A few weeks ago, we let you know that the anticipated CCIOA transparency bill was introduced. We have now had the opportunity to review, digest, and comment upon HB 21-1229, coming in at a mind-blowing 27 pages and with 19 unique sections.
While this bill was intended to improve the Common Interest Community laws, it creates new barriers to homeowner participation and increases costs to both associations and homeowners.
Community associations bring neighbors together, and participation on a common interest community board should be encouraged. Unfortunately, this bill does not recognize the dedication of homeowner volunteers and professional managers. Instead of encouraging participation, it adds burdensome and duplicative regulations that would discourage participation. The vast majority of Coloradans living in common interest communities value and appreciate their Association Board. This bill does not respond to the vast majority. It attempts to apply a “one size fits all” solution to address problems in a very small percentage of communities.
Our primary concerns of the bill include the following:
- The bill amends 13 individual sections of the Colorado Common Interest Ownership Act (CCIOA) as well as portions of five other individual titles (Real Property, The State Internet Portal Authority, Disclosures Required in Connection with Conveyances of Residential Real Property, Homeowners Insurance, and The HOA Information and Resource Center). This will create additional obligations for the association, which may raise fees and assessments in order to comply.
- The bill creates significant new burdens upon the state, which include creating a portal for every association to upload all of their proprietary governing documents and make them publicly available, a requirement on no other nonprofit corporation. This also places the documents in multiple places (county assessor’s site, association’s web site, and the State’s site), thus dramatically increasing the chances that all three sites will contain different information.
- The bill would require proprietary information of each association and management company to be made publicly available. Again, this is a requirement made for no other business.
- The bill requires that all associations in Colorado create, monitor, and update a website. This would be a dramatic increase in burdens for associations, particularly small or self-managed associations.
- The bill requires the use of alternative dispute resolution processes in all disputes with the association, even including disputes regarding delinquent assessments. This would require the association to offer mediation prior to filing a suit, which will only drive the costs of resolution up, not down. As courts already require mediation prior to having a hearing in most cases, this would be duplicative efforts, and again, delay the process and drive costs, including attorney fees, up.
- The bill contains vague language regarding the approval of energy-efficient devices. This will cause additional disputes on the approval of solar panels and other energy creation devices and can lead to increased and frivolous litigation.
- The bill also makes substantial changes to the requirements for conducting meetings, including invading each owner’s privacy by prohibiting secret ballots, which can result in increased bullying. This also allows for the recording of meetings by owners, which may have the effect of chilling speech, as owners and board members will not want to be on a video that may be uploaded to the internet. This allows for the hiring of election monitors certified in parliamentary procedure, which may result in additional challenges to elections rendering more confusion when elections are “done.”
- The bill requires mandatory board member education, which may discourage volunteers from serving on boards and impose significant legal liabilities for board actions and decisions.
- The bill creates a presumption of damages in the amount of $50.00 per day for failing to produce documents within 30 days upon request. This will create disputes as to what documents are required to be produced and whether or not the association complied with a document request.
- The bill prohibits the appointment of directors to fill vacancies where the remaining term exceeds 60 days instead of requiring a special election. This will increase the costs to owners, as an association it may be necessary to have multiple elections per year, which, depending upon the community’s size, could be thousands of dollars per year. Or, some associations may elect not to fill the vacancies, thus creating additional frustrations.
Common interest community Boards and Managers have been working particularly hard during the pandemic to ensure smooth operations and responsiveness during a global emergency. Unfortunately, HB 1229 does not recognize and encourage the contributions of homeowners and managers to their associations.
We are of the opinion that HB21-1229 creates more problems than it is intended to solve and does not address any known issues. Given a large number of issues with the bill, we cannot support its passage.
We will let you know as soon as a hearing date is finalized. At that time, please reach out to the committee members with your comments. Committee Members can be found here.
Mr. Firmin;
Your article raises many significant concerns about proposed changes to CCIOA. One is that the “bill requires mandatory board member education, which may discourage volunteers from serving on boards and impose significant legal liabilities for board actions and decisions.” Do you really support allowing board members to not be educated in their fiduciary responsibilities? From my experience, that is perhaps the most common basis for complaints by members of associations who are not board members. A close second is board members who fail to familiarize themselves with the association’s governing documents. It is not uncommon for frustrated members to run for boards so that they can push their own agenda or so that their long-neglected needs are given a higher priority than non-board member’s needs. Obviously, board members will never suggest that is the case. However, when one looks at what actually happens, it is often an indisputable fact. Even a well-intentioned board member rarely puts the needs of another association member ahead of their own. It is simply all too common that breaches of fiduciary duties occur because board members do not believe their judgments should be measured against established law. They prefer “ignorance of the law” to actual knowledge of it. I think mandatory education has merit and perhaps should become part of the Colorado Common Interest Ownership Act (CCIOA).
