On March 26, 2018, House Bill 18-1342 was introduced and assigned to the House Business Affairs and Labor Committee. HB 18-1342 proposes that all pre-Colorado Common Interest Ownership Act (“CCIOA”) communities, i.e. communities formed prior to July 1, 1992, comply with the budget veto process found in Section 303(4)(a) of CCIOA , which is currently only applicable to post-CCIOA communities.

If signed into law, this means that pre-CCIOA associations will have to comply with CCIOA time frames and procedures for mailing the proposed budget to all owners, setting a date for a budget meeting, and, most notably, allowing a majority of all homeowners, or any larger percentage specified in the declaration, the right to veto the proposed budget.

Please note if this bill is signed into law it will be effective for any and all budgets adopted by pre-CCIOA communities as of July 1, 2018.

If you have any questions on the above, or the budget process in general, please contact any of our attorneys at (303) 432-9999.

7 responses to “Pre-CCIOA Communities Might Have to Allow Homeowners the Right to Veto Budget
  1. 1. Can the HOA Board force Committees to set term limits on those who volunteer to be on the Committee?

    2. What year did CCIOA require all Committees to be open to the residents?

  2. I thought that the budget provisions already applied to pre CCIOA associations effective July 1, 2018, at least para 38-33.3-117 (1.8) indicates that para 303 b a (I) which has the requirement to send the budget to owners and have a meeting is required of pre CCIOA communities. It appears the only change is the clarification that the veto process also applies.

    1. This new bill merely finished what the prior bill did not address, which is the actual veto requirement. The prior bill, which was signed into law effective July 1, 2018, only requires pre-CCIOA assns to comply with the budget reporting requirements (i.e. call a meeting to consider the budget), and not the actual veto requirement. New one, is passed, willl require pre-CCIOA Assns to comply with veto as well.

  3. As President of The Ranch CC Filing #4 I’m am “totally against” this government inference in our HOA.
    Our budget is reviewed at our annual meeting by our Treasurer with all residences who attend. The floor is then open for all comments and questions. Additionally our annual budget is posted on our HOA website for all residence to review and ask questions at any time.
    Our HOA has been in existence for over 35 years and there has never been a problem with our HOA and its openness to our community.
    To me this is another government solution looking for a problem.

    VOTE NO!!
    Tim Beck
    President
    Country Club Estates HOA Filing #4

  4. This brings up the question that if the majority of homeowners can veto a proposed budget, then how does the board make sure that it has enough money? What happens when the HOA can’t pay its bills and becomes bankrupt?
    It makes me wonder if the sponsors of this bill have ever served on an HOA board – I suspect they have not.

    1. Good point, and lets hope pre-CCIOA assn will still be able to pay their bills if this legislation gets passed! In actuality, however, its fairly easy to get a budget approved, even under this new veto scheme. Note that when this legislation was passed for post-CIOA communities several decades ago, the intent was to provide for some checks and balances against the board’s spending ability, while not tying the board’s hands. So, if a board appeared to go wild on spending, the budget veto process allowed concerned homeowners to attend a meeting to ask questions about the budget and vote it down if the forthcoming answers did not suffice. However, the legislature incorporated the “right to veto” process vs. requiring the owners to “approve” the budget, which made it more difficult to reject the budget. Unless a majority of ALL units in the community (not a majority of those units at a meeting) or any HIGHER % specified in the declaration, vote to reject the budget, it is deemed approved. Thus, it is usually not a problem to get the budget approved.

  5. Our Pre-CCIOA HOA Board recently voted by their private emails to increase next year’s budget. There was no notice to any members that a budget discussion would be held. One Board member ( out of 5) voted No. At the annual meeting the next month, when it was announced that dues would be increased, the majority of HOA members present (although not a quorum) expressed great dissatisfaction that they had no opportunity to express dissension or even have the opportunity to HEAR a debate on the increase of dues. Our only opportunity to hear that one Board member voted against a dues and budget increase was when he verbally announced at the annual meeting that he had done so.
    Had members known of this private discussion among Board members, then they might have been able to muster a quorum to at least request a discussion and a public meeting vote by HOA Board members! Was this situation handled legally???? Our HOA Board handles most discussions, decisions, and votes by email and usually doesn’t notice their in-person Board meetings.

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