With all of the action surrounding the HOA Information Office Sunset Bill, the introduction of HB 20-1333 occurred without much fanfare. HB 20-1333, sponsored by Rep. Titone (D) takes HOA transparency issues, either imaginary or real, directly in its sights.
The bill attempts to make homeowners associations more transparent by requiring all associations to do the following:
- Uploading the governing documents on a website run by the association. This provision requires all associations, regardless of size, to maintain a website.
- Supplying the governing documents, including all amendments thereto, to the HOA Information Center for publication on a state operated website. This requirement includes the publication of all fees chargeable upon the sale of a home in the community to the buyer or seller. This is in addition to recording the declaration and amendments with the clerk and recorder’s office, thus making the publication of governing documents in no less than three places online.
- Posting on an internet website, with the web address communicated annually to all unit owners, the contact information for the HOA and its management company. This is an expansion of the requirements already in CCIOA.
- Allowing owners to record, at their cost and expense, all board or member meetings.
- Allowing owners, at their expense, to invite independent election monitors to ensure the election process is fair.
- Prohibits the use of secret ballots in association votes unless requested by 20% of the members at the meeting. This excludes use of secret ballot for contested elections. The issue with this provision is that open votes can be used to intimidate those owners voting.
- Creates a presumption of damages in the amount of $50.00 per day if the association fails to comply with a records request within 30 days.
- Requires mandatory board member education.
- Requires professionally conducted reserve studies, which studies must be updated at least every five years, and the Association shall provide for adequate reserves, which funding shall be reviewed annually.
- Requires association financial records to be audited at least annually.
- Requires specific deadlines for transition from developer control.
- Requires sellers to certify to a buyer of a unit the accuracy of information provided and creates a cause of action (reason to sue) the seller if the information is not accurate.
This is the second major association related bill introduced this session and the third bill that will have major implications on homeowners associations. This bill, as it requires professional reserve studies and audits to be performed, and adequate funding of reserve accounts, will most definitely have an impact on association budgets. Stay tuned here for the latest on this and all other association related matters.