective director. Over the next several days, this series of blog entries will focus on the traits that make a director successful in participating in the governance of their association.

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Appointment and Use of Committees

As a board member, do you ever feel that you and the remaining board members are on an island alone? Nobody understands what you do, much less appreciates what you do. But, they are more than willing to criticize everything you do, often because it adversely impacts their use and enjoyment of their property. You and the remainder of the board feel overwhelmed by the amount of work there is to be done to run your association. And while the manager can be a tremendous help, you can’t afford to pay them for everything you would like to have done. So what do you do?

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Association Disclosures Following Transition

In my March 30th blog posting, I outlined the documents and other items that must be produced by a declarant to the homeowners’ association within 60 days following transition of the association from declarant to owner/association control. While the declarant clearly has responsibilities to the association following transition, the association subsequently has the responsibility to make “public disclosures” within 90 days after assuming control from the declarant.

The Colorado Common Interest Ownership Act (“CCIOA”), atC.R.S. 38-33.3-209.4, requires an association to make the following information available to unit owners upon upon reasonable notice to the association:

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Production of Documents by Declarants Following Transition to Owner Control

In the past few weeks, I have received several questions relating to the responsibility of a declarant to transition an association it developed to owner control and the responsibility to produce records and other items following transition. Both of these questions are controlled by the Colorado Common Interest Ownership Act (“CCIOA”).

Termination of Declarant Control

 

While a declaration of covenants, conditions and restrictions or a condominium declaration for a new community will normally have specific provisions regarding declarant rights and the period of declarant control over the community, C.R.S. 38-33.3-303(5)(a)(I) addresses the outside limits on declarant control for most new communities (with the exception of large planned communities). In particular, that provision of CCIOA provides that regardless of the period of declarant control outlined in a declaration, declarant control will terminate within 60 days following the earliest of one of these events:

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Attention Homeowners: Please Control Your Flower Fairies

I love springtime in Colorado! The perennials in our flower beds are popping up, the trees in our yard are flowering and my allergies are truly a gift to behold. However, my love of spring is nothing compared to the how the flower fairies are feeling.

Come on – ADMIT IT – you’ve seen at least one flower fairy in your lifetime! In fact, I have it on good authority from a friendly garden gnome that the wise people have assigned one flower fairy to beautify every yard, patio and balcony located in an HOA in Colorado. 

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Open Meetings Shouldn't Be Unproductive Meetings

One of the most common governance questions we receive from HOA boards is whether they are permitted under Colorado law to hold a closed door “working session.” When asked why they want to prohibit HOA members/owners from attending these working sessions, we are inevitably told “homeowners are constantly interrupting us and we just can’t get anything done.”   

The Colorado Common Interest Ownership Act (“CCIOA”), atC.R.S. 38-33.3-308(2)(a), provides in part that “All regular and special meetings of the association’s executive board, or any committee thereof, shall be open to attendance by all members of the association or their representatives. . .” While CCIOA does not specifically define what constitutes a “meeting,” it is safe to say that anytime a board or committee convenes to conduct business, work through HOA issues or make decisions – that constitutes a meeting which the members are entitled to attend. 

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Misallocations of Assessments: What's the Board To Do?

So you’ve been elected to the Board; you’ve reviewed all of the governing documents (at least, those that you’ve been provided); you faithfully review your board packets in preparation for your regular meetings, you’re well on your way to helping your association conduct its business in a businesslike manner. At your board meeting, a curious owner inquires why her monthly assessments are different than her neighbor’s.

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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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Does Your Association Board Operate Like a Chess Master?

My son’s latest obsession is chess. He joined the chess club at school, got a new chessboard, downloaded chess apps to all the electronics he could get his hands on, and started reading strategy books. On a snow day like today, it’s no surprise that we’re spending part of the time playing chess. In the midst of our moves, I can’t help but think how the game of chess translates to the business of community associations. Whether in chess or association decision-making, the following tips come in handy:

Know the moves. Chess involves a finite number of pieces, and the basic moves are easy enough to learn. As a board member, the “pieces” and moves at your disposal are much more numerous and complex. You will need to understand the moves available to you under your association’s governing documents. You’ll also consider what the association’s budget can support, the politics and dynamics of the community, options presented by vendors, and advice from attorneys, engineers, accountants and management.

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G.A.P. Insurance: Exercise your Due Diligence before Signing Up

As many of you have heard, there is a new collection option called G.A.P. ("Guaranteed Assessment Program") being marketed to associations throughout Colorado. It's presented as insurance that pays the association a portion of assessment fees in exchange for a yearly premium based on a percentage of the association's annual budget and associated risk. At first glance, this may seem like a cost effective and innovative way to collect delinquent assessment fees. However, when exercising your due diligence, here are some things that your board of directors should consider:

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Don't Elect the Convicted Felon

Have you heard the story of the community association members who knew one of their board candidates was convicted of a felony related to fraud or embezzlement yet elected that person anyway? Did you hear the part about how that board member later ran off with a substantial amount of the association’s funds? Maybe it’s just an urban legend among community association professionals. Or maybe it’s true. Either way, how does your association help to ensure the election of board members who will represent the association’s best interests?

As community association lawyers, we often get questions about how to place limitations on who can serve on an association’s board of directors. Sometimes boards do not want to allow owners with delinquent accounts to serve on the board. Other times, board members know that a person with a criminal record intends to run for the board. In other situations, current board members want to prevent people with different viewpoints from getting elected to the board.

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Are Your Documents Awful?

Nearly every time someone asks us a question regarding their association's obligations, their individual duties, the proper method of taking action, or virtually anything related to association activity and governance, we begin our answer with, "Well, it all depends on your documents."

Of course, certain things are dictated by law, but more often than not, your documents spell out the detailed issues that aren't specifically addressed by statute. Your documents - your Declaration, Bylaws, Articles of Incorporation, Rules, and Policies - dictate how your association must respond to various situations. If you want to hold a special meeting - look to your Bylaws. If you want to know how many directors you need to have - look to your Articles of Incorporation and Bylaws. If you want to know whether you are responsible for maintenance - look to your Declaration.

