HOA Conflict of Interest Bill Introduced
On Friday, January 21, 2011, House Bill 1124 (“HB 1124”) was introduced in the Colorado House of Representatives. Sponsored by Representative Angela Williams, HB 1124 would amend the Colorado Common Interest Ownership Act relating to conflicts of interest of individuals serving on the executive boards of homeowner associations.
In particular, the legislation would require directors to disclose a conflict of interest "if any contract, decision, or other action taken by or on behalf of the executive board would financially benefit any member of the executive board or any person who is a parent, grandparent, spouse, child, or sibling of a member of the executive board or a parent or spouse of any of those persons. . .” In the event such a conflict exists, it must be disclosed to the executive board and the director is permitted to participate in discussions on the issue. However the director is not permitted to cast a vote on the issue. If a director violates these requirements, “any contract entered into or action taken in violation of this section is void and unenforceable.”
In addition to these proposed revisions to CCIOA, HB 1124 would not permit an individual serving on a metropolitan district board to concurrently serve on the executive board of a homeowner association which is located within the metropolitan district.
CAI’s Colorado Legislative Action Committee will be addressing this bill in the Colorado General Assembly. We will provide you with updates on the legislation as it proceeds through the legislative process.