Rewritten Transfer Fee Bill Sails Through the House!
House Bill 14-1254 (“HB 1254”) has just cleared the Colorado House of Representatives and will soon be introduced in the Senate. HB 1254 was heard last Thursday in the House Business, Labor, Economic & Workforce Development Committee. After extensive testimony on the bill by CAI members and illuminating questioning led by Representative Chris Holbert (R-Douglas County), the bill was unanimously reported out of the House Business Committee with no amendments and with a favorable recommendation to the full House of Representatives. The House passed the bill on 2nd reading yesterday. The full House passed HB 1254 on 3rd reading this morning with no amendments and a vote of 58 to 8 in favor of the bill, with 3 Representatives excused from the morning session and not voting.
The original draft of the bill, that was not introduced, would have capped transfer fees charged by management companies at $50.00. Obviously, management companies have every right to be compensated for the services they perform that are related to the sale of a home in an HOA and the costs attributed to the sale of an individual home should not be charged to all of the homeowners in an HOA. Instead, these are closing costs related to the sale of a particular home. Had the original draft version of this bill been introduced and passed, it would have led to an increase in assessments for all HOAs in Colorado since management companies would have been forced to increase their management fees to recover the costs of work performed on the sale of individual homes.
The version of HB 1254 which was ultimately introduced and passed by the House today, requires managers and management companies to disclose during negotiations on management contracts, and thereafter on a yearly basis, the fees and charges imposed as part of their management of associations and any other remuneration received as a result of the relationship which managers and management companies have with their associations. In other words, managers and management companies would be required to disclose any funds they receive from third parties that are in any way related to the associations they manage. Managers and management companies who fail to make these disclosures would be subject to investigation and discipline by the Division of Real Estate.
CAI’s Colorado Legislative Action Committee has actively supported passage of HB 1254. Stay tuned for more updates as the bill continues to proceed through the legislative process. We expect HB 1254 to be read across the desk soon in the Senate and assigned to a committee.
Molly Foley-Healy is Chair of CAI’s Colorado Legislative Action Committee.