Money Matters

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By now, we all know that prior to an association turning a delinquent account over for collections, certain procedures under CCIOA must be followed. One of those procedures is sending of a notice of delinquency to a delinquent owner that includes the following information: (1) the amount due with an accounting of how the total was determined, (2) a statement as to whether the opportunity to enter into a payment plan exists and instructions for contacting the community association manager and/or board member to enter into such a payment plan, (3) the name and contact information for the individual the unit owner may contact to request a copy of the unit owner’s ledger in order to verify the amount of the delinquency and (4) a statement that action is required to cure the delinquency and that failure to do so within thirty days may result in the unit owner’s delinquent account being turned over to a collection agency, a lawsuit being filed against the owner, the filing and foreclosure of a lien against the unit owner’s property or other remedies available under Colorado law.

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I was recently told a story about a condominium association that is carrying property insurance coverage on their condominium units which includes a $50,000 per unit deductible on water related losses!  Evidently, this association has also adopted a policy which passes along the responsibility for the deductible to the owners of the units which were damaged.  In addition, if a unit owner is found responsible for causing a water related loss, I was told the at-fault owner is responsible for paying the $50,000 deductible for all of the units damaged by the water event.

Let’s say you live in this association and negligently caused a water related loss which damaged your unit and three others.  That would mean you could be held responsible to pay $200,000 in insurance deductibles.  Needless to say, most people are not prepared to write a check for $200,000! 

Once I thought through this scenario and picked my jaw up off my desk, my initial thought was this association has basically decided not to cover water related losses.  However, much more importantly, I thought about how absolutely essential it is for homeowners in this community to carry sufficient insurance coverage on their standard unit owners policy (commonly referred to as the "HO-6 policy") to cover payment of these deductibles. 

While the story I recounted is certainly unusual, every owner of a condominium unit should find out what deductibles their association is carrying on their property and liability insurance coverage and to what extent the owners are responsible for paying those deductibles. Once you have that information, you should contact your insurance agent and ask the following questions about your HO-6 policy:

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On January 1, 2014, new legislation went into effect requiring associations to provide a specific written notice to delinquent homeowners. This notice is required prior to turning over a matter for collections to an attorney or collection agency.

The details of the notice are as follows:

a. It must contain the amount due with an accounting of how the total was determined (a running balance ledger going back to a -0- balance is sufficient);

b.  A statement as to whether the opportunity to enter into a payment plan exists and instructions for contacting the community association manager and/or board member to enter into such a payment plan;

c.  The name and contact information for the individual the unit owner may contact to request a copy of the unit owner’s ledger in order to verify the amount of the delinquency; and

d.  A statement that action is required to cure the delinquency and that failure to do so within thirty days may result in the unit owner’s delinquent account being turned over to a collection agency, a lawsuit being filed against the owner, the filing and foreclosure of a lien against the unit owner’s property or other remedies available under Colorado law.

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It’s that time of year again when Boards are planning for the New Year. If your Association has increased (or even decreased) its annual assessment fees for 2015, it is important that the Association follow its governing documents when providing notice of the change to all owners. 

In addition to providing owners with proper notice…

 In an improving economy, the important of monitoring a public trustee foreclosure sales has additional benefits above and beyond making a claim for payment of the association’s super priority lien. As most of you are aware, following the filing of a public trustee foreclosure, CCIOA provides for recovery of up to six months of delinquent assessment fees. For years, the importance of monitoring a public trustee oftentimes had little significance above and beyond making a claim for the super lien and determining the new owner following the sale of the property.

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For a court to have authority to make legal decisions and enter a judgment against someone, the court must have both personal and subject matter jurisdiction over that person.  Subject matter jurisdiction involves the court’s ability or power to hear certain types of cases, whereas personal jurisdiction is the court’s power over a particular party.  The court obtains personal jurisdiction over a defendant when the plaintiff obtains proper service of process of the summons and other related documents, including the complaint.  Service of process is the way by which a party receives notice of the initiation of the litigation and is thereby afforded an opportunity to respond.

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I’m the granddaughter of Midwestern dairy farmers who grew up during the Great Depression, and my parents own a small town HVAC/plumbing business. As a child, I often heard some version of the following: “I can make that.” “We don’t need to hire someone. I can fix it.” “Why would we pay someone for that work? I can do it myself.” With this do-it-yourself attitude ingrained in my psyche, I can’t help but feel guilty when I need to call a plumber to unclog a drain or when I hire someone to clean my house. The frugality—and wherewithal—that my parents and grandparents modeled for me certainly left an impression. Yet I’ve also come to realize that my life sometimes requires different choices.

Yes, I can play plumber and unclog a sink drain. I’ve done it: I’ve gathered the equipment, removed U-traps, brushed pipes clean, disposed of clogged pipe nastiness, and put everything back together. Sometimes I’ve succeeded. But on other occasions I’ve removed the drain stopper and struggled to get it reconnected, or, as one of my college roommates will recount, my work has resulted in leaks where I could not get the old mismatched pipes to fit securely. Yes, I’ve played plumber and channeled my inner DIY-er, but I’m not a plumber. I would not offer to fix someone else’s drain, and I most definitely would not venture into my HOA’s clubhouse armed with a plunger and pipe putty.

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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…