Community Association News

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!

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.

It’s time for the Rocky Mountain Chapter of CAI’s Spring Showcase!  In honor of the Kentucky Derby, the theme this year is Race to Success.  Winzenburg, Leff, Purvis & Payne will be exhibiting and we hope you will stop by booth 515 to say hello and to enter a drawing for two Mint Julep Baskets.  Come and hang out with us, we won’t make you muck out the stall!

HOA transfer fees are getting some attention in the news again this week. In particular, news coverage has focused on demands that HOA property management companies provide invoices for the transfer fees charged to buyers or sellers of properties within HOAs. There is good news for buyers and sellers in HOAs: access to transfer fee information is already available.

What exactly are transfer fees? Colorado statutes address transfer fees in the three following ways that are relevant to HOAs and their members:

  1. The Colorado Revised Nonprofit Corporation Act expressly authorizes nonprofit corporations to impose transfer fees upon their members unless the articles of incorporation provide otherwise. Most HOAs are formed as nonprofit corporations and have this right to impose transfer fees.
  2. The real property statutes prohibit certain transfer fee covenants, such as those intended to benefit a person or entity who does not hold an interest in the property burdened by the covenant. But transfer fee covenants for fees payable to homeowner associations are not prohibited and are recognized by statute as valid fees.
  3. Community association management companies typically contract with the HOAs they manage to charge transfer fees to the buyers or sellers of properties within those communities. The community association manager statutes and licensing rules impose explicit requirements on managers concerning these transfer fees. Those statutes and rules are the good news for buyers and sellers, and all owners, who want to know what transfer fees apply in their HOAs.

So what rights do owners, buyers, and sellers have to access transfer fee information?

Continue Reading HOA Transfer Fees: Access to Information Available Now

As the leader in providing educational opportunities for affordable housing and free market HOAs in Aspen and Pitkin County, the Aspen Pitkin County Housing Authority ("APCHA") will be hosting another free seminar on September 15th entitled:  Covenant and Rule Enforcement in HOAs:  What Boards and Homeowners Need to Know.  Here’s a description for the seminar:

What do you mean I can’t use my garage as a storage shed and have to park my car in it?  You can’t tell me what I can and cannot do in my own garage! 

There is no doubt about it, the enforcement of covenants and rules in HOAs can be a nightmare for HOA boards and homeowners.  However, it doesn’t have to be that way!  This class will focus on use restrictions found in the governing documents of your HOA, the obligation of your board of directors to enforce them, the obligation of homeowners (including members of the board) to comply with them, the importance of having use restrictions and rules which fit the priorities of your community, options which boards have for enforcement and related protections for homeowners.  We will also make sure to cover the hot topics of restrictions on marijuana and dogs.  This class will provide important information and is sure to be entertaining!

Date of Seminar:  Tuesday, September 15, 2015

Time:  11:30 am to 1:30 pm

Location:  Aspen City Council Chambers, located at 130 South Galena Street in Aspen

Presenter:  Molly Foley-Healy, Esq.

For more information and to RSVP for this seminar, please call APCHA at 970-920-5050.  We look forward to seeing you on Tuesday!

Winzenburg, Leff, Purvis & Payne is pleased to announce that our good friends and colleagues Kim Porter, Wendy Weigler and Myra Lansky have joined our firm. Kim, Wendy and Myra are accomplished attorneys specializing in the practice of community association law and are outstanding additions to our law practice.

Kim Porter focuses on the transactional side of the practice by representing homeowners’ associations and condominium communities. While this is the mainstay of her legal work, Kim also practices real estate and business law and has experience in bankruptcy, collection, employment and administrative law – all areas that routinely impact community associations. Kim excels at counseling her community association clients on the diverse issues and challenges that associations face on a routine basis. Kim can be reached by phone at 303-863-1870 or via email at kporter@wlpplaw.com.

 

Wendy Weigler has focused much of her community association practice on litigating, mediating and arbitrating numerous types of covenant enforcement, contract and collection issues for community associations. She has been successful in both state and federal appeals and has several published opinions. In addition to handling disputes for clients, Wendy looks forward to continuing the transactional side of her community association practice with WLPP, handling contract negotiations, document drafting and advising on general business matters. Wendy can be reached by phone at 303-863-1870 or via email at wweigler@wlpplaw.com.

