2010 Colorado Legislative Tracking Report - Updated March 8, 2010

Retooled Ombudsman Bill Referred to House Appropriations Committee

On March 3rd, the Colorado House Committee on Business Affairs and Labor passed a retooled version of House Bill 1278 and referred the bill to the House Appropriations Committee for consideration.  The amended version of HB 1278 does not include an advocacy role for an ombudsman.  Instead, the amended bill focuses on information gathering and education with the following provisions:  

  1. Registry for Associations.  Under the Auspices of the Division of Real Estate, homeowner associations will be required to register on a yearly basis.  The purpose of the registry is for the State of Colorado to get a handle on how many associations actually exist in Colorado and to be able to communicate with those associations.  The current anticipated cost of the registration is $20.00 for the first year and is expected to reduce to approximately $15.00 for the second and subsequent years.  However, an updated fiscal note is being prepared which will take into account the retooled version of the bill.  We will provide you with more information on the anticipated cost for associations as it becomes available.
     
  2. Track Inquiries & Complaints.  The Division of Real Estate will also be responsible for tracking inquiries and complaints relating to homeowner associations.  The purpose of this provision is to determine whether there are any trends of concern relating to the complaints.  This data will be utilized to determine whether future changes to the regulation of associations are necessary.  Revisions to CCIOA are currently based upon anecdotal complaints received by legislators and do not necessarily reflect trends in associations.  
     
  3. Information Clearing House.  The bill also provides that the Division of Real Estate will act as a clearing house for information concerning the rights and duties of unit owners, declarants, and homeowner associations.  

We will continue to keep you updated on HB 1278.

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Small Common Interest Community Bill Killed on House Floor

On Wednesday, March 3rd, the Colorado House defeated HB 1290 by a slim 3 vote margin.  Had HB 1290 passed the House and had it ultimately been signed into law, it would have permitted a small common interest community to exempt itself from most of the provisions of the Colorado Common Interest Ownership Act.

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Contact Your State Representatives Today - Ask Them to Oppose House Bill 1290

On February 23rd, the House Committee on Local Government passed an unamended version of House Bill 1290 out of Committee to the full Colorado House of Representatives for action.  The bill that will be acted on by the House allows a small common interest community to exempt itself from most of the provisions of the Colorado Common Interest Ownership Act ("CCIOA").  A small common interest community: (a) contains no more than 20 units; (b) does not impose assessments of over $400.00 per year (adjusted for inflation); and (c) has annual revenues or expenses of less than $250,000 per year. 

CAI's Colorado Legislative Action Committee ("CLAC") is asking that you contact your State Representatives today to ask them to oppose HB 1290 - since homeowners living in small common interest communities deserve the same protections that homeowners living in larger associations are afforded under CCIOA.  

Attached is a Position Paper created by CLAC which more fully explains the problems with HB 1290.   

Please utilize Project Vote Smart to locate the contact information for your State Representative.  Simply type in your zip code on the left hand column of the webpage where it says "Find Your Representatives."

 

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2010 Colorado Legislative Tracking Report - Updated February 25, 2010

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:

  1. Advocate for the rights of unit owners in the governance of associations;
  2. Offer to mediate disputes between unit owners and their associations;
  3. Act as a clearing house for information concerning the rights and duties of unit owners, declarants and associations;
  4. Report to the Division of Real Estate suspected violations under the legislation or of the Division's rules; and
  5. Report other suspected violations of the law to the appropriate authorities.
Following testimony yesterday from homeowners who advocated for an ombudsman, members of the Committee concurred that there is a need but the current version of the bill is not workable.  The Denver Daily News reported that the Chief of the Division of Real Estate testified that ". . . the bill as is won't work because there is not written into law a standard of conduct for homeowners' associations that would guide and direct the ombudsman." 
 
The sponsors of the legislation were directed to continue to work with stakeholders on revising the bill.  The next hearing on HB 1278 is scheduled for March 2nd and we will keep you updated on the bill as it evolves.
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SB 93 Update - Keep Contacting Your State Senators!

