House Bill 1175 (HB 1175) cleared the House Business Affairs and Labor Committee yesterday without amendment on an 8-5 vote.  The bill will now be taken up by the House Finance Committee where it is expected to be approved, since the Fiscal Note shows that no appropriation is required.

HB 1175 would (1) extend the community association manager licensure program for an additional five years; (2) amend the definitions of “community association management” and “community association manager;” (2) amend the supervision requirements for the apprentice license; (4) repeal references to private professional credentials; and (5) enhance the due process protections of a cease and desist order.

Following industry stakeholders reaching consensus, it is expected that amendments will be offered on the floor of the House to dispose of the requirement that management companies have a “designated manager” who is responsible for all of the management related activities in the company.  Based upon testimony by industry representatives in a hearing before the House Business Affairs and Labor Committee to determine whether HB 1175 would be introduced, this move seems to be in response to a designated manager being disciplined in 2017 for financial actions taken by an unlicensed president and an unlicensed CEO of a management company.  Since the designated manager was a subordinate of the president and CEO of the management company, she had no hope of regulating or controlling their actions.  As a result, it seems fundamentally unfair that she was disciplined for their unlicensed activity.

I look forward to seeing whether CAI’s Colorado Legislative Action Committee will take any action on addressing better screening of complaints brought against managers prior to the Division of Real Estate launching a full blown investigation into the complaint.  I have personally seen a handful of complaints brought against community association managers that had nothing at all to do with their management and instead related to decisions made by the board of directors of the HOAs they manage.  It’s simply wrong to subject managers to a full blown investigation on issues that are not management related and should be disposed of through an initial review of the complaint.

As expected, last Friday House Bill 18-1175 (HB 1175) was introduced in the Colorado House of Representatives.  The co-prime sponsors in the House are Representative Tracy Kraft-Tharp (D-Jefferson County), Chair of the House Business Affairs and Labor Committee where the bill has been assigned, and Representative Dan Thurlow (R-Mesa County).

As I mentioned in my January 30th blog posting, the House Business Affairs and Labor Committee approved introduction of the HB 1175 which would extend the community association manager licensure program for an additional five years.  With the exception of a recommendation from DORA that the Director of the Division of Real Estate be authorized to establish renewal fees for management companies, the Committee directed that all of the other recommendations from the DORA Sunset Review be included in the bill.  Those recommendations include:

1.  Continue the CAM licensure program for five years, until 2023;

2.  Amend the definitions of “community association management” and “Community Association Manager,” and authorize the Director of the Division of Real Estate to promulgate rules clarifying the supervision requirements for support staff who are providing clerical, ministerial, accounting or maintenance functions to a licensee and specify any activities that would trigger support staff to be licensed;

3.  Amend the supervision requirements for the Apprentice License and require the Director of the Division of Real Estate to define by rule the appropriate level of supervision related to specific activities of an Apprentice and detail any supervision requirements that are necessary to protect the public;

4.  Repeal any references to private, professional credentials and authorize the Director of the Division of Real Estate to approve, by rule, any credentials, examinations or education deemed equivalent or superior to the education and examination otherwise required by the Director; and

5.  Enhance the due process protections of a cease and desist order.

HB 1175 has not yet been scheduled for a hearing before the House Business Affairs and Labor Committee.  However, since that very Committee approved introduction of the legislation, it is expected the hearing will simply be a formality.

All expectations are that HB 1175 will enjoy bipartisan support in both the House and Senate and the community association manager licensure program will be renewed for another 5 years.

The House Business Affairs and Labor Committee heard testimony this afternoon on whether to approve the introduction of a bill to continue the Community Association Manager Licensure Program for another five years and to include other recommendations of the Colorado Department of Regulatory Agencies (DORA), which I outlined in my blog posting on January 29th.