  

Myra Lansky has limited her practice exclusively to community association law, representing homeowners’ associations and condominium communities. Myra is a fellow of the College of Community Association Lawyers, speaks frequently on community association issues and has regularly contributed to the Rocky Mountain Chapter of CAI’s monthly newsletter – Common Interests. While Myra is scaling back on her law practice, she will remain available to her clients. Myra can be reached via email at mlansky@wlpplaw.com

 

Please join us in welcoming Kim Porter, Wendy Weigler and Myra Lansky to Winzenburg, Leff, Purvis & Payne! 

For several years now, the Aspen Pitkin County Housing Authority ("APCHA") has been a leader in providing educational opportunities for affordable housing and free market HOAs in Aspen and Pitkin County.  It’s my pleasure to teach another seminar for APCHA on June 11th entitled:  CCIOA 101 for HOA Boards, Homeowners and Managers:  Everything You Need to Know About HOA Meetings

If you live in, serve on the board of or manage an HOA, you know that conducting efficient and effective board and membership meetings can sometimes be a challenge.  Did you know that the Colorado Common Interest Ownership Act (“CCIOA”) has provisions which regulate HOA meetings?  This seminar will cover:  (1)  providing notice of board and membership meetings; (2) open meeting requirements; (3) when a board of directors can meet in a closed executive session; (4) the right of homeowners to speak at meetings; (5) when secret ballots are required to be used at membership meetings; (6) how secret ballots must be counted; and (7) effectively using your required Conduct of Meetings Policy.  Also, if time permits, we’ll be happy to answer any other HOA questions you may have!

Date of Seminar:  Thursday, June 11, 2015

 

Time:  Noon to 1:30 pm

 

Location:  Aspen City Council Chambers, located at 130 South Galena Street 

 

For more information and to RSVP for this seminar, please call APCHA at 970-920-5050.  We look forward to seeing you next Thursday! 

 

You’ve probably heard the news by now–an HOA refused to allow Make-A-Wish to grant a young cancer patient’s wish by constructing a playhouse in the girl’s back yard. The reason? Outbuildings are against the covenants. Of course, the HOA ends up taking the heat with press coverage and outspoken support for the sympathetic young girl.

The story has quickly blown up, with multiple sources reporting the details. One source reports that the HOA board member names and telephone numbers have been removed from the association’s website. Other stories give updates on the HOA’s reconsideration of the matter and willingness to compromise after talking with Make-A-Wish and the construction contractor.

For now, it sounds like one young girl will get her wish. It remains to be seen whether other kids in the neighbor will be permitted to have their own playhouses constructed or what kind of pressure the volunteer board members will face from neighbors who do not appreciate the compromise in this case. Unfortunately, boards can come under fire even when following the rules and fairness to others guide their decision-making.

We’ve previously written about what to do if your HOA ends up in the news (because we all know that making the headlines is rarely, if ever, a good thing). But, on this Friday afternoon, I’m curious about how you and your association may have handled the playhouse wish differently to avoid the headlines from the start. Ideas?

The Division of Real Estate has just announced that the Community Association Manager licensure exam will be available to take on February 1st!  Here’s the latest news from the Division of Real Estate:

Community Association Manager Examination Available February 1, 2015

The Division of Real Estate has contracted with Psychological Services, Inc. (PSI), as the testing vendor who will administer the community association manager licensing examination.  The state exam is comprised of two parts; a general portion and a state specific portion designed to determine the competency of the applicant with regard to legal documents, Colorado Statutes, and other core competencies.  Applicants will be able to sit for the exam beginning February 1, 2015.  Pursuant to emergency rule A-4, applicants must hold a qualified education credential prior to sitting for the exam.  This includes one or more of the credentials set forth in § 12-61-1003(5)(a)(I)(A),(B),(C), and (D), C.R.S., or § 12-61-1003(5)(d), C.R.S., or complete the Division created alternative qualifying education.  Please click here for a list of approved Colorado occupational schools offering the 24-hour qualifying education course. The cost of the examination will be $90.00, which includes the state and general portions. Applicants must pass both portions of the exam and an applicant may retake any failed portion(s).  The cost to retake one or both portions of the examination will be $85.00.  Additionally, a passing score for either part of the exam is valid for one year.  To register for the examination, please visit PSI Exams Online.  Prior to sitting for the exam, the Division encourages all applicants to read the Candidate Information Bulletin.  The bulletin provides information about the examination and provides an examination content outline and the number of testing items in each topic area.

On Friday, October 23rd, we will be making the move to our new offices located at 8020 Shaffer Parkway, Suite 300 in Littleton, Colorado!  In order to facilitate our move, we will not have phone or email service on Friday.  While we regret any inconvenience this may cause, we will be back up and running normally on Monday.

As a reminder, our telephone (303-863-1870) and fax (303-863-1872) numbers will remain the same.