On March 3, 2008, the Colorado General Assembly sent this legislative session’s first piece of legislation impacting Colorado community associations to Governor Ritter for signing. Upon enactment, House Bill 08-1089 will amend the Colorado Revised Nonprofit Corporation Act to provide new default procedures for board actions taken without meetings. The new legislation aims to facilitate board actions between meetings and addresses the issue of board members who cannot or do not vote on proposed matters within the necessary time period for board action. House Bill 08-1089 will not take effect until August 6, 2008, at the earliest, and remains subject to the possibility of veto or voter referendum.
Continue Reading Update on Legislation Affecting Community Associations: Board Actions without Meeting
Board Disputes: If You Won’t Say It in Person, Don’t Say It by E-mail
Technology expedites the work of community association board members, managers, and attorneys. Technology allows us to fully consider detailed documents before convening for in-person meetings and, in some circumstances, to request board decisions in lieu of meetings. With a few clicks, we can send project bids, opinion letters, and summaries of accounts by e-mail, and post important announcements on association websites. For these and other purposes, technology can positively serve your community associations. But community association leaders must tread carefully when using technology, particularly e-mail, for association business. Board members must keep in mind their fiduciary duties to their community associations before hitting “send” to avoid getting themselves and their associations into heated disputes and potential legal binds.
Continue Reading Board Disputes: If You Won’t Say It in Person, Don’t Say It by E-mail
Community Association Legal Audit (Part 2 of 2)
Community association board members fill tough roles that require a great deal of attention to association business. We understand that, as board member volunteers, you need guidance from professionals to facilitate informed decision-making, allowing you to uphold your fiduciary duties to the association that you serve. To assist you in evaluating the legal priorities for your community, we have created this Legal Audit checklist. Place a check mark in the box beside each statement that applies to your community association–and don’t forget to complete Part 1 of the Community Association Legal Audit.
My community association has . . .
? checked that the assessments charged to individual units match the allocated interests stated for those units in the association’s governing documents.
Associations must assess individual units for budgeted expenses in accordance with the allocated interests stated in the governing documents. When we advise clients of discrepancies that we note in unit assessments and allocated interests, we sometimes hear, “We’ve always done it that way; that’s what people are used to.” If the governing documents do not align with the association’s manner of assessing owners, then past mistakes do not support future disregard for the documents.Continue Reading Community Association Legal Audit (Part 2 of 2)
Community Association Legal Audit (Part 1 of 2)
Community association board members fill tough roles that require a great deal of attention to association business. We understand that, as board member volunteers, you need guidance from professionals to facilitate informed decision-making, allowing you to uphold your fiduciary duties to the association that you serve. To assist you in evaluating the legal priorities for your community, we have created this Legal Audit checklist.
Place a check mark in the box beside each statement that applies to your community association.
My community association has . . .
? adopted the seven mandatory Senate Bill 05-100 policies.
Senate Bill 05-100 requires all associations to adopt seven different responsible governance policies concerning (1) the adoption and amendment of policies, (2) board member conflicting interest transactions, (3) covenant enforcement and fines, (4) collection of delinquent assessments, (5) conduct of meetings, (6) inspection and copying of records and (7) reserve fund investments.
? adopted the Senate Bill 06-89 dispute resolution policy.
Senate Bill 06-89 requires all associations to adopt a policy concerning disputes between owners and the association.
? updated Senate Bill 05-100 policies to conform to Senate Bill 06-89 requirements.
Senate Bill 06-89 modified some of the terms of Senate Bill 05-100, creating recommended changes to the responsible governance policies.
Continue Reading Community Association Legal Audit (Part 1 of 2)
Sex Offender Alert Scam
On August 1, 2007, the Denver Police Department notified Denver City Council members of a scam that has raised some concern among residents in the Denver metropolitan area. If you recently received a flyer on your door about a sex offender relocating to your neighborhood, please continue reading the following announcement from the Denver
Fiduciary Duties of Board Members: An Overview
Board members and managers often ask us to explain the fiduciary duties of board members to the community associations that they serve. We have compiled some information to guide directors in their roles. As you read this information, you will discover that, at the most basic level of decision-making, directors must make reasonable decisions after considering the information available. In advising boards, we recommend that directors try to recognize the emotions involved in a given situation and avoid letting the emotions, rather than the facts and interests of the association, guide the decision-making process.