Based upon the testimony presented and questions answered by the Director of the Division of Real Estate, the Committee overwhelmingly approved the introduction of a bill reflecting all but one of the recommendations of DORA.  The recommendation that was deleted from the bill is the recommendation that the Director of the Division of Real Estate be authorized to establish renewal fees for management companies.

The bill will be formally introduced tomorrow and I will post that bill on this blog as soon as it becomes available.

Tomorrow is the beginning of the legislative process to determine whether the licensure of community association managers will continue for another five years or whether the licensure program will be sunset.  On Tuesday, January 30th, the House Business Affairs and Labor Committee will consider the 2017 Sunset Review:  Community Association Management Practice Act (Sunset Report) prepared by the Colorado Department of Regulatory Agencies (DORA) to determine whether a bill should be introduced during the 2018 legislative session to continue the licensure program for five years and whether the bill should include the recommendations outlined in the Sunset Report which are:

1.  Continue the CAM licensure program for five years, until 2023;

2.  Authorize the Director of the Division of Real Estate to establish renewal fees for management companies;

3.  Amend the definitions of “community association management” and “Community Association Manager,” and authorize the Director of the Division of Real Estate to promulgate rules clarifying the supervision requirements for support staff who are providing clerical, ministerial, accounting or maintenance functions to a licensee and specify any activities that would trigger support staff to be licensed;

4.  Amend the supervision requirements for the Apprentice License and require the Director of the Division of Real Estate to define by rule the appropriate level of supervision related to specific activities of an Apprentice and detail any supervision requirements that are necessary to protect the public;

5.  Repeal any references to private, professional credentials and authorize the Director of the Division of Real Estate to approve, by rule, any credentials, examinations or education deemed equivalent or superior to the education and examination otherwise required by the Director; and

6.  Enhance the due process protections of a cease and desist order.

In addition to these recommendations relating to continuing the CAM licensure program for another five years, the Sunset Report also recommends that the Director of the Division of Real Estate should create an advisory committee to assist with drafting rules regarding the use of unlicensed support staff and Licensed Apprentices.

It is expected that the House Business Affairs and Labor Committee will approve the introduction of a bill, which should be introduced within a week or two, consisting of the recommendations outlined above.  Once the bill is introduced and assigned to a committee for hearing, there will be a full vetting in testimony of the recommendations outlined in the Sunrise Report and additionally addressing the need to streamline the complaint and investigation process.  However, all indications are that the House and Senate will approve continuing with the CAM licensure program for an additional five years.

Stay tuned to this blog for more information on the sunset review as it proceeds through the legislative process.

Following the construction defects drama from the 2017 Colorado Legislative Session, the 2018 Legislative Session for HOAs was expected to be relatively quiet and early on the session is proceeding according to script.  While there have been some landlord/tenant bills, financing for affordable housing and other procedural bills introduced that only lawyers would be interested in, from a substantive perspective for HOAs here are two bills of interest:
House Bill 1126:  Following the complaint of a constituent who was unable to find an HOA that would let her keep her 2 german shepherd dogs, Representative Paul Rosenthal introduced HB 1126 which would stop HOAs from enforcing provisions in their declarations that prohibit dogs based solely upon their breed, weight or size.  However, the bill would permit HOAs to enforce provisions in their declaration or rules which regulate things like the number of dogs permitted per household, prohibiting nuisance barking, picking up poop, keeping dogs on leashes while in the association and the like.
HB 1126 has been assigned to the House Local Government Committee and is currently scheduled for a hearing on February 14th at 1:30 pm.  Given the fact that HB 1126 is inconsistent with many municipal ordinances prohibiting breeds of dogs which have been classified as vicious, I suspect HB 1126 faces an uphill battle for passage in its current form.  There will also likely be testimony from folks living in stacked condominiums with hard surface flooring, who will be concerned about the noise generated by larger dogs on wood and tile floors. Stay tuned for an update on HB 1126 following the hearing on Valentine’s Day.
 
