On January 11th, Representatives Dafna Michaelson Jenet (D) and Colin Larson (R) introduced House Bill 19-1076 (“HB 1076”), which would amend the Colorado Clean Indoor Air Act. In addition to prohibiting smoking in many public places, the Clean Indoor Air Act also currently prohibits smoking in the restrooms, lobbies, hallways and common areas of HOAs in Colorado.

From the HOA perspective, HB 1076 would not change the fact that folks are prohibited from smoking in the restrooms, lobbies, hallways and common areas of HOAs.  However, the bill does amend the definition of “smoking” to broaden that definition to include a prohibition on the smoking of electronic smoking devices like e-cigarettes.

HB 1076 defines “Smoking” as “Inhaling, exhaling, burning, or carrying any lighted or heated cigar, cigarette, or pipe or any other lighted or heated tobacco or plant product intended for inhalation, including marijuana, whether natural or synthetic, in any manner or in any form.  “Smoking” also includes the use of an Electronic Smoking Device.”

In addition to amending the definition of “Smoking,” HB 1076 also provides that smoking is only permitted outside of the entryway of an HOA (and other public places) if the smoking takes place at least 25 feet outside of the entryway.  Currently, the Indoor Clean Air Act permits smoking which is at least 15 feet outside of any entryway.

Finally, HB 1076 eliminates exemptions to the Indoor Clean Air Act and eliminates the ability in some settings to create areas where folks are permitted to smoke.  However, these provisions of HB 1076 do not apply to HOAs.

HB 1076 will be heard before the House Health and Insurance Committee on January 30th at 1:30 pm.  Stay tuned to this blog for updates on HB 1076 as it proceeds through the legislative process.

On January 4th, the 2019 Colorado Legislative Session opened.  With both chambers of the General Assembly controlled by the Democrats, it will be interesting to see the types of bills which will be introduced that impact HOAs in Colorado.

While it will be particularly interesting to see whether a bill will be introduced to preserve the licensure of community association managers in Colorado, I have to say that the first HOA bill to be introduced is a real chin scratcher.  In fact, at least from the HOA perspective, my first impression was this xeriscaping bill is a solution in search of a problem to fix.

Representative Brianna Titone, a Democrat from Jefferson County, has introduced House Bill 19-1050 (“HB 1050 “) which would in part stop HOAs from prohibiting the use of xeriscape or drought-tolerant vegetative landscapes to provide ground covering to the common elements of common interest communities (commonly referred to as “HOAs”).  Since the boards of HOAs (and sometimes the architectural control committee, if the declaration for an  HOA provides the ARC with control over common element landscaping) typically have exclusive control over the landscaping on the  common elements, why would they need a statute to provide them with the right to xeriscape on their common elements???

While the HOA specific provision of HB 1050 is not necessary to promote the installation of xeriscapes on common elements, I am concerned that this provision could wrongly imply that owners have the right to install xeriscapes on the common elements of their HOAs.  Hopefully, CAI’s Colorado Legislative Action Committee (“CLAC”) will identify this potential problem and run an amendment to address it during the hearing before the House Energy & Environment Committee, which has not yet been scheduled.

Keep your eye on this blog for updates on HB 1050 as it proceeds through the legislative process.

 

And knowing is half the battle. – G.I. Joe

When owners in community associations sell their homes, associations and their management companies inevitably get involved in the transactions by providing governing documents for the buyers’ review and status letters showing assessments and other amounts due at the time of closing. These document disclosures typically fall within the sellers’ obligations under Section 7 of the Colorado Real Estate Commission-approved Contract to Buy and Sell Real Estate (Residential).

Effective January 1, 2019, the standard residential real estate contract form includes additional documents that sellers must disclose to buyers. This means that associations and their management companies will receive requests for different documents starting January 1st. The following table lists the documents required under the old contract and those that associations and management companies will need to gather and provide as of January 1, 2019, under the new contract:

OLD CONTRACT NEW CONTRACT
Declarations Declarations
Articles of incorporation Articles of incorporation
Bylaws Bylaws
Articles of organization Articles of organization
Operating agreements Operating agreements
Rules and regulations Rules and regulations
Party wall agreements Party wall agreements
Responsible governance policies adopted under § 38-33.3-209.5, C.R.S.
Minutes of most recent annual owners’ meeting Minutes of the annual owners’ or members’ meeting; such minutes include those provided under the most current annual disclosure required under § 38-33.3-209.4, C.R.S. and minutes of meetings, if any, subsequent to the minutes disclosed in the Annual Disclosure. If none of the preceding minutes exist, then the most recent minutes, if any.
Minutes of any directors’ or managers’ meetings during the six-month period immediately preceding the date of the Contract. If none of the preceding minutes exist, then the most recent minutes, if any. Minutes of any executive boards’ or managers’ meetings; such minutes include those provided under the most current annual disclosure required under § 38-33.3-209.4, C.R.S. and minutes of meetings, if any, subsequent to the minutes disclosed in the Annual Disclosure. If none of the preceding minutes exist, then the most recent minutes, if any.
List of all Association insurance policies as provided in the Association’s last Annual Disclosure, including, but not limited to, property, general liability, association director and officer professional liability and fidelity policies. The list must include the company names, policy limits, policy deductibles, additional named insureds and expiration dates of the policies listed.
A list by unit type of the Association’s assessments, including both regular and special assessments as disclosed in the last Annual Disclosure.

