Most individuals know that CCIOA requires associations in Colorado to adopt certain policies; one of these policies is the “covenant enforcement policy”, which specifies how violations are to be reported, investigated, and addressed.   Additionally, these policies should contain fine structures informing owners of the fine amounts that may be imposed against them if they violate association covenants or rules.

However, did you know that Section 209.5 (2) of CCIOA also prohibits associations from imposing fines unless such associations have written policies governing imposition of fines?  Indeed, not only must an association adopt such policy setting forth the fine amounts, but the fine policy must also include a “fair and impartial fact-finding process” to be used by associations when complaints are received.

The fact-finding process must be used to determine whether the alleged violation really occurred and whether the owner alleged of wrongdoing is the one who should be held responsible for such violation.  This process is typically referred to as a “hearing” but don’t let the legalese fool you—the hearing need not turn into a trial, but may be quite informal

CCIOA goes on to provide that an “impartial decision maker” is defined as a person (or group of persons) who has authority to make a decision concerning enforcement of the covenants.  However, such person(s) cannot have a financial or other personal stake in the outcome of the hearing.  Thus, in most cases, the decision maker is the board or directors.

So what’s the lesson to be learned in this case?  If you do not have an enforcement policy in your association, you should adopt one as soon as possible.  If you already have a policy, make sure it contains the above information.  If you’re not sure whether your policy complies with the above requirements, you should ask the association’s legal counsel to review the policy and make recommendations.

If you have questions concerning your covenant enforcement policy (or any other policy), please contact a Altitude Community Law attorney at 303.432.9999.

Elina B. Gilbert
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