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.