Hi Mr. Foottit,
I hear that you are passionate about making sure board members are educated on their responsibilities and agree that acting in the best interest of the HOA is crucial. That said, do you think that this could be handled in the governing documents of an individual HOA instead of via legislation that affects every HOA in the state?
As an example, I’m a member of an HOA with 8 units and every unit owner is automatically on the board per our governing documents. It’s already hard enough to find volunteers to help with HOA projects but requiring each of us, including those who aren’t active in the HOA’s operations, to attend mandatory classes isn’t reasonable for our situation.
Ms. Taylor:
I do think the requirement can be in the governing documents and that we do not need a governmental agency. However, the ability to get such a provision into existing declarations is difficult and expensive requiring an amendment and member vote. The other governing documents such as the bylaws can often be amended by the board without the involvement of the entire membership. I have seen far too often the board amend the bylaws when the amendment is not necessarily in the best interest of the association. Whereas adding it to C.C.I.O.A. would make it a uniform and universal requirement that applies to every HOA in the state saving individual HOAs significant sums of money.
As to your example, which I suggest is probably rare where every member of the association is on the board, if that is the way the HOA is structured, the board members should still be educated as to their fiduciary responsibility to each other.
Yes, yes, yes, yes, yes! Having someone on the board who won’t read and familiarize themselves with the rules/ guidelines/ covenants they and the rest of the community are to follow, is abysmal!! And then to decline homeowners’ help in editing/ rewriting outdated governing documents for the following year’s annual meeting (or the one after that), is even worse. Mandatory education is the only way to go. And I have a few ideas on how that will not burden the members who might consider running for their Board of Directors or other committees. Hmmmmm…..
This version of the proposed bill, according to the fine summary by David Firmin, is outrageous. It’s shameful that a progressive [small “p”] State like CO elects such inept, do-gooder, ignorant legislators. Obviously, the author of this bill has taken snippets of complaints from a tiny minority of HOA owners, and extrapolated these into a massive model of useless, wasteful rules and procedures. allegedrievances,imposingdasticremedies uponheendtire HOA wold inColoado. DTheauthor isclearly deranged, rying o cmpensae for her/his lack of undesanding of HOAs eneally, to seekhis/her “15minuesoffame.”
Thank you for sharing this! It is a great overview of a bill that significantly oversteps which I wouldn’t have been aware of had it not been for your email. I’m glad I have a chance to take action.
An HOA can always vote to require things like mandatory board member education but adding 27 pages to an already overwhelming and confusing CCIOA law is taking things in the wrong direction. The additional burden and expense, especially for small HOAs like the two I belong to, has a significant impact on our ability to be successful. I’m reaching out to all of the committee members today.
For small HOA, like the one mentioned in comments previous, which do not legally need to adhere to CCIOA, does this new House Bill have any concern? We try to follow the reasonable CCIOA regulations, just as a method of providing services and protection, but were told by legal council, that we did not fall under CCIOA. Should we concern ourselves with this house bill, or are changes to who, what, and what-size HOA a part of this house bill too?
Thanks for this blog.
From the very first sentence, you are wrong; community associations do not bring neighbors together, but rather they make neighbors hate each other and are the source of favoritisms and ugly politics – these are the facts. For example, in our neighborhood, the tennis courts are pristine (the best in the city!), while the pools are run down because the entrenched board members play tennis and don’t use the pool.
The second sentence, ‘participation on a common interest board should be encouraged:’ who should encourage it, the current board? Your law firm? Who? Neither of these parties helps at all with participation in our HOAs or transparency of process- what are you talking about? The bill introduces mandatory transparency, which is a foreign concept to most HOA. Feel free to challenge me on this one, I’d love to have a conversation. Publishing summary minutes does not equate transparency.
The bill adds real bite to unenforceable regulations from 2012, rather than adding redundant regulations. Case in point, our board members actively campaign against this bill using the privilege of having access to personal emails from the community. Moreover, they ganged up with the property manger, their friend forever, to campaign against this bill. Is this ok with you? The bill touches on critical items that need to be addresses regarding HOA governance. If I stand a better chance to expose this abuse of power and do something about it, the bill is good for me as a community member. And if the HOA charges me more to bring in more transparency, that’s a good thing.
You don’t want board members to be educated? After only four months on the board, I realized that by duly reading our Covenants and Bylaws, I am more aware of them than anyone else on the board, especially more than the old timers whom have run the show for many years and no one can remove – and especially retired lawyers on board, whom are people driven by fear and are allergic to transparency, to say the least.
We got yelled at by board members last year, abused, for asking about the pools opening. This year is the same. There is nothing we can do about this as community members. This bill gives us hope.
As a law firm, it’s normal to want less transparency in HOA operations so you can make money off of the current murkiness. It’s understandable. But you should disclose this fact. See how transparency works?
Please excuse the irony, but it is necessary. Thanks.