As promised last week, two significant bills were introduced into the Colorado legislature this week that are aimed directly at community associations.  The first, HB 13-1277 is the manager licensure bill.  This bill contains two essential components; (1) requires each manager and management company to be licensed as a “Community Association Manager” which is generally defined in the bill as, “any person, firm, partnership, limited liability company, association, or corporation that, in consideration of compensation by fee, commission, salary, or anything else of value or with the intention of receiving or collecting such compensation, engages in or offers or attempts to engage in community association management in Colorado.   The term includes the Chief Executive Officer of a business entity that employs individuals…”  (2) Managers in accordance with the bill, prior to obtaining license from the State, must also obtain an independent designation as a CMCA, AMS or PCAM.  Given this definition and the definition of community association management contained in the bill, this bill truly spreads a wide net.  As this bill is debated and further refined, we will keep you updated on the additional requirements that are contained therein.

The second bill introduced, HB 13-1276 takes aim at the way association’s collect assessments.  The bill prohibits and association from referring a collection matter to an attorney or collection agency prior to the Association’s adoption of a collection policy.  While the adoption of a policy was already required by SB 100 a prohibition to turning the matter over for collection is new.  Additionally, the bill provides that the association’s policy including the following:

  1. The policy clearly state when the assessment is due and considered delinquent;
  2. The amount of late fees and interest;
  3. Any returned check charges;
  4. The circumstances under which a unit owner is entitled to enter into a payment plan with the association (which will be required by this bill).

Furthermore, the Association’s collection letter MUST contain the following:

  1. Prior to turning the owner over to an attorney, that the association must provide notice to the owner and stating the owner is entitled to enter into a payment plan with the association;
  2. The noticed must also contain the name and contact information of the person the owner may contact to obtain information on the assessments;
  3. The method by which the association’s payments may be applied on the delinquent account of a unit owner;
  4. The legal remedies available to the association.

Many of the above requirements are already contained in an association’s collection policy, these must now also be included in the payment letter.  The bill also restricts the association’s right to foreclose prior to an account being 6 months delinquent.  Any decision for a foreclosure must be made by the board of directors and not delegated to the Association’s manager, collection agency or attorney.    It is our experience that most of the above is already occurring in a vast majority of association’s so this bill will not materially impact association’s other than requiring revisions to the association’s collection policy and demand letters.  We will monitor these closely and let you know of any changes that may occur.

David A. Firmin
2 responses to “And the Roller Coaster Starts
  1. The governemnt needs to stop interfering.

    Let the marketplace sort itself out. If an HOA sees an important benefit to using a management company with a certification, it may elect to do so, but it should not be mandated.

    This is just another example of governemnt stepping in to create a new agency for government bloat, and adding costs to everyone down the line.

  2. Those of us that manage the association without employees, should not be mandated for licensure. I agree with the above comment. If the management company is negligent, then the HOA’s will weed them out.
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