The most recent financial documents which consist of:

(1) annual and most recent balance sheet

(2) annual and most recent income and expenditures statement

(3) annual budget

(4) reserve study, and

(5) notice of unpaid assessments, if any.

The most recent financial documents which consist of:

(1) the Association’s operating budget for the current fiscal year

(2) the Association’s most recent annual financial statements, including any amounts held in reserve for the fiscal year immediately preceding the Association’s last Annual Disclosure

(3) the results of the Association’s most recent available financial audit or review

(4) list of the fees and charges (regardless of name of title of such fees or charges) that the Association’s community association manager or Association will charge in connection with the Closing including, but not limited to, any fee incident to the issuance of the Association’s statement of assessments (Status Letter), any rush or update fee charged for the Status Letter, any record change fee or ownership record transfer fees (Record Change Fee), fees to access documents

(5) list of all assessments required to be paid in advance, reserves or working capital due at Closing

(6) reserve study, if any.

Any written notice from the Association to Seller of a “construction defect action” under § 38-33.3-303.5, C.R.S. within the past six months and the result of whether the Association approved or disapproved such action.

These changes to the contract incorporate annual disclosure requirements that have applied to community associations since 2005 under Section 209.4 of the Colorado Common Interest Ownership Act (“CCIOA”). Even though associations must provide many of these documents at no cost to individual owners pursuant to CCIOA, associations can charge to fulfill title company requests for these documents.

The 2019 Contract to Buy and Sell Real Estate may affect the timing for status letter requests as well. A new provision in the contract requires the seller to request a status letter “at least fourteen days prior to the Closing Date.” Associations and management companies may need to adjust procedures to ensure that payoff amounts remain accurate for longer periods of time.

With these new requirements in mind, associations and their management companies can take the following steps to prepare for and comply with requests under the new standard real estate contract:

  • Gather and maintain all documents required for disclosure under the standard contract form.
  • Determine pricing, if any, for the bundle of documents required under the contract.
  • Consider whether to offer the status letter as part of the document bundle or on its own for a separate fee.
  • Update management contract terms to reflect any pricing for the new document package and/or status letter.
  • Consult with legal counsel as needed.

Now you know!

Winzenburg, Leff, Purvis and Payne, LLP is pleased to announce the next session of our Warehouse Lecture Series. Register today for the November 30, 2018 classes!

The Series comprises regular half-day sessions, providing four hours of DORA-approved Community Association Manager Continuing Education credits. We are separately seeking CMCA approval for the classes from CAM-ICB.

The next session of 2018 will cover topics relating to Current Issues in Association Collections and will take place Friday November 30, 2018, from 8:30 a.m. to 12:30 p.m.  This is a great opportunity for managers, Board members, account technicians, and everyone who has any interest in learning about the collection process from start to finish.   You will learn the steps to take before turning a file over to the attorney for collections and the process after an account is turned over.  We will discuss mediation, litigation, receiverships, foreclosures, and everything you never knew you needed to know about the process.

Session topics include the following:

  • Pre-Attorney Collections (1 hour)
  • The Effects of Bankruptcy on an Association’s Collection of Assessments (1 hour)
  • Collection of Delinquent Assessments: Protecting Your Association’s Fiscal Health (2 hours)

Please e-mail Allison Grout at agrout@wlpplaw.com to register.

On Wednesday, the New York Times reported that the owners of units in the building formerly known as Trump Place had voted to remove the name from the building. The building will now be known by its address, 200 Riverside Boulevard.

A 2000 licensing agreement with the Trump Organization allowed the use of President Trump’s name on the building. As political sentiments changed, community members wanted to remove the name. One resident stated she would not remain in the building with the Trump branding. While community members wanted to remove the name, the Trump Organization claimed the 2000 agreement prevented this removal. In response, the community sought a declaratory judgment. The court determined that the 2000 agreement required superluxury maintenance, but did not require use of the Trump name. With a substantial number of owners voting to remove the name, and no appeal of the court’s decision, the letters came off the building this month.

The use of declaratory relief in this case allowed the community to determine whether it had the right to remove the name without forcing the Trump Organization to file a lawsuit to stop the removal from happening. This offensive use of declaratory relief likely saved the homeowners substantial legal fees, and is a viable means of determining the rights and obligations between parties to a contract without first forcing a breach of that contract.

Colorado gives courts the power to declare the rights, status, and other legal relations between parties to a written instrument, which could include a contract with the declarant, the Declaration itself, or even a provision of CCIOA. Be careful, however, as all homeowners may have to be joined in as parties to a declaratory judgment action for the judgment to apply to everyone. These actions are not to be taken lightly, and you should consult carefully with legal counsel before asking a court for this extraordinary relief.

