HOA Legi-Slate

As we mentioned in our blog post on August 26, 2010, CAI National is performing a survey regarding transfer fees. This is being done in response to a FHFA proposal that Fannie Mae, Freddie Mac and all federal home loan banks would be prohibited from purchasing mortgages for properties in communities with deed-based transfer fees.  As defined in the proposal "deed-based transfer fees" is very broad and could include any monies that your association charges upon the sale of a unit outside of unpaid assessments.  We encourage you to complete the survey NO LATER THAN SEPTEMBER 16, 2010.

Click here for the survey.

Posted By Loura K. Sanchez In Legislative Miscellaneous 0 Comments Permalink

Last week the FHA Commissioner announced that FHA's new mortgage insurance premium structure will become effective with new loans starting October 4, 2010. The new structure will result in a lower upfront premium but an increase in the annual premium.  The question is what impact will this have on our ever-so-fragile real estate market?  With the one of the countries highest FHA backed loan concentrations, the annual mortgage insurance premium increase may result in less buyers qualifying for FHA back loans and potentially being driven to remain in the rental market.

Posted By Loura K. Sanchez In Legislative Miscellaneous 0 Comments Permalink

On July 21, 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which, in part extended the current raised FDIC insurance standard of $250,000 until December 31, 2013.  The FDIC insures deposits at the nation’s banks and other savings institutions to help promote safety and soundness of such institutions.  What does this mean for your association? If you have CD’s above $100,000 (prior insurance maximum), but under $250,000, you will no longer have to worry about losing coverage on those CD’s maturing beyond 2013.   For more information on deposit insurance, visit the FDIC website.

Posted By Elina B. Hindley In Legislative Miscellaneous 1 Comments Permalink

On June 18, 2010, the Environmental Protection Agency (EPA) announced that they would not begin enforcing the Renovation, Repair and Painting Rule (RRP Rule) until October 1, 2010. Under the rule, which went into effect on April 22, 2010, contractors performing renovation, repair and painting projects on pre-1978 residential housing or child occupied facilities must receive certification from the EPA, use job supervisors who have one day of lead safety training from EPA-approved trainers and follow specified lead-safe work practices. 

The EPA is granting additional time for contractors to obtain their certification due to the difficulties in applying for and completing the necessary training requirements. Workers will have until September 30, 2010, to enroll in a certified renovator class and must complete the training by December 31, 2010.

The EPA is not waiving the requirements of the RRP Rule for contractors to use lead-safe work practices which went into effect on April 22, 2010.

Posted By Loura K. Sanchez In Legislative Miscellaneous 2 Comments Permalink

In the July/August 2010 edition of Common Ground magazine, vehicles that don’t fit in garages were discussed.  Numerous communities here in Colorado, mostly those formed in the early 80’s, prohibit pickup trucks and many other declarations require all vehicles to be parked in the garage.

A Florida association faced this all too common scenario. Mr. Vizzi drives a Ford F350 which won’t fit in his garage. The association fined him and eventually sued in 2006. The association lost with the court ruling that the associations rule was “utterly unreasonable.” An appeals court upheld the decision and the association was ordered to pay approximately $200,000 in attorney fees.

The courts were not persuaded by the fact that the association had attempted to repeal the ban on pickups, nor that the board had a duty to enforce the restrictions. While this could be a rogue decision by a rogue court, it is certainly reflective of the continued scrutiny of community association boards and their reasonableness.

Posted By Loura K. Sanchez In Community Associations Miscellaneous 9 Comments Permalink

Recently there has been a new criminal scheme targeting businesses. The crime involves criminals’ manipulation of targeted business records at the Secretary of State’s office by changing a business’s information in order to imply that they have a legitimate stake in the company. These identity thieves use this maliciously altered information along with other records to apply for lines of credit from major retailers. Before the victim company realizes what has happened, it starts to receive calls from debt collectors and suffers damage to its credit report.

For those clients whom we are your registered agent, we are pro-actively contacting the Secretary of State to receive e-mail notifications on your behalf should anyone make a change to your business record. Should we receive a notification, we will contact you immediately to verify that all changes were authorized.

For those clients whom we do not serve as registered agent, please contact the Secretary of State to sign up for the e-mail notification service, or contact our office should you wish our firm to become your registered agent.

The Secretary of State has worked with the Attorney General, the Colorado Bureau of Investigation, and the business community to create a business identity theft resource website. This website will provide you with a central place to find more information on business identity theft. 

Posted By Robbie R. Ruhaak In Community Associations Miscellaneous 1 Comments Permalink

We have received many responses to our July 9, 2010, blog entry on manager credentialing.  Of all of the interesting responses we have received, one thread in particular caught our attention.  That has to do with CAI mandating manager credentialing and benefiting financially from such a credentialing program.  While HindmanSanchez has no formal position on manager credentialing and believe this issue is one primarily for managers to debate, we did some research on the concerns expressed in this thread and here are some facts we gathered:

1. CAI has a Public Policy addressing Community Association Manager Credentialing.  While the CMCA designation is the preferred credential to be used in legislation, it is not mandated by CAI.  Likewise, the M-100 is the preferred prerequisite educational class for managers seeking a state-approved certification.  However, the Public Policy does not mandate that legislation include the M-100 as the required course.


