We have received a number of questions about whether SB 100 limits an Association’s ability (acting through its board of directors) to make changes to its common elements – as an example, can the board change hardscape landscape improvements to irrigated sod? While SB 100 does a number of things, including imposing a number of additional requirements on the association’s board of directors, the simple answer is that it does not restrict the board’s authority to make this type of decision.
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What the Courts Say
HOMEOWNER ASSOCIATIONS WIN STANDING AND RIGHT TO SUE SUBCONTRACTORS
In a recent decision, the Colorado Supreme Court has affirmed the authority of Associations to seek damages from subcontractors for defective construction. The HOA filed a lawsuit against the developer, the contractor and various subcontractors for defective construction of the project. The HOA settled with the developer and general contractor before trial. The trial court dismissed the negligence claim against the subcontractors before trial.
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Litigation/Construction/Review of Governing Documents
In consideration of filing a construction defect or similar lawsuit, the importance of reviewing governing documents as well as the underlying construction documents and reports is of the utmost nature in this day and age when legislatures and Developers work to limit access to courts.
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The Fiduciary Duty of Board Members: No “Playing Favorites” Allowed
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.
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