Money Matters

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We always advise Associations to look to their governing documents for operational guidance. However, it is extremely important that the Association’s governing documents are consistent with one another and most importantly, with the Declaration.  

The Declaration is the controlling document, so Associations should first make sure their Policies and Rules and Regulations are consistent with the Declaration. This can be important in the day to day activities of the Association as well as in litigation. A court will look first to the Association’s Declaration for authority, and if anything in the Policies or Rules and Regulations conflicts with the Declaration, the Declaration’s terms will control.  That is not to say that Policies or Rules and Regulations cannot add to or elaborate specifics about the Association’s Policies and Rules; they simply cannot contradict the terms of the Declaration. Below are some examples.Continue Reading Consistency is Key in Governing Documents

Colorado law provides that an association is entitled to a super-priority lien “super lien” for assessments which would have come due during the six months immediately preceding the filing of a foreclosure action by an association, or a party holding the first Deed of Trust.Continue Reading Protecting the Association’s Right to Collect the Super Lien

I previously posted a blog regarding the importance of the Notice of Bankruptcy. Here is a story of just how important this Notice can be and the consequences of not paying close attention to receiving this Notice. 

As you can see after reading this article, the Bankruptcy Court takes very seriously the protections afforded to a…

What can an association do to prevent or minimize future delinquencies by homeowners who are habitually late or delinquent in the payment of their assessments? This is a question that managers and board members ask me all the time. If I can figure out a magical solution to preventing delinquencies entirely, I’ll be glad to share but not until after I retire in a remote fishing village in Alaska! One way, though, that an association may be able to reduce future delinquencies is by accelerating assessment fees.Continue Reading Accelerate your Way through Collections

There is often confusion as to the difference between liens against property and the personal obligation of a homeowner. Typically, this issue arises when a homeowner files for bankruptcy. The Association needs to distinguish between the personal obligation the Association can collect from the homeowner, and the lien that attaches to the property and can be collected upon the sale of the property or by foreclosing against the homeowner.  Continue Reading Lien and Personal Obligation – What’s the Difference?

So you’ve been elected to the Board; you’ve reviewed all of the governing documents (at least, those that you’ve been provided); you faithfully review your board packets in preparation for your regular meetings, you’re well on your way to helping your association conduct its business in a businesslike manner. At your board meeting, a curious owner inquires why her monthly assessments are different than her neighbor’s.Continue Reading Misallocations of Assessments: What’s the Board To Do?

The Denver Post recently reported that Colorado will “receive $204.6 million as part of a $25 billion deal that states have reached with the nation’s biggest mortgage lenders over foreclosure abuses that occurred after the housing bubble burst.” 

In addition to the financial settlement, banks will be required to “stop the use of robo-signing, end the process of dual tracking of loans, provide a single point of contact for customers as they move through the loan-modification process and abide by deadlines for loan modifications.” 

 

The Post reports that “Colorado will get: Continue Reading Will Foreclosure Relief Funds Ultimately Benefit HOAs?

Last Friday, I attended a legislative briefing by the Director of the Division of Real Estate and the HOA Information Officer on the findings outlined in the 2011 Annual Report of the HOA Information and Resource Center (“Annual Report”). Having repeatedly reviewed and written about the Annual Report, I wasn’t surprised to hear the comments relating to things like transparency and the failure of some HOAs to produce records. What did catch my attention was the contention that some HOA law firms are inappropriately utilizing foreclosure as a remedy for past due assessments or to push folks out of their homes.

I have to say that I found it interesting that “HOA law firms” were classified as a potential decision maker on whether an HOA will foreclose on a delinquent owner.  The decision to proceed with a foreclosure should never be delegated to a law firm or an insurance company for that matter. Instead, the boards of HOAs should always make this decision on a case-by-case basis after carefully considering their options and the potential ramifications of proceeding with foreclosure. Continue Reading HOA Foreclosures: Case-by-Case is Key

As many of you have heard, there is a new collection option called G.A.P. ("Guaranteed Assessment Program") being marketed to associations throughout Colorado. It’s presented as insurance that pays the association a portion of assessment fees in exchange for a yearly premium based on a percentage of the association’s annual budget and associated risk. At first glance, this may seem like a cost effective and innovative way to collect delinquent assessment fees. However, when exercising your due diligence, here are some things that your board of directors should consider:Continue Reading G.A.P. Insurance: Exercise your Due Diligence before Signing Up

A manager recently told me about an association that lost some money. Specifically, one of the association’s long-term Certificates of Deposit was turned over to the State of Colorado. In this situation, the bank had apparently sent correspondence to the association’s former management company and then turned over the account to the State when no response was received within 30 days. The property manager was totally baffled and not sure how to get the money.

The Great Colorado Payback website shows that the State is holding funds for this particular association, and the manager will need to go through a claims process to get the money. Unfortunately, the association won’t get interest that accrued during the time the State has held the funds. I don’t have all the details – and haven’t heard yet if there’s a “happy ending” – but other associations may benefit from knowing that their accounts can get transferred to the State.Continue Reading Where, oh, where has my HOA’s CD gone?