2. One of the most consistent legislative trends we have seen across the United States is the mandatory regulation of community association managers.  To date, ten states have a regulatory scheme in place for managers with several more states considering regulation.  In those states mandating the regulation of community association managers, cottage industries have arisen which provide educational coursework for managers.  CAI is not the only vendor in these states which is approved to provide education.  In fact, CAI has to compete with other providers for attendees at educational programs. 


3. The National Board of Certification for Community Association Managers (NBC-CAM) created the Certified Manager of Community Associations credential (CMCA).  The CMCA is the only national certification program designed exclusively for community association managers.  Also, based upon our research, we believe it is the only credential for managers that is accredited by the National Commission for Certifying Agencies.  

While our research was not exhaustive, we believe these facts may be of interest in these discussions.

Posted By Molly Foley-Healy In Current Year Legislation 2 Comments Permalink

Recently the board of directors of both the Rocky Mountain and the Southern Colorado Chapters of CAI passed motions encouraging the Colorado Legislative Action Committee of CAI ("CLAC") to seek passage of a concept bill implementing a credentialing program for community association managers.  The boards urged that the CLAC do so within the next two years and that the Committee begin taking all necessary steps to ensure the required sunrise process required by the Colorado Department of Regulatory Affairs is commenced within 1 year.

The concept bill mandates that only a person holding a CMCA certification, as administered by NBC-CAM, shall be authorized to manage common interest communities in the State of Colorado or serve as the CEO or principal of any business entity that employs common interest community managers.  To sit for the CMCA exam, an individual will need to have a high school diploma or equivalent GED certificate, take CAI's M-100 course and take an 8 hour education course on Colorado law governing common interest communities.  In addition, no manager can obtain a CMCA if they have a felony conviction or guilty plea on their criminal record in the last 10 years.

It should be noted that the concept bill is just that - a concept.  In the event CLAC agrees with the recommendations of the Chapters and the Department of Regulatory Affairs determines that managers in Colorado should be regulated, the bill that will ultimately be introduced in the Colorado General Assembly and signed into law - may differ significantly from the concept bill.   

We'd like to hear what you think about the regulation of association managers.

Posted By Loura K. Sanchez In Current Year Legislation 18 Comments Permalink

On June 6, 2010, Governor Ritter signed House Bill 1278 into law.  As originally introduced, HB 1278 would have created an ombudsman to advocate for the rights of unit owners to the detriment of their associations.    

After lengthy negotiations, HB 1278 was completely rewritten and all references to an ombudsman and any advocacy role for homeowners were discarded.  Instead, HB 1278 will attempt to prevent and resolve disputes in homeowner associations through the dissemination of information.    

HB 1278 creates an HOA Information & Resource Center which will be housed within the Colorado Division of Real Estate (“Division”) to provide information on the rights and duties of unit owners, developers and associations under the Colorado Common Interest Ownership Act (“CCIOA”).  The HOA Information & Resource Center will be run by an HOA Information Officer and it is currently anticipated that the Division will create a webpage to house the required information for consumers.

The HOA Information Officer is also tasked with providing a report each year to the Director of the Division of Real Estate tracking the inquiries and complaints received relating to homeowner associations.  This information will be useful during the legislative process in determining whether further regulation of particular aspects of the governance and operations of associations is necessary.    

The costs associated with the HOA Information & Resource Center and the HOA Information Officer will be paid for through a mandatory registration for associations.  With the exception of voluntary associations, all associations in Colorado will be required to register.  The effective date of the registration process is January 1, 2011.  However, it is unclear whether the Division will have the registration apparatus and procedures in place by the first of the year to begin the registration process.

During the legislative process, a fiscal note was produced estimating the cost of the registration at $20.00 for the first year and around $15.00 for subsequent years.  These figures were based upon an estimate that there are approximately 12,000 associations in Colorado.  Since there is currently no reliable data to support this estimate, the cost of the yearly registration for associations is an open question.  However, there is a statutory cap of $50.00 for the yearly registration fee.  

While every association, except voluntary associations, will be required to register on a yearly basis, the following categories of associations will not be required to pay the registration fee: 

• Associations with annual revenue of $5,000 or less; and
• Associations not authorized to levy assessments and do not have any revenue.

Associations that fail to register or keep a registration current will face the following significant penalties:

• Associations will not be permitted to foreclose upon the association’s statutory lien unless the association holds a current registration.  If an association has commenced a judicial foreclosure and the association’s registration lapses, the association cannot proceed with the foreclosure until the registration is brought current.  However, any applicable statutes of limitation will be tolled during the timeframe an association is not registered.
• Associations will not be permitted to take steps to enforce a superlien unless the association holds a current registration.
• Associations will be permitted to bring a lawsuit to obtain a personal judgment against a delinquent owner, but cannot be awarded reasonable costs and attorney fees as part of the judgment unless the registration is current.
• Associations that are determined to be a prevailing party in litigation will not be permitted to recover reasonable costs and attorney fees associated with the litigation unless the registration is current.
• Associations will not be permitted to enforce building restrictions contained in the declaration or rules unless the registration is current.

As a reminder, the registration requirement does not go into effect until January 1, 2011.  We will provide you with an update as soon as the Division publishes the procedures and requirements associated with the HOA Registry.  We also anticipate that a grace period will be given for the initial registration period.  

For periodic updates on HB 1278 and other issues of interest, please visit HOA Legi-Slate.

Posted By Loura K. Sanchez In Current Year Legislation 3 Comments Permalink