HOA Legi-Slate

In the last few months, Senator Hagedorn and Representative Carroll have been meeting with concerned parties, including HindmanSanchez, to discuss the SB 100 Clean-Up Bill. HindmanSanchez's participation included meeting with both Senator Hagedorn and Representative Carroll and providing them with suggested amendments, many of which are reflected in the bulleted list below. We now have an idea of how the bill is shaping up. Although it is too early to tell what exactly will be in this bill, at this time, we anticipate the following:

• The language of ¬ß38-33.3-106.5(1)(c)(I) [display of political signs] that provides the maximum dimensions for displayed political signs will be proposed to be amended to provide these dimensions in a less confusing manner.
• Section 38-33.3-106.5(1)(d)(II) [parking of emergency vehicles] will be proposed to be amended to clarify that the vehicles addressed by this section provide 911-types of emergency services, not such "emergency" services as cable or 24-hour plumbing etc.
• Section 38-33.3-106.5(d)(II) [parking of emergency vehicles may not interfere with the reasonable needs of other members of the association to use streets and driveways] will be proposed to be amended to add "guest parking area" to "streets and driveways," to clarify that the parked emergency vehicle may not interfere with the reasonable needs of other members of the association to use the association's guest parking area, in addition to its streets and driveways.
• The requirement in section 38-33.3-209.4(2)(e) that associations disclose the results of "any financial audit or review for the fiscal year immediately preceding the current annual disclosure" will be proposed to be amended in such a manner to remove the possibility that an association will be unable to comply because they have not yet received the results of its audit or review for the year preceding the annual disclosure within the 90 days in which the disclosures must be made. This will be proposed to be accomplished by either allowing for a longer period of time to make this disclosure or by allowing the disclosure of the results of the most recently completed audit or review.
• Section 38-33.3-209.5(1)(a), which requires associations to keep their records in accordance with generally accepted accounting principles ("GAAP"), will be proposed to be amended to require a more association-friendly and practical means of keeping financial records.
• Section 38-33.3-217(1)(a) [automatic reduction of affirmative votes needed to amend an association declaration to 67%] will be proposed to be amended to clarify that associations may still pursue a court order as allowed by ¬ß38-33.3-217(7) to reduce the required percentage of affirmative votes needed to amend its declaration to less than 67%.
• Section 38-33.3-217(1)(b) [first mortgagee approval procedure] will be proposed to be amended to clarify that an association that has an alternate first-mortgagee notification procedure set-out in its declaration is not required to follow the procedure set-out in the statute.
• The language of the owner participation at board meeting section [¬ß38-33.3-308(2.5)(a)] will be proposed to be amended to clarify when owners have the right to speak at board meetings.
• Section 38-33.3-310 [secret ballots must be used to elect board of directors] will be proposed to be amended to remove the blanket requirement for secret ballots for board member elections and substitute conditions - most likely at the board's discretion and if a certain percentage of owners request one - under which a secret ballot will be required.
• The requirement for a neutral third party to count ballots in ¬ß38-33.3-310 will be proposed to be removed and replaced with language that allows a committee of non-candidate, non-board member owners to count the ballots.
• The Board Member Conflict of Interest Section [¬ß38-33.3-310.5] will be proposed to be amended to track the conflict of interest section of the Colorado Revised Nonprofit Act [¬ß7-128-501], which allows board members with conflicts to vote if they disclose their conflict to the board.
• The insurance provision [¬ß 10-4-110.8] will be proposed to be revisited to clarify when homeowners may make claims against the association's insurance.

As soon as it's available, we will post the SB 100 Clean-Up Bill.

Upon first reading there is one change that leaps out at me.

I think softening the blanket requirement for secret written ballots for board member elections is nothing short of an atrocity. It is a terrible disappointment to me that this is being even considered.

Requiring secret written ballots is not at all burdensome. All it requires is a modest amount of prior planning. It tends to encourage identification and nomination of candidates prior to the meeting. Moreover, it promotes and encourages the insertion of write-in candidates where members can write-in names without being identified to the board. This is an excellent provision. It should be retained as is.

If the decision to hold a secret ballot is left up to the board or to petition by a certain number of members, it simply will not happen. Candidates will not be solicited in advance; opportunities to replace abusive and incompetent board members will not be advertised ahead of the meeting; incumbents will be re-elected "by acclamation" or consensus; and the status quo will continue to prevail.

If this happens, it will be a genuine roll-back of homeowners' rights and the ability of homeowners to take responsibility for an abusively managed association.

I have just re-read the 38-33.3-310 (b) (I). (neutral third party ballot counters)

I see no real problem with it. As writen, it provides an alternative to the neutral party.

The only revision I would like to see is that the alternative be a committee of at least two or more non-candidates and non-board-members selected by random from a pool of four or more unit owners.

I think the education requirement should be changed from mandatory to optional. At our Budget Meeting in November one couple, representing one home out of 61, attended and their stated purpose was to thank the board for their work in 2005. (We had no monthly fee increase.) If you can't get homeowners to attend to learn how their HOA is spending money, what makes anyone think they will come for any other form of "education."

All of the proposed changes to "clean up" 05-100 were pointed out last year, before the bill was ramrodded through. I still don't understand why the Legislature felt it necessary to rush through this hastily-drafted and often-amended piece of legistlation last year, instead of working with association professionals to introduce a well-thought-out piece of legislation this year. The association which I manage, and the one in which I live took this bill very seriously, and spent many hours and lots of money revising and reprinting our communitys' Homeowner's Manuals. Now, it appears we will have to go through this again.

Just a sincere thank you for generously sharing information---timely and often critical information---to those of use who manage associations in rural, non Front Range communities.

Have a great New Year in your "new" professional organization.

Since there has been a criticism posted regarding the mandatory education provision. I'd like to suggest a posture of "UNTIL YOU'VE TRIED IT, DON'T KNOCK IT".
The mandatory educational meeting might just be one answer to an apathetic membership if it is conducted in a positive and well planned manner and adequately publicized.
It might even help energize a "do-nothing" board that wants to do only what is absolutely required.