Unfortunately, some documents can be awful.

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Minutes Should Be Minutes, Not Hours

Have you ever had an opportunity to review minutes of a meeting, and from what is written, you are able to create a mental picture of who was actually speaking and what they were saying? Not only that, from the words written, you can glean the emotion with which everything was said and delivered. That’s all well and good for writing a novel, but it is the exact opposite of what should be done when preparing minutes.

Minutes should be minutes, not hours. That’s what we say when we are provided with a copy of the minutes of a board meeting or members’ meeting and they go on for pages and pages, with a transcription of everything said and the demeanor in which it was said.

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Important Reminder: Renew Your HOA's Registration

As an important reminder, HOA boards and management should remember to renew the registration for your HOAs with the Colorado Division of Real Estate on the HOA Information and Resource Center webpage. Here’s what you need to know to register:

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HOA Boards and Executive Session: What You Need to Know

In my posting yesterday, I blogged on 2012 New Year Resolutions for directors of HOAs with an emphasis on their personal development as leaders of their communities. In that posting, I invited board members to provide me with governance topics they would like us to blog on. One of the first responses I received was a great one that dealt with the often misunderstood topic of executive sessions. 

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2012 New Year Resolutions for HOA Directors

Last year at this time, I blogged on recommended New Year Resolutions for HOA boards. In that posting, I focused on boards taking a serious look at the fiscal health of their communities and their plans to fund reserves. While that posting was based upon policy issues, I thought it would be worthwhile this year to address the individual development of directors with a focus upon excellence. With that in mind, here are some New Year Resolutions directors of homeowners’ associations (“HOAs”) may want to consider:

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2012 HOA To Do List Reminder: Review and Comply with Responsible Governance Policies

Back in 2005, the Colorado General Assembly passed Senate Bill 100 which requires that every homeowners’ association (“HOA”) in Colorado must adopt 8 Responsible Governance Policies. Since that time, an additional policy has been added to the mix and the requirement for the “conflicts of interest” policy has been further refined. 

As a reminder, here are the 9 Responsible Governance Policies each HOA must adopt and comply with: 

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2012 HOA To Do List: Exercise Due Diligence Before Executing Contracts

On a yearly basis, the boards of homeowners’ associations (“HOAs”) are faced with making important and sometimes costly decisions on behalf of the communities they govern. When retaining the services of professionals and vendors to provide services for your association – it’s essential to exercise due diligence to ensure your association is properly protected. Here are some important reminders:

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2012 HOA To Do List Reminder: Review Reserve Study Policy and Make Contributions to Reserves

As we slide into 2012, it’s important for the boards of HOAs to take a careful look at the status of their reserve funds. By now, every HOA should have adopted a Reserve Study Policy that is required under Colorado law. C.R.S. 38-33.3-209.5(1)(b)(IX) provides that a Reserve Study Policy must include the following:

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Conflict Management in Your Association

In the busy-ness of day to day work, once in awhile I get a chance to reflect on what is causing all of this busy-ness. It seems that the last several years have, unfortunately, brought out much conflict in the operations of community associations, resulting in contentious board meetings and annual meetings, as well as disputes between associations and their members and owner to owner disputes. The Foundation for Community Association Research, a national 501(c)(3) organization devoted to common interest community research, development and scholarship recently published a paper by Courtney L. Feldscher, a Ph.D. Candidate at Boston University addressing managing conflict in community associations.

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2012 HOA To Do List Reminder: Groom Future HOA Leaders

For those of you who follow our blog, you know that in recent entries I have been compiling a 2012 HOA To Do List for managers and directors of homeowners’ associations (“HOAs”). My first additions to the To Do List addressed planning ahead for annual disclosures and renewing your HOA registration in 2012 with the Colorado Division of Real Estate. While these initial entries were housekeeping items required by Colorado law, this latest addition is much more strategic in nature and is intended to enhance the governance of your communities.

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2012 HOA To Do List Reminder: Renew HOA Registration

On Monday, I blogged a reminder to HOA managers and board members about the annual disclosures associations are required to make within 90 days after the end of the association’s fiscal year. As I was thinking about creating an HOA checklist for 2012, it occurred to me that it’s important to add a reminder to renew your HOA’s registration with the Colorado Division of Real Estate (“Division”).

As you know, HOAs in Colorado were required to register for the first time with the Division prior to March 1, 2011, or face the possibility of penalties for failing to register. In early March, the Division published a Position Statement providing the opinion that pre-CCIOA communities (those HOAs created prior to July 1, 1992) were not required to register. However, since this Position Statement is not binding on the courts and the reasoning is subject to differing opinions, we have advised all of our HOA clients to register with the Division to avoid potential penalties.

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Planning Ahead for Annual Disclosures

As we enter the homestretch for 2012, it doesn’t hurt for managers and boards to put on their radar screens the “annual disclosures” homeowners’ associations (“HOAs”) are required to make pursuant to the Colorado Common Interest Ownership Act (“CCIOA”). C.R.S. 38-33.3-209.4(2) provides that within 90 days of the end of each fiscal year, HOAs must make the following information readily available at no cost to unit owners:

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Homeowners Associations and Bullying

Bullying is a huge headline lately.  Lady Gaga is starting a foundation to fight the problem, the government's involved with www.stopbullying.gov, and there are hundreds of news articles every week on the subject.  Bullying is pervasive and infects every area of life.  As an association attorney, I see bullying every day.

Sometimes the bully is a board member, refusing to allow other board members or association members the right to speak and discuss a subject.  Other times, the bully is a homeowner who has a personal issue with another homeowner, and brings the association into that conflict. The bully can also be a homeowner who disagrees with association policy, and disrupts meetings in an attempt to assert his position.

