May 2005

Association Boards often contact our office to determine how to deal with a regularly-occurring problem that just doesn’t seem to require or deserve the response that has customarily been given. Understandably, the Board desires to treat each owner fairly and believes that to do so, it must treat each owner similarly. However, the value of a Board of Directors is that it is composed of people who each bring their life experiences and judgment to the position. A Board need not�and in fact�should not treat each owner in an identical manner when the circumstances do not justify such treatment. Instead, the Board should exercise its collective business judgment in a good faith and reasonable manner to treat similar circumstances similarly. This is much different than treating each owner in the same manner.
Continue Reading The Fear of Setting Precedents

Community association Boards have experienced a rash of bad publicity from the local media and from the Colorado legislature. Board meetings of some associations are lasting longer than ever and often contain more strife and animosity. The task of running an association is becoming increasingly complex as well. In some cases, both Board members and owners lose sight of their ultimate goals�to administer the common elements and to promote the best interests of the residents in the community. A general outline of principles may bring the parties’ respective objectives back into focus.
Continue Reading Rights and Responsibilities

A homeowner association board of directors has a fiduciary duty to the association and its members. That fiduciary duty requires the board members to act in good faith and for the benefit of the association as a whole. Board members also have a duty of loyalty and a duty to deal impartially with beneficiaries, or members. Board members should remember the role of their fiduciary duty to the association when considering or making requests that affect the individual, private interests of any board member. One Colorado case provides a useful illustration for how boards might handle potential breaches of the fiduciary duty.
Continue Reading The Fiduciary Duty of Board Members: No “Playing Favorites” Allowed

If your association has been feeling like too many of its delinquent properties have been undergoing foreclosure by lenders, it is not alone. The country is facing increasing foreclosures overall and Colorado, in particular, has been singled out as a problem state.

We all know the havoc a lender foreclosure can wreak on the association’s collection attempts: if the association decides not to exercise its right to redeem, and thereby take ownership of the property, it loses the right to its lien�perhaps the most potent remedy an association has to collect its assessments�and is entitled only to a super lien worth six months of assessments. Is there anything we can do to limit loss in these situations?
Continue Reading Feeling the Crunch? Colorado Among Foreclosure Leaders