Back in 2005, the Colorado General Assembly passed Senate Bill 100 which requires that every homeowners’ association (“HOA”) in Colorado must adopt 8 Responsible Governance Policies. Since that time, an additional policy has been added to the mix and the requirement for the “conflicts of interest” policy has been further refined.
As a reminder, here are the 9 Responsible Governance Policies each HOA must adopt and comply with:
- Collection of unpaid assessments.
- Handling of conflicts of interest involving board members. This policy must: (a) define or describe the circumstances under which a conflict of interest exists; (b) set forth the procedures to follow when a conflict of interest exists, including how, and to whom, the conflict of interest must be disclosed and whether a board member must recuse himself or herself from discussing or voting on the issue; and (c) provide for the periodic review of the association’s conflict of interest policy, procedures, and rules and regulations.
- Conduct of meetings, which may refer to applicable provisions of the nonprofit code or other recognized rules and principles.
- Enforcement of covenants and rules, including notice and hearing procedures and the schedule of fines.
- Inspection and copying of association records by unit owners.
- Investment of reserve funds.
- Procedures for the adoption and amendment of policies, procedures and rules.
- Procedures for addressing disputes arising between the association and unit owners.
- When the association has a reserve study prepared for the portions of the community maintained, repaired, replaced and improved by the association; whether there is a funding plan for any work recommended by the reserve study and, if so, the projected sources of funding for the work; and whether the reserve study is based on a physical analysis and financial analysis.
Aaron Acker, the HOA Information Officer for the Colorado Division of Real Estate, has noted that many complaints his office receives have to do with associations not complying with the requirements of SB 100. As a result, every director should ensure they have a copy of and are complying with their HOA’s Responsible Governance Policies.