Homeowner Associations - The Legislative Gift That Keeps on Giving

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

●Legislators routinely receive constituent complaints relating to HOAs. Whether testifying on a bill in committee or informally meeting with legislators – it’s rare that constituent complaints are not mentioned. Concerns legislators have been receiving range from associations allegedly rummaging through trash to enforce recycling restrictions to failure to hold open meetings to refusing to produce association records to homeowners. While legislators are savvy enough to realize there are two sides to every story, these complaints still keep HOAs front and center in their minds. 

●HOA governance continues to be an ongoing concern legislatively. Beginning a handful of years ago with the passage of Senate Bill 100 (“SB 100”), which requires associations to adopt responsible governance policies, legislators have continued to refine and expand upon the governance provisions of the Colorado Common Interest Ownership Act (“CCIOA”). This year is no exception. House Bill 1124 addresses the provisions that must be included in the SB 100 policy concerning conflicts of interest of board members. The bill also requires individuals running for a position on a special district board to disclose whether they serve on the board of an HOA located within the special district. HB 1124 has already cleared the House and is expected proceed through the Senate.

 

Interestingly, the governance provisions of CCIOA were actually given a thumbs-up by Representative Cindy Acree in House Bill 1110 (“HB 1110”). In that bill, Representative Acree seeks to amend the Colorado Nonprofit Corporation Act to extend governance provisions of CCIOA to “residential nonprofit corporations.” It has certainly been a breath of fresh air for the governance provisions of CCIOA to be recognized legislatively as “best practices” in HB 1110. HB 1110 has cleared both the House and Senate and will be soon heading to Governor Hickenlooper for action.

  

Legislation affecting the ability of HOAs to effectively and efficiently collect assessments continues to be a trend this session. Senate Bill 122 (“SB 122”), which was defeated in the Senate Judiciary Committee, would have affected the ability of HOAs to assign lien rights as a method to collect the delinquent assessments of owners losing their homes in public trustee foreclosures. In addition, House Bill 1197 (“HB 1197”) – as originally introduced – would have had a devastating affect on the superlien associations have under CCIOA. Stakeholders worked for countless hours to rewrite the bill in a way that benefited both HOAs and lenders. Unfortunately, these efforts were dashed at the 11th hour and HB 1197 is dead for the session.

 

In addition to these trends, many legislators have worked closely with CAI’s Colorado Legislative Action Committee (“CLAC”) to understand how bills impact HOAs and to rewrite legislation in a balanced manner. 

 

While we are halfway through the legislative session, there’s no time to rest.  We must remain vigilant for late status bills that could impact associations.