On Thursday, February 18th, we posted a Call to Action on HOA Legi-Slate asking each of you to contact your State Senators to tell them to oppose SB 93 which was scheduled to be voted on by the Colorado Senate that day.  A vote on SB 93 was not held on the 18th and the bill will be taken up by the Senate for action this Thursday.   
 
SB 93, as amended, addresses public trustee foreclosure sales and the ability of the purchaser of a property foreclosed upon by a lender ("certificate of purchase holder") to pay off junior lienors (like homeowner associations) that have a right to redeem the property.  While the concept of junior lienors being paid off by certificate of purchase holders is not a bad concept - the amended version of the bill which will be voted on by the full Senate is one-sided and does not provide any protections to ensure associations will receive full payment of their liens in an appropriate manner.
 
Please contact your State Senators by Thursday to ask them to vote NO on SB 93!  Tell your Senators that:

  1. SB 93 creates uncertainty for homeowner associations.  SB 93 requires an association  to accept payment from the certificate of purchase holder.  However, the bill does not require the certificate of purchase holder to tender payment of the full amount of the association's lien.  Are associations required to accept less than full payment of the lien?  What recourse do associations have if they do not receive payment for the full amount of the lien?  The bill is silent on these issues and creates uncertainty and loss of revenue for associations. 
  2. SB 93 is vague and creates unreasonable expectations for homeowner associations.   SB 93 does not specify when the certificate of purchase holder may tender payment to an association.  Is an association required to accept payment once it has already redeemed the property?  Is a volunteer or agent of the association required to be available to accept payment anytime of the day before the redemption period ends?  Are board members required to accept payment at their places of business?  Are board members required to sit home and wait for certificate of purchase holders to make payments?  All of these questions will end up being decided in the courts.  Associations cannot afford this litigation. 
  3. SB 93 will create a procedural mess.  The amended version of SB 93 attempts to put into the highly procedural public trustee foreclosure statute the concept that certificate of purchase holders have the right to pay off junior lienors.  However, the bill does not address when in the complicated timeline these payments can be made and how these payments affect the inconsistent procedural rights afforded junior lienors in the statute.

Attached is a Fact Sheet that more fully explains the problems with SB 93 and a copy of the Pre-Amended Bill.

Please utilize the Project Vote Smart weblink below to locate the contact information for your State Senator.  Simply type in your zip code on the left hand column of the webpage where it says "Find Your Representatives." 

http://www.votesmart.org/index.htm 

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Call Your Senator Immediately! SB 93 Going to the Floor Today!

CALL TO ACTION

URGE SENATORS TO OPPOSE SB 93!!

SB 10-93 Orderly Resolution of Claims in Foreclosures Involving Junior Liens - By Senator Lundberg

Community Associations Institute Urges you to OPPOSE SB 93

As amended, SB 93 permits a certificate of purchase (COP) holder to pay a junior lienor the secured debt without the ability of the junior lienor to refuse payment and without adequate procedural safeguards to protect the interests of homeowner associations under Colorado law.

Please call your Senator now to oppose SB 93 for the following reasons:

·         As amended, the bill creates uncertainty for homeowner associations.

·         Homeowner associations will be required to accept tender regardless of the amount or accuracy of the amount.  This will lead to a loss of revenue for associations during tough economic times with no recourse against the COP holder.

·         This bill will create a procedural disaster.

Attached is a fact sheet and a copy of the pre-amended bill.