I know a lot of people probably figure I'm a bully - after all, I'm the attorney who tells you to take down your tree house and that you have to re-paint your purple trim white.  Surprisingly, lawyers get bullied too.  We've received simple death threats, insults about our practice, professionalism, intellect, and personal grooming, and even threats of biological weapons.  A homeowner once chased one of our attorneys with a machete.  A lawyer involved with the widespread association fraud in Nevada was found severely beaten yesterday.  It is not clear whether the beating was related to his involvement in the fraud, or just his graduation from law school.

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So You've Got a PR Disaster...Now What?

A Parker couple recently made the news after an unknown person spray painted offensive language on the couple's garage, and left a noose on their front porch.  The couple, Aimee Whitchurch and Christel Conklin, rent a unit at a condominium development in Parker.

It is never good news when your association makes the news for a hate crime.  Aimee and Christel have been on most local stations, and their story is being picked up by blogs everywhere (including this one).  While the individual who vandalized the unit is the person ultimately responsible for the crime, the couple's homeowners association is feeling heat as well.

When I saw video of the garage after someone covered the offensive language, I groaned to myself.  This screen capture, taken from KWGN News, shows a sloppy attempt to hide the offending words. 

Unfortunately, the white primer does little more than to highlight the crime.

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Reflections on a Director's Duty of Loyalty

I have been teaching a series of workshops in the mountains focused on the Responsible Governance Policies (commonly referred to as “SB 100 Policies”) which homeowners’ associations (“HOAs”) in Colorado are required to adopt under the Colorado Common Interest Ownership Act (“CCIOA”). This week we talked about the role of directors in governing their communities with an emphasis on fiduciary duty. We reflected on the fiduciary duty of directors and how directors sometimes unintentionally - or with the best of intentions - breach this duty. 

As Suzanne Leff wrote in a blog posting entitled Fiduciary Duty of Board Members: An Overview , directors of HOAs have the following duties to their associations: (1) Duty of Care; (2) Duty of Loyalty; and (3) Duty to Act Within the Scope of Their Authority. 

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Safety Concerns v. Architectural Approval - You Decide

My Fox Houston just reported on a story where a homeowner in a patio home community replaced a brick wall in front of his home with a wrought iron fence.  Van Tru admitted he took this step without receiving approval from his HOA because of safety concerns.  Mr. Tru reported that as his daughter went out to the family car, a man was hiding behind the brick wall and followed her. Tru believes his daughters screams caused the man to run away.

The Mission Bend Subdivision is not happy with the changes Mr. Tru made to the brick wall and have given him 90 days to restore the wall.  Legal counsel for the HOA contends that Tru could have utilized other security safeguards like an alarm system or surveilance cameras to address his concerns. 

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Don't Be A Henny Penny!

Do you remember the childhood fable about the infamous Henny Penny who had an acorn fall on her head and was convinced the sky was falling? Our dear little Henny Penny freaked out telling the King and every other animal who would listen to her (including Cocky Lockey) that the "sky is falling!" Ms. Penny and her cohorts, on a quest to warn anyone who would listen about the fate of the universe, met with an untimely demise when a fox invited them into his lair and ate them all. The moral of the story: Do not believe everything you are told.

I couldn’t help but reflect on poor Henny Penny, when I read  an article published in the Green Valley News entitled HOA NUGGETS: Deal with problems early on. The article recounts a real life tale about a “previously very important person” in a Fortune 100 Company who moves into a well run high-end retirement community and convinces residents the community is going down the drain as a result of wasteful spending. He proceeds to bully folks into believing his story, gets elected to and is appointed President of the Board. From that point on, things really do go downhill for this community. Four years later, residents of the community were so fed up with this fellow’s reign that they threatened a recall. The “previously very important person” quietly resigned. 

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A Rant on Civility

We attend a lot of homeowners association board meetings.  Sometimes, it's to discuss things like collections, meeting procedures, policy adoption, and other similar, mundane matters.  All too often, however, we attend board meetings for one simple reason: to make people play nice.

We understand that association governance is an intensely personal activity.  While the politicians in Congress are fairly removed from the actual effects of the decisions they make, association board members have to see their neighbors, who may be impacted by association decisions, every day.  Even a board member may disagree with a board decision that impacts that member's home ownership.  As such, it is very common for emotions and personalities to cloud what are fundamentally business decisions.

There is one simple way to help remove many of the personality conflicts that arise with association governance:

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Dial It Back Before You Get Tased!

As you have probably figured out by now, I follow HOA headlines from across the country. Yesterday, a story reported by WFAA.com really caught my eye and not because there is a dispute in a Dallas area HOA about how funds are being expended by the association. Unfortunately, disputes of this ilk aren’t all that uncommon. What caught my eye is the level to which the anger has escalated. Residents have allegely been receiving threatening letters, have been physically threatened in the community and one resident evidently got so out of control that he was tased by local law enforcement. 

Based upon what I can piece together from the story, there are some real questions about how funds are being expended and accounted for by the association. There are also allegations of impropriety by directors. I have no idea whether there is any truth to these allegations. However, at least in Colorado, there are constructive ways to deal with this scenario. 

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Are you a plumber without a plunger?

For those of you who love to bake, you know that carefully following a recipe to bake the perfect loaf of bread is a must. While I’m not a plumber, I suspect these fearless folks don’t leave home without their trusty plungers!  For those of you who serve on the board of directors of your homeowners’ association (“HOA”), you know that your tools of the trade are the governing documents of your association. Right?!

As a director for your HOA, you have the fiduciary duty to comply with and enforce the governing documents of your association. How can you fulfill this duty if you aren’t familiar with or don’t have your association’s governing documents available at board meetings? The short answer is – you can’t. However, it’s never too late to get prepared to govern! Here are the documents for your HOA you should locate, review, put in a binder and take to meetings:

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Annual Meeting Time - Are You Ready?

This is the time of year when many associations start thinking about scheduling their annual meetings. Annual meetings can present a number of challenges for associations, but there is no time like the present to start preparing for the meeting.

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Prevention and Preparedness: How does your community deal with emergencies?

