Lindsay S. Smith

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The heat hitting Denver this weekend has reminded several clients to ask us to review their pool rules.  Community associations are "housing providers" under the Federal Fair Housing Amendments Act, and thus our pool rules need to comply with Fair Housing requirements.  

Fair Housing prohibits housing discrimination based on the following factors:

  • Race
  • Color
  • Religion
  • Sex
  • National Origin
  • Familial Status
  • Disability 

A rule that might seem reasonable and appropriate to a community, such as requiring all children to wear swim diapers, can result in a Fair Housing complaint.  If you’re revising your rules, look to objective guidelines for your restrictions.  Health and safety requirements apply to everyone, regardless of whether they are a member of a protected class.  It is possible to create rules that accomplish your goals without running afoul of the law.  Talk to your attorneys to ensure that your concerns are appropriate, and that your restrictions are expressed in a manner that protects your community from a Fair Housing complaint.

In the meantime – stay cool out there!

Congratulations to Molly Ryan of Metro Property Management, Inc. and Jared Theis of Community Management Specialists, Inc.!  You are the winners of our mint julep baskets.  We will be in contact with you shortly so you can claim your prizes.  Thanks to everyone who stopped by to see us at the CAI-RMC Spring Showcase.  We had a great time!

It’s the first Monday of 2016, and while some of us might still be shaking off the eggnog, time passes and deadlines arrive.  Remember to comply with your annual disclosure and registration obligations before your deadlines arrive, and take some time for education while you’re at it!

Annual Disclosures. Within 90 days of the conclusion of the fiscal year, an HOA must notify its members, at no cost, of certain information. It may do this by posting the information on its website with mailed notice to members, maintaining a notebook at its principal place of business, or by mail or personal delivery. The required information includes the following:

  • The date on which the fiscal year commences;
  • The HOA’s operating budget for the current fiscal year;
  • A list, by unit type, of the HOA’s current assessments (both regular and special);
  • The annual financial statements, including any amounts held in reserve for the fiscal year immediately preceding the current annual disclosure;
  • The results of the HOA’s most recent financial audit or review;
  • A list of all association insurance policies, including company names, policy limits, policy deductibles, additional named insureds, and expiration dates;
  • The HOA’s bylaws, articles of incorporation and rules and regulations;
  • The minutes for board and member meetings for the fiscal year immediately preceding the current annual disclosure;
  • The HOA’s Responsible Governance Policies, often referred to as "SB 100 Policies."

Division of Real Estate Registration. An HOA’s registration is good for one year. Check your registration and re-register, or contact us to register for you. Registration is required if the HOA is going to undertake enforcement activity.

Secretary of State Reports. While you are re-registering with the Division of Real Estate, verify that your HOA has filed its annual report and is in good standing with the Secretary of State. This is another filing required for the HOA to have the power to assert its legal rights.

Board Education. If your HOA held its annual meeting in the fourth quarter, you likely have one or more new board members. Educate new board members, and remind veteran members, of their obligations under the Revised Nonprofit Corporation Act and CCIOA. Proper education can prevent unintentional bad acts, and the expenses related to education can be accounted for as a common expense.

Happy New Year from everyone at Winzenburg, Leff, Purvis & Payne!

Today, the Colorado Court of Appeals issued an opinion addressing the statutory declaration amendment process set forth in C.R.S. 38-33.3-217(7).  This process allows community associations that have sought to amend their declaration, and received fewer approvals than required to amend the declaration outright, to obtain a court order that approves the amendment notwithstanding the vote result. 

The statutory process is pretty black-and-white; if the Association complies with the statute’s requirements and fewer than 33% of those entitled to vote file written objections, the court "shall" approve the amendment.  "Shall" is mandatory, but some courts have declined to approve petitions notwithstanding this language.

In Centennial Ranch and Aspen Mountain Ranch Association v. Fuller et al., 14CA1326, the Court of Appeals held that when a court determines that a community association has met the requirements of Section 217(7), it errs if it denies the petition to amend.  The Court of Appeals further determined that another community association case analyzing the substantive impact of an amendment did not expand the statutory criteria for the court’s analysis of a petition to amend. 

We have always considered the process in Section 217(7) be fairly straightforward, and are pleased to have a Court of Appeals decision that supports our analysis.  It’s more important today than ever to make sure your amendment process complies with the Section 217(7) requirements, and to make sure that you comply before you end up with insufficient voter turnout. 

Oh yes we can.

