Most everybody knows by now that Colorado associations are required to adopt nine good governance policies pursuant to CCIOA (Colorado Common Interest Ownership Act). However, do you know that in addition to the required policies there is a slew of not-required, but highly recommended policies for associations?
Below is a list of the top seven recommended policies and the benefits having each policy:
1. Allocation of Insurance Deductibles. With wind/hail claims becoming more and more prevalent, and with insurance deductibles being as high as 5% of the building value for such claims, it is best to have a plan for paying the deductible amounts before disaster strikes. This policy addresses who is responsible for the deductible amounts when a property claim is submitted by an association and can be most helpful when an association is facing a wind/hail claim with a deductible equal to hundreds of thousands of dollars.
2. Insurance Claims Submissions. This policy piggy-backs on the deductible policy, and may be combined into one policy with the deductible policy. The purpose of the claims submission policy is to set forth a process for owners to follow when they want to submit a claim to the association’s insurance carrier. Under CCIOA owners have a legal right to submit claims to the associations’ carriers, so it is imperative to have a process in place to avoid an influx of claims being filed with the carrier without the board’s knowledge or involvement.
3. Retention and Destruction of Documents. Although associations are required to have inspection of records policies, they are not required to have retention and destruction of records policies, which essentially set forth how long associations will retain various records and when the records get purged/destroyed. It is not uncommon for owners, who believe their associations did something wrong, to demand access to records that go back many years. If an association no longer has such record, it is typically alleged to have “tampered with evidence” or have acted fraudulently by getting rid of necessary information. However, if the association has a retention/destruction policy in place and follows such policy, such allegations are easier to defend on the basis that the board was following its written policy.
4. Architectural Review. Although many associations adopt architectural guidelines, many fail to take it one step further and adopt a process to be followed by the board and/or architectural committee when requests are made. This policy should specifically set forth the requirements of submitting architectural modification/addition requests, the timing of same, and specific criteria to be reviewed by the board/committee prior to making a decision. The more specific the policy can be, the easier it will be for the association to defend its decisions in court should they get challenged.
5. No Discrimination. With more and more accusations of discrimination being made by owners and residents against their associations, the more important it becomes for associations to adopt safeguards to protect themselves from these types of claims. One way of safeguarding your community, is to adopt and follow a no discrimination policy that sets forth the process the association will use to review and decide upon requests for reasonable accommodations and/or modifications. This process must be incompliance with state and federal fair housing laws and should be prepared by an attorney. Having this policy will ensure the board follows the same process every time and treats all applicants the same.
6. Social Media. If your association has a Facebook page or is otherwise involved with social media, it would behoove the association to adopt a social media policy. This policy should address issues such as who can post on social media, who can edit content, what type of content is allowed, and what happens if the policy is violated.
7. Electric Vehicle Charging Stations. As more and more people start driving electric vehicles, the demand and need for charging stations will continue to increase. Because electric vehicle charging stations are protected by law, associations cannot prohibit owners from installing them. However, the law does allow associations to impose reasonable rules governing the installation, which can and should be set forth in this policy. The policy should address acceptable locations, placement of wires, and electricity charges, if the association pays all electricity in the community.
Keep in mind that policies are adopted by boards (majority board approval) and do not require owner approval. However, policies may not contradict anything contained in the declaration, articles of incorporation, or the bylaws. So if you decide to adopt any of the above policies, make sure the association’s legal counsel either drafts or reviews the policies before they are adopted.
Please do not hesitate to contact an Altitude Community Law attorney at 303.432.9999 if you have any additional questions concerning adoption of policies.