September is National Preparedness Month. For the past few years, we have  devoted a September post to reminders of preventative steps that can help keep your community safe and prepared for emergencies. By implementing preventative measures now, your association may reduce injury and liability later. The following focus areas may assist your association in identifying how prepared it is for the next emergency:

Review governing documents and insurance policies. Ensure that insurance coverage and reserve funds meet the association’s needs as well as the requirements set forth in the declaration and state statutes. An insurance and maintenance chart and insurance guidelines prepared by the association’s attorney, in consultation with the insurance agent, can serve as one way of notifying owners of their responsibilities. We also recommend that associations check their fidelity coverage and purchase crime coverage to protect against fraud and embezzlement.

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Just Say NO to Unproductive HOA Board Meetings!

Have you ever attended or participated in an HOA board meeting that could be best described as an unproductive hostage crisis? You know what I’m talking about! These meetings last literally for hours with very few decisions being made. As a director, you really want to sneak out the back door but understand it’s your duty to participate in the governance of your community. These meetings reach a critical point when directors are found staring aimlessly into space or begin drooling with their eyes rolled back in their heads. 

Here are a few tips for just saying NO to these painful and unproductive meetings:

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Another Victory for Receiverships

A receivership can be a useful tool for associations to collect delinquent assessments and fees against homeowners whose property is tenant-occupied or vacant. Assuming there are paying tenants, the process is typically smooth and the association recovers its delinquents assessments together with the costs of the receivership. In some cases, however, the tenants refuse to pay their rent or pay reduced rent to their landlords if they are Section 8 qualified. The former situation allows the receiver to evict them for non-payment, but the later presents a problem.

An article in the SunSentinel reported that the Willoughby Estates Homeowners Association in Lake Worth, Florida was presented with such a dilemna when it filed a receivership lawsuit and was faced with collecting rental income from a Section 8 tenant. The tenant was only paying $275.00 of the $1,784.00 in rent owed each month with the remainder subsidized by the county Housing Authority. Not a bad deal if you ask me! The association, however, had other plans and demanded that the Housing Authority forward the rent that it sent to the landlord each month. Interestingly, the Court agreed and required the Housing Authority to forward all future payments to the association until it was paid in full.

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But I'm a Member! I'm Allowed to Stop That Contractor...Right?

Wrong.

Yes, you are a member of a homeowners association. With that membership comes rights and responsibilities, such as the obligation to comply with the association's governing documents and to pay assessments, and the right to select the people who will represent you on the Association's Board of Directors.

It's important to remember that as a member of an association, you are represented by the Board - you do not have the power as a member to act for the association.  Much like you're represented in Congress by Mike Coffman or Diana DeGette, you are represented in your association by your Board members.  It is the Board's obligation to take actions for the association.  Sometimes, these actions are different than the action you would've taken in the same position.

Your difference of opinion with your Board does not, however, give you the right to interfere with the association's actions, taken through and approved by the Board.

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Place An End To Bank Owed Debt!

As a result of increasing numbers of foreclosures, associations now have to deal with collecting delinquent balances against not only its individual homeowners but also against the foreclosing lenders/banks. With the sheer number of foreclosures that any given bank must deal with, a depressed economy and a saturated and slow moving real estate market, it is currently not uncommon for banks to retain ownership of a property following a foreclosure sale for up to a year or more. I am not aware of many associations that can carry that kind of debt for such an extended period of time.

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Collections: Are you following the rules?

It’s important that associations follow their governing documents and understand the procedures they should follow when dealing with collection of assessments, fines and other fees. The easiest way to do this is to review the association’s governing documents and the relevant provisions having to do with collections of delinquent accounts. This is especially important should the file proceed to court as a judge will review the case to determine whether the association followed its own rules before finding against a homeowner who did not. 

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Take a Bottle Drink it Down...Pass it Around....

Stephane Dupont, the head of our collections department, is also an avid home brewer.  He recently brought several bottles of his India Pale Ale to share with the office, and so Friday evening found me with a frosty mug (per Stephane's explicit instruction) and a Mad Men DVD.

The juxtaposition of beer with work, and the Mad Men DVD got me to thinking about how business is conducted today, versus the way it worked back in the 1960s.  According to Mad Men, men (because they were all men) would gather around a bottle of scotch and conduct business through the haze of cigarette smoke.  This wouldn't fly today, but it seems some homeowners associations haven't gotten the memo.

We've had association board meetings open with uncorking a bottle of wine.  Seriously.  While we believe that a congenial atmosphere and neighborliness are good things to encourage in the association context, boards must always remember that they are conducting business, not throwing a party. 

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Document Retention and Your Association: What You Need To Know

Associations are obligated by Colorado law, and often their governing documents, to retain certain documents and make them available to owners upon request.  A formal document retention policy can also assist an association that finds itself engaged in litigation.  With more and more associations conducting some business and discussions over e-mail, the requirements of electronic discovery can create additional document retention burdens.

Failure to properly retain documents may result in fines or other penalties if the matter goes to court. Courts expect retention policies to be reasonable; however, what is reasonable depends on the surrounding circumstances. Some factors to keep in mind include the type of document, statutory requirements, and the likelihood of litigation.

Many associations have placed certain association documents online.  These documents may be available to all members with a password, or they may even be available to anyone with the ability to Google.  While there are several advantages of online documents, including greater transparency for members, they also create a number of questions regarding what documents should be retained, where they should be stored, and for how long.

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Email & Governance: A Good Fit?

If you think about it, over the last 10 to 15 years, the explosion of the internet and electronic communications has drastically changed our lives and how we do business. I actually remember when I dictated documents, my legal secretary literally made carbon copies when typing on her IBM Selectric and we used a fax machine to expedite communications. The pervasiveness of email communications has not only revolutionized the practice of law, it has changed the way we live our lives and how many boards of homeowners’ associations (“HOAs”) govern. 

Is it a good thing when boards hold discussions and make decisions via email on issues affecting their associations? In my opinion – not so much. Here are my thoughts:

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Ruling Out Diapers Could Really Stink for Your Association

Yesterday, Molly Foley-Healy wrote about community association rules and evaluating whether your association’s rules and restrictions fit your community. Making your rules and regulations fit your community is only one step in the process of reviewing and revising board-adopted rules and regulations. What if your rules are illegal?