Please utilize the Project Vote Smart weblink below to locate the contact information for your State Senator.  Simply type in your zip code on the left hand column of the webpage where it says “Find Your Representatives.”

http://www.votesmart.org/index.htm

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Bill Introduced in Colorado Creating Ombudsman for Homeowners

On February 5th, House Bill 1278 was introduced by Representative Su Ryden in the House and is being sponsored in the Senate by Senator Morgan Carroll.  The bill creates the Office of the HOA Ombudsman.  Under the bill, as currently written, the Ombudsman would be empowered to:

  1. Advocate for the rights of unit owners in the governance of associations;
  2. Offer to mediate disputes between unit owners and their associations;
  3. Act as a clearing house for information concerning the rights and duties of unit owners, declarants and associations;
  4. Report to the Division of Real Estate suspected violations under the legislation or of the Division's rules; and
  5. Report other suspected violations of the law to the appropriate authorities. 
The bill provides that the operating expenses of the Office of the HOA Ombudsman shall be paid for from the HOA Ombudsman Cash Fund which will consist of "surcharges on filing fees paid by unit owners' associations and collected by the Secretary of State."  In particular, the surcharge will apply to associations that "file Articles of Incorporation or Articles of Organization" with the Secretary of State.  The bill does not specify the actual amount associations would pay for the surcharge. 
 
Tell us what you think:

â–ºDo you think homeowners need an advocate to assist them with issues they have with their associations?

â–ºDo you think creation of an Ombudsman is the way to go?

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Junior Lien Bill Heard in Senate Committee

On Monday, February 1st, the Colorado Senate Committee on Business, Labor and Technology heard testimony on Senate Bill 93 which we discussed in our January 25th posting on HOA Legi-Slate.  In short, the bill would require an association - or an investor who was assigned the association's lien rights - to accept payment of the lien by the purchaser of the property following a public trustee foreclosure sale.  Payment of the lien would act to extinguish the redemption rights on the lien.   

Testimony on the bill included assertions that associations are essentially auctioning off these lien rights to the highest bidders and are making money hand-over-fist.  There was also testimony that the investors who purchase these lien rights are unscrupulous in driving down the purchase price of properties at foreclosure sales - thereby reducing their costs to redeem.

In addition to considering the remedies outlined in the legislation, Senators kicked around the idea of extinguishing the redemption rights of all junior lienors and to require them to protect their liens by bidding at the foreclosure sale.  Obviously, requiring an association to bid on property at a foreclosure sale to protect the association's lien would be a horrendous result.  The bill was ultimately tabled by the Committee and Senator Lundberg was directed to meet with stakeholders to hammer-out a mutually acceptable solution.  

Tell us what you think:

 
  1. Do you think the ability of associations to assign lien rights is an important collections tool?
  2. Would you support the termination of redemption rights which would require associations to bid on the property at a foreclosure sale to protect the value of the association's lien?

 

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Senate Bill Addresses Junior Liens

On January 20th, Senate Bill 93 was introduced in the Colorado General Assembly by Senator Lundberg.  This bill would require all junior lienors to accept tender of payment of the junior lien amount from the purchaser of the property at a public trustee foreclosure sale.  In the association context, if a purchaser tenders payment to an association to satisfy the association's lien -  that payment must be accepted, would extinguish the association's lien and eliminate the association's right to redeem the property or assign the lien.    

Under the current version of the legislation, associations are required to:
  1. Submit with the notice of intent to redeem, a signed statement of the amount payable to the association on the association's lien; 
  2. Accept payment of the lien amount which is tendered by the purchaser within 10 business days following the public trustee foreclosure sale;   
  3. Execute a release of lien upon receiving tender of payment.
 
This bill, as currently written, would likely impact the feasibility and time-frames of associations assigning their lien rights to investors.
 
We will keep you updated on the status of SB 93 as it progresses through the legislative process.

 

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Legislative Session Off to Quick Start on Issues Important to Associations

It has been less than one week since the Colorado General Assembly convened for the 2010 legislative session and at least four bills of interest to associations have already been introduced.

House Bill 10-1084: Introduced in the House by Representative Acree, this legislation promotes the ability of individuals to go onto the unoccupied property of another to trim or water vegetation and to remove accumulated weeds, brush, trash, or debris from the property. 
 
House Bill 10-1086:   Introduced in the House by Representative Curry, this bill prevents attractive nuisance claims from being brought against landowners for injuries and damages related to the use of land for recreational purposes by the public and from facilities relating to water rights. 
 
