We frequently hear people say that common areas are owned by their association. And, while that is true in many cases, it is not true when referring to condominiums. In fact, the single fact distinguishing condominiums from any other type of common interest community is how the property making up the project, other than the individual units, is owned.
Continue Reading Whose Land is it Anyway? And Why do we Care?
This Lawyer is Not a Plumber: Are you hiring the right professionals to serve your association?
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.Continue Reading This Lawyer is Not a Plumber: Are you hiring the right professionals to serve your association?
Where do governance policies come from?
I recently prepared a package of the nine mandatory policies for a community association. The board of that association read the policies very carefully and sent back a number of questions, asking why I had drafted various provisions the way I had, or why I had included them at all.
When drafting the mandatory policies, there is no single source. The “nine mandatory policies” or “SB-100” policies originate from Senate Bill 05-100 signed into law in 2005. Originally there were seven mandatory policies, with the dispute resolution requirement added in 2006 and the reserve study requirement added in 2009. Since SB-100 became law there have also been many other additions and amendments to the Colorado Common Interest Act (CCIOA) and Colorado Revised Nonprofit Act that affect these policies.Continue Reading Where do governance policies come from?
Where’s my Money?
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
Failing to Reserve and Deferred Maintenance is a Recipe for Disaster
If you have ever served on the board of directors of an HOA, you know that some members are never happy to see their annual assessments increased. In fact, some folks can be downright hostile when faced with an increase. This can even be true when an assessment increase is absolutely necessary to adequately fund reserves to be financially prepared to handle major repairs and replacements to association common elements.
When boards are unwilling to propose essential assessment increases or members are unwilling to ratify budgets with these increases, it is not uncommon to see a couple of things happen. First, these associations tend to defer routine maintenance on common elements which reduces the remaining useful life of components like roofs, siding and asphalt. Second, these associations may not have enough funds in reserves to cover the costs associated with these major repairs and replacements. In such cases, without levying a special assessment or obtaining a loan to cover the associated costs, the infrastructure of these communities will begin to erode and eventually fall apart.Continue Reading Failing to Reserve and Deferred Maintenance is a Recipe for Disaster
Flying the American Flag in Observance of Memorial Day
As we contemplate the observance of Memorial Day, we need only briefly look at the news to be reminded of how lucky we are to live in the United States of America. As we witness the repression in other countries that is unimaginable to most of us, we must remember the men and women serving in the United
Spring and Summer Tips for HOA Living
Okay – so the nicest thing I can say about the snow we had on Mother’s Day is that it was really annoying. However, regardless of our quirky Colorado weather, spring really is here! That means HOA boards and residents need to anticipate and avoid common pitfalls and controversies that can arise as we spend time outdoors during the spring and summer. Here are some important tips to keep in mind:
Annual Education? Do You Comply?
We sometimes receive questions about the owner education requirements required by the Colorado Common Interest Ownership Act (CCIOA), and what it takes to comply. CCIOA says that the association must provide, or cause to be provided, education to owners at no cost on at least an annual basis as to the general operations of the association and the rights and responsibilities of owners, the association, and its executive board under Colorado law. The criteria for compliance with this section shall be determined by the executive board.Continue Reading Annual Education? Do You Comply?
Full Disclosure: How much is too much?
Community associations often deal with situations that they must disclose to buyers or lenders as part of the documentation provided in a real estate transaction. Typical disclosures that associations must give include (1) whether the association is involved in litigation and (2) whether a special assessment has been levied. Litigation and special assessments seem easy enough to disclose. But the obligation to disclose, or the liability for not disclosing, is less clear with respect to threatened litigation or a special assessment under consideration but not yet approved. Associations should consult with legal counsel when a situation does not fall squarely within the mandatory disclosure categories. Failure to disclose may result in liability for the association, but giving too much information can also cause problems for an association.
As examples, associations tread into murky disclosure areas with respect to the following areas:
Ongoing disputes between the association and a particular owner or group of owners that does not involve litigation. In general, associations should neither hide nor embellish the facts regarding an unhappy owner’s impact on the community. A protracted dispute, much like a potential lawsuit or special assessment, is not a mandatory disclosure for associations or sellers.Continue Reading Full Disclosure: How much is too much?
The Advantages of Transparency
WLPP attorney Doug Stallworthy recently wrote a post on transparency in association boards. His thoughts follow.
Transparency in decisions made by the board of a homeowners association fosters a sense of confidence in those decisions. By following correct procedures for meetings on all issues, whether simple or complex, both the board and members will gain a familiarity with the process, and members may understand how complex the issues faced by a board really are.
When residents contact a board member about an issue in the community, the board member should always refer them to the HOA manager, ask the resident follow complaint procedures, or raise the issue at the appropriate time in an open meeting. Board members should not give opinions or make decisions outside of a meeting. Open meetings allow the board as an entity to discuss an issue, and receive comments from interested members.Continue Reading The Advantages of Transparency