One condominium association in Canada was recently ordered to pay a former owner $10,000 for prohibiting the owner’s young daughter from swimming in the association’s pool. The association’s rules prohibited any child under the age of 2 from using the pool. Even though the rule at issue may have fit the community, which apparently consists of many owners or residents over the age of 65, the rule violated the Canadian fair housing laws because it discriminated based on familial status. Similar fair housing laws apply to Colorado community associations.

Continue Reading Posted In Community Association News , Covenant Enforcement , Governance , Your Governing Documents
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So You Want to be a Board Member...

Every member of an association has something unique they can contribute to their Board.  Board members with backgrounds in insurance, landscaping, law, and construction often provide expertise most people don't have and become invaluable to an association.  Even without relevant experience, your unique perspective can help your association function better.  You may be considering taking the leap to become a Board member.  We always welcome interest from new and past members, but recommend you do a little thinking before you submit your name for Board consideration.

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Your HOA Can't Stop You From Installing Solar Panels - But it Can Stop the School District!

As regular followers of this blog are aware, Colorado homeowners associations cannot effectively prohibit the installation of renewable energy devices on individual homes and units, although they can impose reasonable restrictions on the devices.  Molly Foley-Healy addressed this matter in detail back in May.

Today, the Denver Post published a story about the Acres Green Homeowners’ Association and its fight against the Douglas County School District’s attempt to install solar panels on the ground near Acres Green Elementary.  The Association argued to the Douglas County Planning Commission that the solar panels would constitute a potentially dangerous eyesore, and the problem could not be effectively mitigated by screening the panels from view.  The School District could not install the panels on the school’s roof because, after contracting for this installation, it was determined the roof couldn’t support the project.

Not in your backyard? Hope your HOA agrees...

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Is the Time Ripe for Doggie DNA?

Did you know the average dog generates approximately 276 pounds of poop a year? If you have even one or two dog owners in your homeowners’ association (“HOA”) who don’t pick up after their pups – that’s a whole lot of poop for the HOA to scoop! 

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Contemplating Budget Preparation Season . . .

I know you are all enjoying summer and thinking about taking time off to spend with family and friends. As board members, I also know the last thing on your mind is thinking about the 2012 budget for your association. However, if your fiscal year begins on January 1, 2012, toward the end of the summer and through the fall you will be working with your manager on preparation of the budget for your association. If your association is self-managed, that task can be even more daunting.

Please do not misunderstand me; I’m not suggesting that you begin preparing your budgets now. Frankly, you don’t have all of the data you need to make good decisions and you shouldn’t be spending your summer crunching numbers. Instead, as the policy makers of your communities, I would like to suggest that you begin thinking about whether the current assessment levels are meeting your association’s fiscal needs.

 

Here are a couple of areas to contemplate and related questions to ask yourselves:

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What Hat Are You Wearing at HOA Board Meetings?

If you ask folks why they ran for a position on the board of directors of their homeowners’ association (“HOA”), you would probably get a variety of answers. Many individuals will tell you they ran for the board because they are committed to ensuring their community is well-run, well-maintained and a great place to live. Some might tell you they are on the board because they couldn’t find anyone else to volunteer. Others ran for a seat because they are angry about how the association is being run or governed. Their anger might be focused on parking issues, covenant enforcement issues or concerns about raising assessments. 

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Directors Live In a Fishbowl

Serving on the board of directors of a homeowners’ association (“HOA”) takes a lot of work and dedication. These uncompensated volunteers are responsible for ensuring the smooth and effective governance and operations of their associations. With the possible exception of raising assessments, taking covenant enforcement action against members is one of the least favored duties these individuals are required to carry out. 

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Fred Flintstone v. Steven Seagal?

On Saturday, ABC 15 out of Scottsdale, Arizona reported on a dispute Steven Seagal is having with his homeowners’ association (“HOA”). The gated community which sports multi-million dollar homes is upset about the number of workers’ vehicles parked in front of the action star’s home. 

This issue seems to have been going on for quite awhile. Seagal’s attorney, Mark Goldman, commented, “They were very upset because there were numerous cars here, but there had to be cars here because the home hadn’t been lived in for two years.” 

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Robert's Rules for HOA Meetings - Not Necessarily the Bee's Knees

[Warning: Parliamentarians please disregard this blog posting. If you do read it and are appalled, feel free to openly and widely disparage my lack of respect and understanding of Robert’s Rules of Order!]

Have you ever been to an annual meeting for an HOA where a member makes a motion from the floor to follow Robert’s Rules of Order, the motion is seconded and passed? What happens next? What happens if the chair of the meeting doesn’t understand Robert’s Rules? What happens if there isn’t a parliamentarian available to walk everyone through the meeting? What happens if there is one person who has a strong grasp of Robert’s Rules and uses it to the disadvantage of everyone else? What is the affect on business conducted at the meeting if Robert’s Rules aren’t properly followed? How many people really know all that much about Robert’s Rules? 

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Sure You Can Do It...But Should You?

Homeowners and condominium association Boards of Directors have extensive powers to act on behalf of the Association.  The actions a Board can take are broad and encompass all areas of Association governance.  However, with great power comes great responsibility.  Boards often take some or all of the following actions, but they need to do so with full consideration of the potential ramifications. Sure, you can do it...but should you?

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Insurance Nightmare for Owner in Small Condominium Association

Yesterday, theday.com in Connecticut reported on an unfortunate story of an owner who lost his condominium unit to a fire only to find out the insurance coverage the association was required to have in place had lapsed for lack of payment. While Mr. Jain carried a standard policy to cover the contents of his unit, the policy does not cover the actual structure.

This is a great example of the challenges which face small condominium associations. In some cases, these associations do not have the funds necessary to hire professional management to handle the finances of the association and to ensure that proper insurance coverage is in place. This is unfortunate because these small associations typically have the same responsibilities as their larger counterparts.

