The Colorado Common Interest Ownership Act (“CCIOA”) and the Colorado Revised Nonprofit Corporations Act (“Nonprofit Act”) are the two primary statutes governing homeowner associations in Colorado. These statutes are long, complex, and contain many provisions some people are not aware of. This article highlights a few of those important provisions.
Nonprofit Act
☐ Meetings of the board and of the members may be conducted by telecommunication if all participants can hear each other during the meeting. All such participants are deemed present at the meeting; this is why virtual meetings are authorized by Colorado law.
☐ Directors must be individuals; no other requirement to serve on the board exists except as set forth in the bylaws. Therefore, to determine director qualifications, associations must rely on the qualifications set forth in the governing documents, otherwise no qualifications exist other than being an individual.
☐ Unless otherwise provided in the bylaws, a quorum of the board is a majority of the number of directors serving immediately before the meeting begins. Therefore, quorum is not based on the total number of directors required to be on the board, but the total number of directors actually on the board at the time of the meeting.
☐ Unless otherwise set forth in the bylaws, director terms are one year. Therefore, it is imperative your community uses the director terms set forth in the governing documents, and if nothing is set forth in the governing documents, then director terms are one year.
☐ Unless otherwise specified in the bylaws, directors may be compensated. However, this does not always mean directors should be compensated as there are political consequences to consider when directors are compensated.
CCIOA
☐ CCIOA requirements may not be waived through agreement. By way of example only, an owner cannot agree to waive the Association’s requirement to provide notice of a membership meeting via U.S. Mail because CCIOA specifically requires notice of membership meetings to be sent in that manner and a CCIOA requirement cannot be waived through agreement.
☐ Associations must provide education to owners at no cost, at least annually as to the general operations of associations and rights and responsibilities of owners, associations, and the board – this requirement does not apply to timeshares.
☐ Communities created after July 1, 1992, must carry property insurance on all their common elements, including limited common elements, regardless of anything contrary contained in their declarations.
☐ Condominium communities created after July 1, 1992, must carry property insurance on the condominium units except for finished surfaces, owner installed improvements, and owners’ personal property. This means such condominium communities must insure the drywalls, doors, and windows, as well as the originally installed fixtures inside the units.
☐ All common interest communities in Colorado are required to have adopted nine “good governance” policies, which include the following:
✔ Collection Policy
✔ Enforcement Policy
✔ Conflict of Interest Policy
✔ Conduct of Meetings Policy
✔ Alternative Dispute Resolution Policy
✔ Policy on Adoption and Amendment of Policies and Rules
✔ Reserve Study Policy
✔ Investment of Reserve Funds Policy
✔ Inspection and Copying of Records Policy
If your community does not currently have all nine policies in place, you should reach out to the association’s legal counsel immediately.
☐ By amending its declaration, a pre-CCIOA community (i.e. a community created prior to July 1, 1992) does not automatically become a post-CCIOA community and become subject to all provisions of CCIOA. To accomplish this task the following actions must be taken:
✔ Board of directors adopts resolution recommending community be treated as a post-CCIOA association (or if requested by 1/20th of owners);
✔ Written notice of a special meeting is sent to owners along with a copy of CCIOA and explanation as to reason for the meeting; and
✔ At least 67% of the votes present at the meeting (in person or by proxy) approve proposed resolution.
Should you have any questions concerning CCIOA or the Nonprofit Act, please contact an Altitude attorney at 303.432.9999 or at [email protected].