HB22-1137 is all the rage lately, isn’t it? New procedures, notices, lengths of payment plans, limitations on fines, keeping better track of communications regarding all of the above – whoo! Exhausted just thinking about it!
But… the first step in complying with the most recent HOA law in Colorado is to get the updated policies in place. Yeah, I get it. More time and money spent trying to bring your association into compliance with a new law…maybe it’s money the board doesn’t believe it has or money the board just doesn’t want to spend to get the policies updated. Maybe the board doesn’t even think new policies are required!
Here’s the scoop – you must get the policies in place. In fact, the board can’t move forward with legal action to collect unpaid assessments under HB22-1137 until it has a legally compliant collection policy in place. HB22-1137 also states the association cannot use a collection agency unless the policy is in place as well.
In order for an association to operate, it must be funded by assessments. When assessments go unpaid, the very lifeblood of the association is at risk. If the unpaid assessments aren’t being collected because the association doesn’t have a legally compliant policy, then the board may be accused of failing to exercise its fiduciary duty and to act in the association’s best interest. As an aside, moving forward with association action (such as collection of unpaid assessments) without compliant policies in place also puts the association at risk and increases its exposure for future litigation for failing to properly and legally operate.
So, what do you do? Try this:
- Reach out to your legal counsel to draft the updated policies for you. I do not recommend drafting them on your own since it is usually more cost effective for the association to hire counsel to draft the policies rather than paying the attorney to review, edit, and update a policy the association drafted on its own;
- Don’t try to use a “one size fits all associations” type policy – copying and pasting the same policy for use with a different association isn’t recommended since each association’s governing documents contain different language and requirements that will require the updated policies to be tailored specifically to that association;
- Once the policies are in place, FOLLOW THEM! It is better to have a slight delay at the beginning while the board ensures it is following the policies correctly, then to turn the matter over for collection and risk exposure later on because a policy wasn’t properly followed.
- Be patient…. Take deep breaths…and call the association’s counsel if you have questions or need assistance with the new law or any other questions.
For more information concerning updating your policies, or if you have specific questions, contact an Altitude attorney, at 303.432.9999 or at [email protected].