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Dealing with Nasty Joe: Step Back and Take a Deep Breath

“Nasty Joe” is an extremely angry person. You know the type, he’s not happy unless he’s embroiled in an ugly battle. Joe will always point the finger at others, engage in loud, vicious and profane verbal attacks and will never ever back down. He is a master at drawing people into a battle, because he knows he will always win and it fuels his fire.     

Unfortunately, Nasty Joe sometimes lives in a homeowners’ association. If you have encountered a Nasty Joe – you know it’s a no-win situation. These people take great satisfaction in targeting professional staff and members of an association’s board of directors. For these angry people, there’s nothing better than violating covenants and making life a misery for everyone involved.

 

Here are some tips for dealing with a Nasty Joe:

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HOA Board in a Pickle with Sour Homeowners

 Okay – so some stories are just really hard to resist. In Tucson’s Sunflower Community Association, a major controversy broke out over building pickleball courts. For some reason, the thought of playing pickleball cracks me up. My reaction makes no sense and is unfair since I don’t even know what pickleball is. For the life of me, I can’t imagine what a pickleball looks like or what you would do with it. . . Pickleball players – please forgive my ignorance and irreverence!

While I got a kick out of contemplating what uniform one would wear when playing pickleball, the events that occurred in the Association are no laughing matter. Best as I can tell from the Explorer Newspaper and other sources, here’s what happened: The Board of the Association determined that construction of pickleball courts was a good idea. In order to fund the courts, the Board planned to utilize funds collected through a transfer fee called the Community Improvement Fee (“CIF”).  To utilize CIF funds, the Board would first have to obtain approval from the members.  A vote was held and members of the Association voted against funding construction of the courts. The Board, still of the opinion that pickleball courts would benefit the community, followed provisions in the governing documents to levy a special assessment of $47.00 per unit to build the courts. Given the amount of the special assessment, the Board was not required to obtain member approval. 

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Is your HOA prepared to handle the maintenance, repair and replacement of common elements?

CTV News in Ontario, Canada – reported on a story entitled Faulty towers: The hidden dangers of low condo maintenance fees. This story could have been written anywhere in the United States and even Colorado. While the circumstances facing the condominium association in the article are extreme, the story outlines the inevitable results of artificially low assessments, deferring maintenance and failing to fund reserves.

In these tough economic times, no board or resident of a homeowners’ association (“HOA”) wants an assessment increase. Heck – even in good times nobody wants an increase! However, the responsibility of an association to maintain, repair and replace common elements does not magically go away. You need only look at the declaration of covenants, conditions and restrictions for your HOA to determine the responsibilities of your association. For condominium associations – this is particularly important since your association likely has significant and potentially costly responsibilities. 

 

Continue Reading Posted In Governance , Money Matters
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Electric Car Owner Avoids Condominium Association Shock!

Imagine this – you are an avid environmentalist, you are lucky enough to be one of the first individuals in your state to purchase the Chevy Volt (an entirely electric car), you have your Volt customized to make it even more fuel-efficient than normal and you proudly drive your car home only to realize at the moment you pull into the parking lot of your condominium association that there’s no place to charge your Volt. Yikes! What do you do now? 

As reported by WAMU 88.5, that’s exactly what happened to Ron Ball of Fairfax County, Virginia. Not only did Mr. Ball live in a condominium association with no charging station for his Volt, he also has no garage or even a designated parking space. Luckily, Mr. Ball lives in an association where the board was willing to have a serious dialogue with him and to come up with a solution to deal with charging his new car. 

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Arapahoe and Douglas Counties Focus on Fair Housing

If you read our posts, you know that we occasionally address fair housing issues in community associations. Both the federal and state fair housing acts prohibit discrimination in the provision of housing and services based on a number of protected classifications, including race, color, religion, sex, familial status, or national origin. Unfortunately, discrimination in violation of the federal and state laws continues to occur regularly.

If you or your community have concerns about whether the fair housing laws apply to you, and what you can and should do about them, Arapahoe and Douglas Counties are sponsoring a joint program called Focus on Fair Housing on Wednesday, April 20, 2011 at the Douglas County Events Center. Click here for more specific information.

In addition, we are available to consult with your association if you have specific fair housing questions.

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Sit Down and Shut Up!

I think it’s safe to say that it’s impossible to truly appreciate the beautiful things in life until you have first experienced a nasty, mud-slinging fight at an HOA meeting. Come on now – you know what I’m talking about. Here’s how this goes:

 

Pre-Meeting Strategy Session

Prior to the meeting even beginning, we have to meet to plan our attack. Do we all sit together? Do we spread out all over the meeting room? Do we take over the meeting from the board? Who should attack first? Do we play “good cop/bad cop?” Should we send out a one-sided flyer to the homeowners prior to the meeting to get them all revved-up? 

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Stop the Insanity With Open Meetings!

I just heard from Henry that the Happy Hollows HOA Board of Directors held a meeting last night and didn’t tell anyone about it. I bet they couldn’t afford that fancy snow removal service they hired for the winter and are going to cut down on the hours the pool is open to save money. They better not be planning to increase assessments!

Did you hear the Board appointed a committee to look into landscaping issues? I heard the Board President’s brother owns a landscaping company. Do you think this is some sort of scheme to give him a contract? I bet the Board President will get a kick-back on that deal!

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Harmony in HOAs - It's a Two-Way Street

The Aurora Sentinel published a story yesterday entitled Know where to turn when you have HOA nightmares. The story chronicles the troubles of a handful of residents of an HOA in Aurora. The complaints range from allegations of unfair late fees to retaliatory board members to inconsistent enforcement of covenants. Management for the HOA responded that the Board of Directors is following the governing documents in a consistent manner and homeowners are invited to address the Board as long as it’s done respectfully.

Unfortunately, these dynamics play themselves out every day in HOAs across the country. But it doesn’t have to be that way! The one thing we know for sure is boards of directors and homeowners must work together to create vibrant, healthy, livable and harmonious communities. Here are examples of how this works:

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Is Your HOA a Community or Combat Zone?