House Bill 10-1118:   Introduced in the House by Representative James Kerr, this legislation gives Boards of County Commissioners the authority to regulate distressed real property.   
 
Senate Bill 10-045Introduced in the Senate by Senator Morse, this bill requires lenders to work with homeowners to attempt to find mutually acceptable agreements to avoid foreclosures. 
 
To learn more about these bills and to stay in the loop on the latest legislation of interest to associations, check out our Legislative Tracking Report on a routine basis.
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Ready, Get Set, Go!

The Colorado General Assembly convened today for the 2010 legislative session. To what extent associations will be the subject of legislation remains to be seen.  However, we do know this much - bad press and complaints to legislators about associations drive legislation.  Do you think associations will be front and center again this legislative session?  Tell us what you think.  
 
HindmanSanchez remains committed to providing you with up-to-date information on legislation affecting associations.  Keep your eye on HOA Legi-Slate for updates and information as it becomes available.

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Governor Ritter Unveils Abandoned Homes Legislation at Pre-Christmas Press Conference

On Tuesday, December 22nd, Governor Ritter appeared at a press conference held at the Clements Community Center in Lakewood to unveil legislation that will permit lenders to expedite the public trustee foreclosure sales of abandoned properties.  Representative Dianne Primavera, Representative Jeanne Labuda and Senator Michael Johnston will sponsor the legislation.

The intent of the legislation is to cut down on the problems associated with abandoned properties which are being foreclosed upon.  Governor Ritter noted that the negative consequences associated with these properties include blight, being a magnet for criminal activity and a reduction of property values in the neighborhoods where these properties are located. 
 
Chad Otto, President of the Grant Ranch Master Homeowners Association, was introduced by Governor Ritter and spoke on the challenges that community associations face with abandoned properties.  Mr. Otto described the difficulties associated with collecting unpaid assessments from the owners of these properties.  He also addressed the problems associated with maintenance of lawns, shrubs and structures.  Mr. Otto concurred with Governor Ritter's conclusion that the best way to protect property values is to get owners into these abandoned homes as quickly as possible.
 
This legislation will be introduced during the upcoming legislative session which begins on Wednesday, January 13, 2010.  We will keep you up-to-date on this legislation as it proceeds through the legislative process.
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SB 09-87

Don’t forget that Senate Bill 09-087 (“SB09-87”) requires that all special districts must provide to their electors a notice containing certain basic information about the district by January 15thof each year.

SB09-87 authorizes several methods by which a district can make its notice available to its constituents.

*         Posting the information on the official website of the Special District. SDA members may have their notices posted on the SDA website at www.sdaco.org;

*         Mail the notice to each household where one or more electors of the Special District resides;

*         Include the notice as a prominent part of a newsletter, annual report, billing insert, letter, voter information card or other notice of election or informational mailing.

This notice must be filed with the county Clerk and Recorder and be available at special districts principal business office.

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Association Gets Tough on Delinquent Owners

A gated community in Florida with a 33% delinquency rate is getting tough on homeowners who don't pay their assessments.  The community is installing a transponder system that will make it inconvenient for delinquent homeowners and their guests to reach their homes.  The new system will allow the association to delete, suspend, or assign access times through security gates into the community.  While we don't recommend that associations in Colorado prohibit access and parking for homeowners, there's nothing in the law that prohibits associations from making access inconvenient. 

Do you think the association in Florida has the right idea?  Tell us what you think! 
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EEOC Gives Notice of Proposed Rule Making on Amendments to the ADA

Generally the public accommodation portions of the ADA do not apply to associations.  However, if your association employs over 15 individuals, the employment provisions of the ADA do apply.  The EEOC has announced proposed rule making which will cover the employment provisions of the ADA.  The rule making  addresses the definition of a "disability" which has become very blurry given the Supreme Court decisions, the ADA Amendments Act, and the Rehabilitation Act.  You can read a Q&A of the proposed rule making and provide comments for 60 days.

