The Legislature In Session - An Ombudsman for Everyone

Like the changing of seasons, our legislature has returned, and with it, numerous ideas on how our lives can be better regulated. Over the last several years, we have had several legislators who take a particular interest in the operations of homeowners associations. They have an interest in protecting what, in their minds, are under-represented homeowners.

Along those lines, this year Representatives Ryden and M. Carroll have introduced HB10-1278, which, if passed, will create an HOA ombudsman in the Colorado Division of Real Estate. The HOA ombudsman would be appointed by the Executive Director of the Colorado Department of Regulatory Agencies. The ombudsman would be required to have at least five years of experience working with issues arising under the Colorado Common Interest Ownership Act (“CCIOA”), or in the operation or management of associations as either an attorney, accountant, a member of an executive board or any combination thereof.

Currently, there is no state agency supervising the operation of HOAs or enforcing compliance by either individual homeowners or HOAs with the requirements of state law. The bill directs the Secretary of State to collect a surcharge on registration fees of HOAs that are organized as nonprofit corporations to pay the direct and indirect costs of the ombudsman's office. Section 4 of the bill outlines the ombudsman's powers and duties. Of particular interest is a provision, as currently drafted, that requires the ombudsman to: (I) advocate for the rights of unit owners in the governance of unit owners’ associations and offer to mediate disputes, but shall not purport to give legal advice to any party; (II) act as a clearing house for information concerning the rights and duties of unit owners, declarants, and unit owners’ associations under CCIOA; (III) report suspected violations of the new law or rules of the Division of Real Estate; and (IV) report other suspected violations of law to the appropriate authorities.

At this point it is impossible to tell where this bill will end up. But the message seems clear: associations, across the board, need to make sure that their governance is responsible and fair. This has been an ongoing theme since the introduction of S.B05-100 in 2005. If passed, this law will once again change the way associations do business.

We will keep you posted about the progress of this bill. Please check back here regularly for updates.