Whenever you bring two or more people together, there’s always the potential for conflict. Add to this equation a homeowners’ association (“HOA”), assessment delinquencies, foreclosures, financially strapped homeowners and a board facing tough economic decisions that could result in an assessment increase or even the dreaded special assessment. Obviously, under these conditions the potential for destructive conflict escalates through the roof. 

If these challenges existed in your HOA, how would the board and homeowners handle it? Would your association come together as a community or turn into a combat zone? It’s up to everyone in the community to decide.

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The Importance of Civility

The recent violence in Arizona and the convention of the 112th Congress have brought thoughts of civility to the front of many of our minds. Even in Colorado, legislators bicker over whether to adopt a civility pledge.

http://blogs.denverpost.com/thespot/2011/01/20/after-six-years-house-republicans-now-question-need-for-civility-pledge/21214/

People have differences of opinion at all levels of governance – homeowners and condominium associations included. Sometimes these differences are based in a genuine disagreement over what is best for the community. Other times, the disputes arise out of personal feelings, partisanship, and even the desire to cause discord.

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2011 New Year Resolutions for Boards

As we approach 2011, it’s the perfect time for boards of community associations to take a look at the approaches they are using to govern their associations and address big picture issues. Here are some New Year Resolutions boards may want to consider:

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Proxies and Written Ballots - What's the Big Difference?

We often hear the terms “proxy” and “ballot” used interchangeably. The documents are not one and the same, and Associations should take care to treat them differently.

A proxy is a document executed by an owner that grants to another person the owner’s right to vote on a given matter in the Association. Generally, an individual who cannot attend a meeting will grant a proxy to another person who will attend the meeting. This helps to ensure that the Association reaches quorum and is able to transact business, and allows the absent party to have a vote in the matters at hand.

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Tools for Handling Neighbor to Neighbor Disputes

What happens when your neighbor blasts his music too loud? Complains about your trees covering his yard? Fills his garage with fireworks for Fourth of July - and shoots them off every night for a month beforehand until midnight? Gets angry with you and dumps garbage on your lawn? What should the Association’s Board or manager do, if anything, when they receive the call from the affected homeowner?

Oftentimes, these types of problems are referred to by Boards and managers as “neighbor to neighbor” disputes. They become defined as such because they are disputes, of one nature or another, lodged by one owner against another owner, but generally do not affect either the common areas or more than a few other owners. Other common examples, in addition to those identified above, include parking, animals, and smoking.

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Annual Meetings: Planning for Success

Many associations schedule their annual member and budget ratification meetings in the last months of the year. Annual meetings give an opportunity for owners to vote on one of the primary matters within their control: the election of board members. More members typically attend these meetings than board meetings, and they expect to receive information about important association business and have a chance to ask questions about board actions. Associations should recognize the need to balance member participation and information dissemination with meeting control. No owner wants to attend long, unproductive meetings, nor do members want to show up to the meeting only to learn that they cannot conduct business due to a technical legal issue such as improper notice or lack of quorum.

Continue Reading Posted In Governance , Your Governing Documents
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The Owner-Initiated Document Amendment

We occasionally receive calls from distressed board members or managers when individual community members take steps to amend an association’s governing documents without going through a board process. Usually, a packet arrives in the board member’s or manager’s mail at the same time everyone else in the community gets the proposed amendment. This type of owner-initiated document amendment drive can result in substantial expense and, if not handled properly, can leave the association with vague, poorly drafted documents that make governance close to impossible

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The Fair Housing Act - The Handicapped Person; Reasonable Modifications and Reasonable Accommodations

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.

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The Use of Social Media in Association Governance

 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.

 

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The Importance of Covenant Enforcement

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.

Posted In Covenant Enforcement , Governance
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New Lending Rules Continued - HUD Requirements

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  here. The new HUD permanent regulations are found in HUD Mortgagee Letter 2009-46 B, and can be found here. 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.

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New Lending Rules - Fannie Mae and HUD

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.

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Duties of Volunteer Directors - What Do They Want From Us?

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).

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Rain, Rain, Go Away -- All this damage ... who will pay?

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.

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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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Fiscal Irresponsibility In Your Association? Embezzlement and What You Can Do to Help Prevent It

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.

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Towing of Illegally Parked Vehicles

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?

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Holiday Decorations And The Fair Housing Act

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.

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Pool Safety in the Fall

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.

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Should Your Covenants Be Amended?

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. 

 

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Conflict and Strife Between Associations and Their Members

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.

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Community Association 101

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.

The Colorado Common Interest Ownership Act (“CCIOA”), C.R.S. 38-33.3-101 et seq.,  was enacted in 1991 with the purpose of establishing a clear, comprehensive, and uniform framework for the creation and operation of common interest communities (including homeowners associations) in Colorado. A common interest community is defined in CCIOA as a community in which ownership of real property within the community obligates an owner to pay for the real estate taxes, insurance premiums, maintenance, or improvements of other real property (typically the common elements) within the community. Common interest communities are classified by CCIOA into three categories, (1) condominium communities, (2) cooperatives and (3) planned communities. Planned communities are typically single family home communities that Continue Reading Posted In Governance
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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.

Continue Reading Posted In Community Association News , From Capitol Hill/Legislation , Governance
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The Paperless Association - Myth or Reality?

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:

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A Condominium Map for Directions? Who Needs One?

The male gender of our species is often accused of failing to stop and ask directions, sometimes creating a fair amount of discord, particularly when being directionally challenged. Likewise, we are accused of failing to consult a map, instead, simply relying on our instincts, which often as not, turn out to be wrong. Continue Reading Posted In Governance
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Options in Covenant Enforcement

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?

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Board Disputes: If You Won't Say It in Person, Don't Say It by E-mail

Technology expedites the work of community association board members, managers, and attorneys. Technology allows us to fully consider detailed documents before convening for in-person meetings and, in some circumstances, to request board decisions in lieu of meetings. With a few clicks, we can send project bids, opinion letters, and summaries of accounts by e-mail, and post important announcements on association websites. For these and other purposes, technology can positively serve your community associations. But community association leaders must tread carefully when using technology, particularly e-mail, for association business. Board members must keep in mind their fiduciary duties to their community associations before hitting “send” to avoid getting themselves and their associations into heated disputes and potential legal binds.