What is a fiduciary? Webster’s Dictionary defines "fiduciary" as follows:
adj. of, relating to, or involving a confidence or trust: as a : held or founded in trust or confidence b : holding in trust c : depending on public confidence for value or currency
Fiduciary duties arise from special relationships that the law recognizes. Examples of fiduciary relationships include doctor-patient, attorney-client, trustee-beneficiary, and board of directors-corporation. Continue Reading Fiduciary Duties of Board Members: An Overview
Sex Offenders in My Neighborhood?
Many states have enacted Megan’s Laws which allow for public notification of convicted sex offender presence within the community. In Colorado, individuals may obtain information about sex offenders through the Colorado Bureau of Investigation’s website and through local law enforcement. The CBI website permits any private citizen to search his or her zip code and find the whereabouts of sex offenders that fall into the following categories: sexually violent predator, multiple offender, and failed to register. Other sex offenders are not listed on the website but citizens may request their information from local authorities.
In some cases, where the court determines that the sex offender poses a predatory risk to the community, the court may require community notification of the offender’s presence. Community notification consists of a community meeting to which community members, schools, senior citizens, and recreation facilities in the area where the sex offender intends to locate receive a direct invitation. At the community notification meeting, local law enforcement personnel present educational information about sex offenders, risks to the community, and cautionary steps that parents and children may take to protect themselves, and then reveal the identifying information about the sexually violent predator. Community notification only occurs in the most extreme cases. In most, if not all, cases, offenders are only released into the community after they have served a criminal sentence, undergone evaluations, and participated in some form of rehabilitation. Continue Reading Sex Offenders in My Neighborhood?
Community Association Summer Events: Licensing Your Music and Movie Use
The first day of Spring and the recent sunshine and warm temperatures may have prompted you to start thinking about your Association’s Summer event calendar. If your Association’s list of events includes outdoor movie nights, concerts, or other performances, the Association may need to pay licensing fees. United States copyright laws protect composers, lyricists, music publishers, and movie producers and distributors, among others. Community associations that play music in recreational facilities, at festivals or at other events likely need to obtain the appropriate licenses to use the music. With few exceptions, showing movies also requires licensing. Continue Reading Community Association Summer Events: Licensing Your Music and Movie Use
Community Associations in the News
Colorado community associations are making headlines. A few weeks ago, a Pagosa Springs peace wreath made national news. Our own Mark Payne weighed in on the topic on Denver’s Channel 7. You can watch the newscast here. The homeowner association later allowed the homeowner to keep the wreath on display for the holidays.
Just this week, the family of an autistic child filed a lawsuit in federal district court against their homeowners association in Littleton, Colorado. According to news reports, the homeowners seek approval of a six-foot privacy fence that they installed to help protect their eight-year-old son. The lawsuit’s claims fall under the Fair Housing Act.
Contracting with Association Contractors: An Ounce of Prevention
As legal counsel for community associations, we assist our clients with the various types of conflict that arise in the course of association business activities. We understand that conflict can sometimes escalate to a level that requires court intervention. We also know that certain preventative steps can help to alleviate the time, expense, and emotional drain that come with litigation. In particular, good contract drafting can help to minimize the impact of disputes between associations and their contractors. We encourage our clients to seek legal advice when entering into contracts for management services, landscape maintenance, capital improvements, and any other project or service that involves a relationship with an independent contractor. The following reminders come directly from our experience advising community associations:
A bid or proposal form, while legally binding, is not a good contract. While signing a bid or proposal form may bind the association to pay for services performed by the contractor, the association does not receive any protections as part of the bargain. We recommend contracts that contain specific provisions which, at the very least, address the scope of work, insurance coverage, payment terms, remedies for default or breach, and attorney fees for the prevailing party in any dispute that may arise under the contract terms. Bid forms do not typically include these recommended contract terms.
Continue Reading Contracting with Association Contractors: An Ounce of Prevention