Ombudsman Bill On the Drawing Board
Yesterday, the Colorado House Committee on Business Affairs and Labor took testimony on and debated the current version of House Bill 1278. As outlined in our February 9th posting on HOA Legi-Slate, the bill as introduced would create an Office of the Ombudsman with the following powers:
- Advocate for the rights of unit owners in the governance of associations;
- Offer to mediate disputes between unit owners and their associations;
- Act as a clearing house for information concerning the rights and duties of unit owners, declarants and associations;
- Report to the Division of Real Estate suspected violations under the legislation or of the Division's rules; and
- Report other suspected violations of the law to the appropriate authorities.
It is sad that the legislation apparently is focused on "advocacy for the homeowners," but omits reference to advocacy for the HOA and for the OTHER homeowners, who will suffer financially or otherwise when an errant homeowner is delinquent in dues, creates a nuisance, posits a meritless claim against the HOA or it directors. But that is the way the liberal cookie crumbles these days.
I believe that this is a make work bill for a particular elected official who is term limited and will be in need of a lifetime position that will pay her a large salary which she will be certain to write into this legislation.
It sounds like they want both an ombudsman and a mediator. Instead of 2 different positions (or roles), why not a position of HOA advocate, who would be knowledgeable enough to guide the parties through their disputes and help them arrive at a reasonable resolution? The obudsman position makes it sound like the homeowner is always right and the board or manager is always wrong, and should somehow be made to do what the homeowner wants. We all know this isn't true. Complaining owners are almost-always either wrong or lacking in an understanding of how the HOA works and what it can and cannot do. My experience has been (repeatedly) that, once owners are helped to understand the process, the law and the covenants, they almost-always come to see why it is that they cannot have what they want. I have used this approach many times to talk owners out of suing, which seems to be their bent.
With a person to help guide the process, disputes could be resolved without the need for any judicial process. And, of course, this person could report violations of the existing laws as they become apparent.
But the moral is that the homeowner should not always prevail, but could be worked with, instead of being beten over the head with a baseball bat.
Reading the text of the bill, it seems the office of the ombudsman has absolutely no teeth. Let's assume a hypothetical of a board violating the documents & raising the annual assessment beyond what the documents allow and also not giving proper notice. It seems the best the ombudsman could do in that case is send a strongly worded letter to the board. They'd include an invitation to mediate the dispute, but have no way to compel mediation/arbitration.
It seems the true goal here is in making it easy and affordable to fight an HOA board run amok. Unfortunately, all of the recent proposals lack serious teeth. What the wayward-homeowner advocates really need is not a tooth-less ombudsman, but a new type of court "HOA Court" which would be affordable and function like small claims court except include features like injunctive relief.
This legislation, if not messed up by our lawmakers, should fill the VOID where single homeowners and groups of homeowners can have some recourse to control HOA boards who have been running amok. In one corner of our development, the crappiest part of the development, there were homeowners, led by a real estate agent, who took control of the board, wasted all kinds of money and time, trying to ram through their own agenda.
They are gone now, and sanity seems to have returned. But it was a miserable time.
The only recourse for those whose board was hijacked was an expensive law suit.
The board's legal counsel and the city and county legal system representatives unequivocably have responded that homeowners have no rights, legally, to have their case put up to a third party.
If the law passes, I would not complain.
Most homeowners do not have either the legal knowledge or time to defend their rights against HOA boards that do not operate transparently and that push their own pet agendas. Most Declarations are not very democratic and allow boards to be self perpetuating. All this law tries to do is bring in some balance. As written it does not do that very well and hence the need for a rewrite.
In my HOA we did not need to sue nor did we need an ombudsman or mediator. But that is because there was a bunch of lawyers willing to contribute their time to the insurgents, and some close to the in group saw there was some merit to the insurgents' claims. Now we have a better run HOA and happier owners.
A good ombudsman can facilitate such good outcomes and save everyone time and money.
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