It is not unusual for us to encounter communities with strict restrictive covenants that have not been enforced in a strict manner.  Much of the time, this is due to apathy or ignorance.  In other circumstances, Board turnover results in more or less enforcement.  Some Boards hate to enforce against their neighbors, and offer so many variances the covenants might as well not even exist.  Some Boards will interpret documents in a manner different than other, future Boards, but when the documents remain the same, we have to figure out what to do to follow those documents in light of the community’s history.

A recent case in California provides a bit of guidance for those of us facing the historical enforcement challenge.  In The Villas in Whispering Palms v. Tempkin<!–, No. D065232 (Cal. Ct. App. May 18, 2015), No. D065232 (Cal. Ct. App. May 18, 2015) the California Court of Appeals held that an association board that had historically offered numerous variances to a one-dog rule was not required to offer variances.  The homeowner claimed the Board was unreasonable because it had provided variances and allowed multiple dogs in the past.  The Court ruled that the Association’s prior variances did not impact its ability to deny the requested variance.

Continue Reading You Can’t Enforce That!!!

NOW OFFERING

CLASSES FOR THE COLORADO LAW PORTION

OF

THE MANAGER LICENSE EXAM

 

As you all know, the July 1st deadline for Colorado community association manager licensing is fast-approaching. We’re hearing a lot of “buzz” about the Colorado law portion of the licensing exam. Many managers have asked for a consolidated review of Colorado laws to help prepare for the test. With your requests in mind, we are excited to announce classes on the areas of Colorado law that community association managers need to know.

Continue Reading Manager Licensing Class Registration

I don’t typically make New Year’s resolutions because I believe that if something needs to be fixed, it should be fixed at that time – not on an arbitrary date.  However, many folks do like their resolutions, and I’ve heard several resolutions from my clients. 

We resolve to adopt our policies.  The responsible governance policies mandated by Senate Bills 100 and 89 have been required for nearly a decade!  Adopt your policies, already!

Continue Reading New Year’s Resolutions

My household includes a Grinch and a Clark Griswold.  "Clark’ wants to put up holiday decorations last weekend.  "The Grinch" thinks holiday decorations are overly-expensive cat toys to be avoided at all costs.  The Grinch received the following poem by Nena Groskind this morning, and somehow is now in a bit of a Christmas mood.  We hope you enjoy it as much as we have, and prepare reasonable rules and regulations in the spirit of the season!

Continue Reading A Community Christmas Carol (sort of)

In 2012, the Colorado legislature changed the laws governing community association records, including requirements that Board members’ e-mail addresses be retained as official records.  At first, many of our clients balked at the new requirement.  As many of you are aware, it’s very easy to allow electronic communications to become uncivil, and Board members didn’t want these communications going to their private or work e-mails.

To address these concerns, we recommend that our association clients create e-mail addresses for the Boards, and that the Boards pass these along to new Board members as they are elected.  This ensures continuity of communications for homeowners, and it also protects Board members from the risk of having their personal or work e-mails subject to discovery in the event of litigation.  Board members can also create their own personal association e-mail addresses, although this does not have the bonus side of maintaining continuity as the Board turns over. Either way, Board members should have dedicated association e-mail addresses.

Continue Reading Board Communications and E-mails

It is not uncommon for homeowners to wonder where all their dues are going.  Some owners might see their dues go up with no visible changes to the property and even get suspicious.  Of course, associations often bear a lot of expenses that are not directly related to property condition, such as insurance, management, and legal fees.  Nevertheless, owners have the right to know what their association is doing with their assessments.

If a homeowner wants to know where the money is, he or she should first request the association’s annual financial statements.  These statements are an association record, and the owner has a right to view them.  The Colorado legislature intends that these statements be available at no cost to the owner, so it is advisable for associations to keep them readily available in an electronic format.

If the annual financials do not satisfy the owner, an audit or review may be an option.  Audits are performed at the discretion of the board, but members are empowered to demand audits in limited circumstances.  If the association has annual revenues or expenditures of at least $250,000.00 and at least one-third of the owners request the audit, the Association must obtain an audit using generally accepted auditing standards, performed by a certified public accountant.  If the Association has revenues or expenditures below $250,000.00, a third of the owners are entitled to demand a review, rather than an audit.

Audits are expensive, and if you find yourself in a situation where owners are requesting an audit or review, listen to the request.  There is a reason for the dissatisfaction, and if the association has properly conducted business, the audit or review will support the board’s conduct.