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Special District Notice Requirements Change

As we posted in July, Senate Bill 09-87 becomes effective September 1, 2009.  This bill  requires special districts to prepare annual disclosures of certain information to every elector of the district.  A change to this requirement has been made which now calls for all posted notices of regular and special meetings of a special district to be posted a FULL 72 hours before the meeting time.  The prior version of the statute required notices to be posted "at least three days prior to" a meeting.  Recent cases have made it clear that courts look very closely at the technical aspects of special district meetings so following the law carefully is very important.

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Annual Disclosures Required by Special Districts

On September 1, 2009, Senate Bill 09-87 becomes effective. This bill requires special districts to prepare annual disclosures of certain information to every elector of the district. Disclosures must be made between November 16th and January 15th of each year. The annual disclosure includes but is not limited to:

    • The address and telephone of the principal business office;
    • Names of the board members;
    • Times and places of the regularly scheduled meetings including the date of the election of board members;
    • Procedure and time to submit a self-nomination form for the election;
    • The current mill levy, and total ad valorem tax revenue received during the last year;
    • A statement that an application to request permanent mail-in voter status can be obtained from the county clerk, or on-line from the secretary of state, and can be returned to the county clerk and recorder of the county or counties in which the district is wholly or partially located;
    • The address of any web site on which the special district’s election results will be posted.

The annual disclosure can be mailed to each individual elector or may be included as a prominent part of a newsletter, annual report, billing statement or other informational mailing. If the district has an official website, which is linked to the Division of Local Government’s website, the annual disclosure information may also be posted on the district's website. Special districts must file a copy of the disclosures with the clerk and recorder of each county in which the district is located as well as with the Division of Local Government. Please contact our office if you would like us to assist your district with preparing its annual disclosure.

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UCIOA Updated

The Colorado Common Interest Ownership Act (CCIOA) is based upon the Uniform Common Interest Ownership Act (UCIOA).  UCIOA was recently adopted by the American Bar Association House of Delegates.  The 2008 Uniform Common Interest Ownership Act attempts to resolve a number of concerns related to the operation and management of common interest communities.  Generally, states that have acts based on uniform statutes will consider modifications once the uniform act is updated.  That may mean that CCIOA could be substantially overhauled in the near future.  In anticipation of that, if you have any specific concerns about CCIOA provisions or there are things you would like to see added to CCIOA please let me know as we hope to be actively involved in any rewrite of CCIOA.

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How To Comply With New Reserve Requirements

HB 1359 was signed by Governor Ritter on May 15. It becomes effective on August 5, 2009 and applies to all common interest communities. So what does your association need to do to comply?

  1. Become educated about the types of reserve studies available and costs. Attend our educational programs on June 4, 2009 to learn more about reserve studies, investment vehicles and funding options. (We currently have a waiting list for these programs.  Click here to add your name to the list.  We may add another session if there is enough interest.) 
  1. Adopt a policy that addresses:
    a. When a reserve study will be done and how often if will be updated. Click here for our Best Practice recommendations
    .

    b. Whether your reserve study will be based on a physical and financial analysis. Click here for our Best Practices recommendations.                                            

    c. Whether the association has a plan for funding the work recommended in the plan and if so, the possible sources including use of regular assessments, special assessments, borrowing, etc.

The policy must be consistent with your governing documents and should be consistent with the association’s responsible governance policy on investment of reserves. We are happy to draft this policy for your association for a flat fee of $295.00.  And, if we prepared your investment of reserve policy, we’ll revise it for free.

3.   Follow your policy.

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HB 1220 Relating to Affordable Housing in Mountain Communities Signed by Governor

On April 22, 2009, Governor Ritter signed House Bill 09-1220.  This bill relates to affordable housing in certain mountain common interest communities.  Specifically, the bill only applies to counties with populations of less than 100,000 and that have a licensed ski lift.  Also, Declarant-controlled communities are exempt from this bill.

