As part of the sweeping changes to the Colorado Common Interest Ownership Act in the 2013 legislative season, the Office of HOA Information and Resources was required to study the legislative and operational components of other states to determine how those regulatory structures work and deliver a report, along with recommendations back to the Legislature. The report, delivered earlier this week, contained six different recommendations for improving the operations of Common Interest Communities within the state. In general however, the report did not recommend any major changes to CCIOA for this year in order to give an opportunity for the manager licensing requirement program to be implemented. With this in mind, we expect a relatively light legislative season. However based upon the recommendations contained in the report, a direction for change has been set. The recommendations are as follows:
- A phasing out of the Pre/Post CCIOA designation. The report cited a concern with non-standard legislation in relation to pre and post CCIOA communities. The authors of the report believe that phasing out the pre/post CCIOA distinction will make compliance requirements uniform for all associations.
- Establishing Binding Arbitration Program for Owner disputes. Of great concern is the inequitable position between associations and owners to resolve disputes. The report recommends creating an arbitration or mediation program to reduce the burden on the Colorado Court system while making disputes quicker and less costly to resolve.
- Develop a referral system for mediation. The report states that “mediation is an important component of a comprehensive dispute resolution system.” This proposal would allow owners and associations to resolve disputes prior to taking action in arbitration or the courts and may be a key component to an overall, comprehensive regulatory scheme geared at alleviating complaints from owners.
- Revise registration requirements. While the legislature, last year, clarified that all associations (Pre and Post) must register, there is still confusion as to what information is given. The report suggests revising the registration requirements to make registration easier upon the individual associations.
- Establishing a per unit fee for registration. This would assist in the funding of the recommended programs. Currently, there is a uniform fee for registering an association with the Division of Regulatory Agencies. The recommendation would change that with larger associations paying a great deal more in registering. The report cites other state fees ranging $2.00 – $4.00 annually per unit.
- Establish an election monitoring program. The report address concerns with owners regarding the integrity of association elections. By establishing an election monitoring system, the sanctity of the election could be assured and greater trust in the association may be achieved.
Upon reviewing the report, it is clear that a road map for change in the Association industry has been established. We will keep you apprised as to which, if any, of these recommendations are discussed this year.