Colorado HOA Forums Top 6 Legislative Issues

In a white paper issued by the Colorado HOA Forum, this group sets forth six issues for which it is seeking legislative sponsors. The six issues verbatim are:

1. Prohibit/limit transfer fees on HOA and other community property home sales.
2. Require HOA special assessments over a specific dollar amount in HOAs with an annual income over a specific amount to be approved by 50 percent of
homeowners.
3. Require all HOA real estate transactions to include certification by the home buyer and real estate agent/broker that the following have been completed:
a. Read and understand the HOA’s governing documents that explain the controls, covenants, and restrictions.
b. Obtained from the HOA a statement of any active and planned special assessments and the monetary amount associated with
each.
c. The realtor/broker informs the buyer of the number of homes under foreclosure in the HOA.
d. Obtain an agreement letter from the HOA concerning any repairs or maintenance work to be completed by the HOA within
six months after the home sale that have been identified as the responsibility of the HOA and not the home buyer. Such
issues have been identified in the home inspection report as needing to be addressed.
e. Understanding of the home rental policy in the HOA and how many rentals exists in the HOA.
f. HOA financial statement and specific analysis as the adequacy of HOA reserve funds.
g. The amount of monthly HOA dues.
h. The total number of units in the HOA and the number in arrears on HOA dues.
4. Limit fees, administrative charges, interest charges, and other collection costs on HOA debt that is less than six months in arrears to $25 per month plus overhead
charges to cover mailing costs. This also pertains to HOA debt that is being repaid under the payment plan mandated by HB1276. This is a modification to HB1276.
5. Modify the HOA registration process to include a requirement that all person serving on HOA Boards certify they have read their own governing documents and (to
be determined) information on the State’s HOA Office and Information Resource Center’s website concerning State HOA law, how to conduct meetings and elections, open access records requirements and dispute resolution. This is a modification of HB1134.
6. Implement out of court dispute resolution process for most HOA homeowner complaints modeled after the Virginia system. HOA homeowner complaints in this
process would be for damages under $7500, not felony in nature, and/or related to non-compliance with State HOA laws or a homeowner’s own governing
documents.

While these issues may seem far reaching, many of them having been floating around the legislative arena, and having an organized advocacy group may be what is needed to see even more legislation coming our way.

As expected, some of these have merit and some do not. In the end, item #6 would solve the vast majority of valid disputes, but I understand that attorneys would be reluctant to support this. As a manager, I do not consider it appropriate to interfere any further legislatively with the ability and process of the HOA to collect delinquent assessments and costs. When a homeowner is not paying, every avenue legally available to the creditor/HOA should be vigorously pursued. Failure to do this would only encourage homeowners to become lax in payment of monies which the HOA needs in order to operate properly. I support HB1276 fully and believe the only modification to it should be that each board and manager should be required to comply with the adopted collection procedures of the specific HOA as promulgated, without prejudice, discrimination or preference. Currently, the law says that each HOA must have such policies in force, but there is nothing that binds the association to compliance with its own adopted procedures. I have seen many boards and managers “wing it” as they go along, despite having the required policies in place. I do believe that some management companies charge an excessive amount for CIC certs, status letters and transfer fees, but should be able to recoup the actual costs of preparing such documents, which are legally binding on the association, and need to be prepared with care. This is something that should be paid by either the buyer or the seller, as appropriate, and not be a common expense of the entire association. I believe the Forum erroneously refers to the preparation of such documents as “transfer fees.” We must be very careful not to micro-manage HOAs by over-regulating. In many cases, I believe the legislature has already overstepped its bounds by interfering legislatively with private contracts between 2 parties. Those of us who pay attention knew this would happen once the door was opened, but the legislature cannot and should not be expected to solve every personal issue that arises in the conduct of business by an HOA.

3 responses to “Colorado HOA Forums Top 6 Legislative Issues”

doug snyder says:

October 28, 2013 at 10:20 pm

The total number of units in the HOA and the number in arrears on HOA dues. How is this number calculated? My community is not built out. Is it the number of units specified on the approved plats?
Bob - an HOA President says:

October 29, 2013 at 1:44 am

“2. Require HOA special assessments over a specific dollar amount in HOAs with an annual income over a specific amount to be approved by 50 percent of homeowners.”

This is patently ridiculous. Do they mean that if the property is IN NEED OF RENOVATION and will unacceptably deteriorate absent renovation, that we need to vote on whether or not to let the property deteriorate? How dumb!

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4. Limit fees, administrative charges, interest charges, and other collection costs on HOA debt that is less than six months in arrears to $25 per month plus overhead.

So the state wants HOA’s to handle delinquent owners LESS severely than credit card companies, mortgage companies, auto loan companies treat their delinquent customers — is that what they want?

Also dumb, very very dumb.
Our declarations specify that if we are simply renovating (perhaps installing a new roof) that the board decides on the special assessment, but the board cannot perform improvements (new structures for example) that require a special assessment, that the owners do get a vote on that.t
Joe Felice says:

October 29, 2013 at 2:58 am

As expected, some of these have merit and some do not. In the end, item #6 would solve the vast majority of valid disputes, but I understand that attorneys would be reluctant to support this. As a manager, I do not consider it appropriate to interfere any further legislatively with the ability and process of the HOA to collect delinquent assessments and costs. When a homeowner is not paying, every avenue legally available to the creditor/HOA should be vigorously pursued. Failure to do this would only encourage homeowners to become lax in payment of monies which the HOA needs in order to operate properly. I support HB1276 fully and believe the only modification to it should be that each board and manager should be required to comply with the adopted collection procedures of the specific HOA as promulgated, without prejudice, discrimination or preference. Currently, the law says that each HOA must have such policies in force, but there is nothing that binds the association to compliance with its own adopted procedures. I have seen many boards and managers “wing it” as they go along, despite having the required policies in place. I do believe that some management companies charge an excessive amount for CIC certs, status letters and transfer fees, but should be able to recoup the actual costs of preparing such documents, which are legally binding on the association, and need to be prepared with care. This is something that should be paid by either the buyer or the seller, as appropriate, and not be a common expense of the entire association. I believe the Forum erroneously refers to the preparation of such documents as “transfer fees.” We must be very careful not to micro-manage HOAs by over-regulating. In many cases, I believe the legislature has already overstepped its bounds by interfering legislatively with private contracts between 2 parties. Those of us who pay attention knew this would happen once the door was opened, but the legislature cannot and should not be expected to solve every personal issue that arises in the conduct of business by an HOA.

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Colorado HOA Forums Top 6 Legislative Issues

3 responses to “Colorado HOA Forums Top 6 Legislative Issues”

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