On April 18th, Governor Hickenlooper signed HB 1254 into law. The bill addresses the disclosure of fees charged to HOAs in Colorado by management companies. HB 1254 will go into effect on January 1, 2015. Here’s what you need to know about the bill:
(1) it requires managers and management companies to disclose their fees and charges to associations during contract negotiations and on a yearly basis thereafter;
(2) these fees and charges must be disclosed as part of the written management contract in order to be enforceable;
(3) to be enforceable, the transfer fees which management companies charge relative to the conveyance of a home in an HOA must be disclosed in the management contract or specified on a line item in the real estate closing settlement statement; and
(4) management companies must also disclose any other remuneration the company or any subsidiary, affiliate, or related person or entity receives that is in any way connected to its relationship with the HOA.
Managers and management companies who fail to make these disclosures would be subject to investigation and discipline by the Division of Real Estate.
CAI’s Colorado Legislative Action Committee is please that this transparency bill was signed into law by Governor Hickenlooper.
Molly Foley-Healy is Chair of CAI’s Colorado Legislative Action Committee.