 

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Community Association Legal Audit (Part 2 of 2)

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.

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FCC Bans on Exclusivity Contracts

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.

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Fair Housing Revisited

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.

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Community Association Legal Audit (Part 1 of 2)

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.

My community association has . . .

adopted the seven mandatory Senate Bill 05-100 policies

Senate Bill 05-100 requires all associations to adopt seven different responsible governance policies concerning (1) the adoption and amendment of policies, (2) board member conflicting interest transactions, (3) covenant enforcement and fines, (4) collection of delinquent assessments, (5) conduct of meetings, (6) inspection and copying of records and (7) reserve fund investments.

adopted the Senate Bill 06-89 dispute resolution policy

Senate Bill 06-89 requires all associations to adopt a policy concerning disputes between owners and the association.

updated Senate Bill 05-100 policies to conform to Senate Bill 06-89 requirements

Senate Bill 06-89 modified some of the terms of Senate Bill 05-100, creating recommended changes to the responsible governance policies.

Continue Reading Posted In Governance , Money Matters , Your Governing Documents
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Notice of Special Meeting - What Goes Inside?

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?

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Maintaining the Enforceability of Fines in Your Community

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.

Continue Reading Posted In Covenant Enforcement , Governance
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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.

Continue Reading Posted In Community Association News , From Capitol Hill/Legislation , Governance , Your Governing Documents
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Seven Steps For Insurance Protection

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?

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Checks Marked "PAID IN FULL" - A Trap?

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.  

Posted In Covenant Enforcement , Governance
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Fiduciary Duties of Board Members: An Overview

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. 

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Can You Fly Your Flag Upside Down?

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 1st 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.

  1. 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.   

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

Answer: The answer to this question is currently unclear. It has been generally held that the 1st 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.

           

Posted In Community Association News , Covenant Enforcement , Governance
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Owners Doing Work On Their Unit May Affect The Association

When townhome or condominium owners do work inside or outside of their unit, it could impact the AssociationSome 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. 

Posted In Governance
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Sex Offenders in My Neighborhood?

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. 

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Court Deference to Board Business Decisions

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.

Continue Reading Posted In Governance , What the Courts Say
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Assessments According to the Declaration - Who Cares?

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.

Continue Reading Posted In Governance , Money Matters
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Covenant Enforcement - The Golden Rule

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?”

Continue Reading Posted In Covenant Enforcement , Governance
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Why Call The Police When Your Association Can Handle the Problem?

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!!

Continue Reading Posted In Covenant Enforcement , Governance
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Financing Repairs to the Common Elements

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.

Continue Reading Posted In Governance , Money Matters
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Who Pays the Insurance Deductible?

HELLO all board members, homeowners, and those interested in HOA law.  As part of a regular feature on the blog, I will be posting a recap of an important (and hopefully interesting) issue that has been recently addressed by our office.  Since we find that the same issues tend to repeat themselves often, it is likely that you will read something your association has faced in the past.  I hope you find this feature both informational and entertaining.

This weeks topic: Who pays the deductible on the Association’s insurance policy?

A few weeks ago this question was posed to us by a mid-size condominium association following a water leak within a Member’s Unit.  Apparently the Member’s hot water heater burst, causing significant damage to the Unit’s drywall and flooring.  Shortly after the accident, the Member contacted the Association seeking to make a claim on its hazard insurance policy.  Since the Association’s policy covered the interior of the Member’s Unit, and the damages exceeded the policy's $1,000 deductible, the Association agreed to file a claim with its insurer.  However, the Association did not know who should pay the deductible amount.
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What To Do About Those Holiday Decorations?

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?

Continue Reading Posted In Covenant Enforcement , Governance
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Not Increasing Assessments? Good For You - Or Is It?

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.

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Jefferson County District Court Rules HOA Can Ban Smoking In Units

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. 

 

Posted In Community Association News , Covenant Enforcement , Governance , What the Courts Say
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How The Fair Housing Act Applies To Your Association

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.

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Contracting with Association Contractors: An Ounce of Prevention

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.

 

Continue Reading Posted In Governance , Money Matters
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Board Member Indemnification - Is it for You?

Occasionally, we receive questions about whether the Association should be responsible for indemnifying its board members and officers. The answer is resoundingly “yes”, but there are some qualifications. Continue Reading Posted In Governance
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How Enforceable Are Those Architectural Guidelines?

We frequently get questions from our clients and their managers asking about enforcement of architectural guidelines, and particularly, the ability to either require a homeowner to obtain architectural review committee approval before making improvements, or alternatively, requiring a homeowner to remove improvements already made without committee approval. While there is no universal answer, there are some generalities. Continue Reading Posted In Covenant Enforcement , Governance
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Summer Pool Fun Brings New Concerns

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.

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Common Interest Communities - A Basic Understanding

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.

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Ungated and CAI Address Homeowner Discontent

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.

Posted In Governance
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The Pool Key: to Withhold or Not to Withhold

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?

Continue Reading Posted In Covenant Enforcement , Governance , Money Matters , Your Governing Documents
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Effective Communication Key to Building Strong Community

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.

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New Board Member Jitters

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?

Continue Reading Posted In Governance
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Top Five New Years Resolutions for Community Association Volunteers and Professionals

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.

Posted In Governance
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Rules - Responsible Governance

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.

Continue Reading Posted In Governance
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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.

Continue Reading Posted In From Capitol Hill/Legislation , Governance
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Is Your Community Association Ready? Be Prepared - September is National Preparedness Month

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.

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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.

Continue Reading Posted In From Capitol Hill/Legislation , Governance , What the Courts Say
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Members' Participation Rights After SB 100

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.

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The Fear of Setting Precedents

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.

Continue Reading Posted In Covenant Enforcement , Governance
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Rights and Responsibilities

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.

Continue Reading Posted In Governance
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