Snow season is upon us! Most communities have secured their vendors for the season, with signed contracts already in place. For many communities, those snow removal contracts include snowfall triggers that obligate the vendor to mobilize and fulfill the contract obligations once a specific snowfall threshold is reached, such as two inches of snow. The threshold set in the contract drives both the cost to the association and the priority for vendor mobilization. In other words, if an association chooses a higher threshold of, say, three inches, the association will pay less but will also fall farther down the line of vendor priority when a heavy snowfall occurs because vendor crews will tackle one inch and two inch trigger properties first. Association boards must weigh these factors and make business decisions according to their communities’ needs when deciding on contract terms.

Boards should also consider potential liabilities as part of the snow contract negotiating and decision-making process. This attention to potential liabilities especially holds true now, after passage of Senate Bill 18-062 (“SB 18-62”) by the Colorado legislature. Senate Bill 18-62 addresses snow removal vendor liability in the context of contract terms. Generally, SB 18-62 creates a new statutory provision—C.R.S. 13-21-129—that makes void any contract term that would require a vendor to indemnify, hold harmless, or defend an association when damages or injuries result from the association’s acts or omissions if the contract or other writing prohibits the vendor from mitigating a “specific snow, ice, or other mixed precipitation event or risk.”

This statutory language, known as the Snow Removal Service Liability Limitation Act, introduces new legal protections for vendors and begs attention to different scenarios that could result in association responsibility for injuries from snow and ice accumulation on common areas. Association boards should take the following steps to protect their communities from potential consequences related to snow removal under the new law:

Submit any snow removal contract for review by the association’s attorney. Even if the association’s attorney drafted the contract originally, the new law should prompt legal review and updates. In consultation with legal counsel, the association may decide, among other things, to (1) alert the vendor to the expectation that the board receive communication about any problem areas on the property and options for how to address the issues most effectively and efficiently and (2) clearly state that the vendor remains responsible to indemnify, hold harmless, and defend against damages resulting from vendor’s acts or omissions unrelated to mitigation.

Discuss insurance coverage with the association’s broker, and update insurance as appropriate, in light of the new law and any contract updates.

Implement proper risk management, such as signage, ice melt, and proactive attention to drainage concerns, to help avoid slip and falls and escalating costs under the vendor contract during the snow season.

Communicate with owners about snow removal expectations throughout the community. Minimizing liability involves educating residents about risks on the property and how to protect themselves during Colorado winters.

Earlier this year, the Colorado General Assembly enacted one of the most stringent data protection laws in the country. This law applies to Colorado businesses and governmental entities as well as third-party vendors who collect and maintain personal identifying information (“PII”). C.R.S. 6-1-713 defines PII as “a social security number; a personal identification number; a password; a pass code; an official state or government-issued driver’s license or identification card number; a government passport number; biometric data, as defined in section 6-1-716 (1)(a); an employer, student, or military identification number; or a financial transaction device, as defined in section 18-5-701 (3).” This definition includes bank account and debit/credit card information.

Effective September 1, 2018, associations, management companies, and their vendors that collect and maintain PII must adopt policies concerning the protection of that information and procedures for handling breaches and destruction of documents containing PII.

Our attorneys can assist with the preparation of a policy for your association. Please contact us to discuss your association’s needs related to this new data breach law. We look forward to helping you with this compliance issue before a breach occurs.

Welcome to the Colorado Homeowners Association Law blog! Winzenburg, Leff, Purvis & Payne, LLP attorneys seek to provide timely information on news, legislation, and common issues facing community associations in Colorado. You can receive this information directly in your email inbox by following these steps:

  • In the bottom right-hand corner of this page you will see the “Subscribe” button
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  • Wait for delivery of posts in your inbox.

We hope you find this resource helpful in your management and governance of your HOA and understanding of community association living. That said, these blog posts do not constitute legal advice. If you need assistance with a legal issue involving your association, please contact one of our attorneys.

As reported here last month, Colorado House Bill 18-1342 becomes effective July 1, 2018. It was signed by the Governor’s office on June 8, 2018. It requires that all common interest communities, except those in which the declaration contains maximum assessment amounts or limits the increases in the annual budget, follow the process set out in Section 303(4) of CCIOA, which requires that the association’s board of directors adopt the annual budget. Then, within 90 days after adoption of the proposed budget, the board must mail, or otherwise deliver (which may include posting on the association’s website), a summary of the budget to all owners and set a date for a meeting for the owners to consider the budget. The meeting must take place within a reasonable period of time after the mailing or delivery, and in accordance with the association’s bylaws. Notice of the meeting must be provided as required by the bylaws. Continue Reading Budget Consideration for Pre-CCIOA Communities

 

Our Warehouse Lecture Series offers regular half-day class sessions, providing four hours of DORA-approved Community Association Manager Continuing Education credits. The second session of 2018 is scheduled for Friday, June 15, 2018. The classes will take place in our warehouse classroom behind our offices in Ken-Caryl. Session topics include Fair Housing Accommodations and Modifications, Assistance Animals, Bad Document Provisions and Document Amendments, and Rental Restrictions.

Please email Allison Grout at agrout@wlpplaw.com for more information, registration fees, or to register. Special rates apply for registration and prepayment made by May 31, 2018.