Senate Bill 62:  Senator Dominick Moreno has introduced SB 62 which would make void provisions in contracts between HOAs and snow removal companies requiring the HOA or snow removal company to indemnify, hold harmless or provide a legal defense to the other party for legal actions and damages resulting from snow removal in the community.  In other words, HOAs and snow removal companies cannot hold each other responsible in a contract for slip and falls relating to snow removal.
SB 62 has been assigned to the Senate Judiciary Committee and is also scheduled for a hearing on February 14th at 1:30 pm.  Since Senator Moreno is a Democrat and the Republican controlled Senate is typically not interested in interfering with the contract rights of parties, it will be interesting to see what happens to SB 62 in Committee.
Be sure to stay tuned to this blog for information on substantive HOA bills as they are introduced and proceed through the legislative process.

Is your association increasing, or even decreasing, its annual assessment fees for 2018? If so, 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 of any change, the association should also notify its attorney. This will help to ensure that any accounts and/or payment plans that are with the attorney for collection are properly noted, and any increase is accurately accounted for and collected.

In addition to payment plans that may be affected by the increase of assessment fees, there are also notification requirements and deadlines the association must comply with for certain owners who have filed for bankruptcy.  Advising the association’s attorney of any change will allow the attorney to take the proper measures to ensure that the association retains the right to collect the new assessment fee.

If you haven’t already notified your attorney that your assessment fees have changed, or will change, for the New Year, pick up the phone or send an email to your attorney – I’m sure he or she would love to hear from you!

Winzenburg, Leff, Purvis and Payne, LLP is pleased to announce our Warehouse Lecture Series for the 2017/2018 year. The Series is comprised of quarterly, half-day sessions providing Community Association Manager Continuing Education credits approved by DORA.

The first session, titled “Meetings,” will take place Friday, October 27, 2017, from 8:30 am to 12:30 pm. Session topics include the following:

  • Everything You Need to Know about Membership Meetings
  • Board of Directors Meetings
  • Action Plan for Meetings*
  • Mock Board Meeting.

Please e-mail Allison Grout at agrout@wlpplaw.com for information about pricing and how to register for all or some of the class sessions. Price increases apply for registrations received after October 23, 2017.

*Submitted for Continuing Education approval.

Mark your calendars!  Winzenburg, Leff, Purvis & Payne, LLP is pleased to announce the Warehouse Lecture Series.  On May 4, 2017, May 11, 2017, and June 16, 2017, WLPP will hold classes designed to help managers obtain credits they may need to complete their DORA Continuing Education requirements, as well as to help Board members better understand community association governance and operations.  The May 4 and June 16 classes will be held at our offices in Ken-Caryl.  Our class on May 11 will be held in Aspen.

Continue Reading WLPP CAM Continuing Education Classes

All the media and legislative talk of construction defect litigation and its impact on condominium construction in Colorado may seem like discussion that does not impact existing communities. But the changes to state and local laws concerning construction defect litigation do affect existing communities by creating owner notice and vote requirements that, in some cases, apply to construction undertaken by associations long after initial development of their communities. The impact of these requirements on communities will likely play out over time as defects occur and associations seek remedies.

While associations cannot unilaterally change the controlling laws, associations can take proactive steps when contracting for new projects. In particular, associations need to know how the potential for construction defects may affect insurance coverage on projects that associations contract to complete on their own. Did you know that many contractors’ insurance policies exclude multi-family housing projects from coverage?

Continue Reading Construction Defects and Insurance: Proactive Steps To Protect Your Community

On January 20th, Representative Kevin Van Winkle (R) introduced House Bill 17-1112 (HB 1112) which would provide immunity from penalties for individuals who engage in the unauthorized practice of a profession regulated by the Department of Regulatory Agencies (DORA), like a realtor engaging in the unauthorized practice of community association management, under the following circumstances:

Continue Reading Bill Introduced Granting Limited Immunity for Unauthorized Practice of Community Association Management