The bill adds a new section to the Colorado Common Interest Ownership Act, at Section 38-33.3-106.5.  Essentially, the bill requires associations to permit owners to promote affordable housing through deed restrictions. Under the bill, an association may not prohibit a unit owner from:

(i) restricting the permissible sale price, rental rate, or lease rate of their unit, or

(ii)  subjecting their unit to occupancy or other requirements designed to promote affordable or workforce housing. 

Only the unit owner may occupy a unit that is under a restriction described above.

In addition, a future owner who purchases a unit under a restriction described above may lift the restriction as long as a similar unit in the same common interest community replaces the unit from which the restriction is lifted.

HB 09-1220 takes effect on August 5, 2009.

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HB 1359 Going to Governor for Action

On May 5, 2009, we informed you in a posting on HOA Legi-Slate, that the Senate had just passed an amended version of House Bill 09-1359 ("HB 1359") which cleaned-up some language of the bill that addresses association reserve studies, dissemination of information to board members and qualifications of committee chairs.  Later that day, the Senate amended version of HB 1359 was sent back to the House which voted to concur with the Senate amendments.  That version of the HB 1359 has been sent to Governor Ritter today for action.  We fully expect Governor Ritter to sign HB 1359 into law.  
 
Reserve Studies
As we have addressed in previous postings on HOA Legi-Slate, the most significant portion of HB 1359 addresses the issue of reserve studies.  The original version of the bill, which would have required associations to have reserve studies conducted every three years beginning in 2010, has been amended to now require that associations must adopt a responsible governance policy concerning:  "When the association has a reserve study prepared for the portions of the community maintained, repaired, replaced and improved by the association; whether there is a funding plan for any work recommended by the reserve study and, if so, the projected sources of funding for the work; and whether the reserve study is based on a physical analysis and financial analysis.  For the purposes of this subparagraph (IX), an internally conducted reserve study shall be sufficient."   Unfortunately, this final version of HB 1359 does not clarify whether associations are actually required to have reserve studies conducted. 
 
Assuming HB 1359 is signed into law and a referendum petition is not submitted, this provision of the bill will go into effect on August 5, 2009.  In order to comply with the reserve provision of the HB 1359, associations will need to either amend their current SB 100 policy addressing investment of reserve funds or adopt an additional policy to comply with this provision of the bill.   HindmanSanchez is ready to assist your association with this process.  To learn more about your options send us an email to hoalaw@hindmansanchez.com.    
 
Dissemination of Information to Board Members
As we also discussed when HB 1359 was first introduced, constituent concerns received by Representative Andy Kerr were the impetus behind the inclusion of language in the bill that requires members of association boards to be provided with the information necessary to exercise their fiduciary duties.  That language has been cleaned-up and now provides in part: ". . . all members of the executive board shall have available to them all information related to the responsibilities and operation of the association obtained by any other member of the executive board.  This information shall include, but is not limited to, reports of detailed monthly expenditures, contracts to which the association is a party, and copies of communications, reports, and opinions to and from any member of the executive board or any managing agent, attorney, or accountant employed or engaged by the executive board to whom the executive board delegates responsibilities under this article."  Whether this provision of HB 1359 has the potential of interfering with the attorney-client privilege, is subject to debate.
 
Assuming HB 1359 is signed into law and a referendum petition is not submitted, this provision of the bill will go into effect on August 5, 2009.
 
Qualifications for Committee Chairs
The final provision of HB 1359 addresses the qualifications of committee chairs.  Working under the assumption that this bill will be signed into law, any committee chair appointed after August 15, 2009, "shall meet the same qualifications as are required by the governing documents of the association for election or appointment to the executive board of the association."  It's important to point out that this provision applies only to an individual appointed to preside over a committee of their association.  It does not require that other individuals appointed to participate on a committee of their association be eligible to be appointed to or run for a position on the board.
 
We will update you when Governor Ritter signs HB 1359 into law.  We will also be providing a legislative update on this, and other bills passed during the 2009 legislative session, to managers and board members on August 19, 2009.  To register to attend a legislative update session click here.

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Amended Version of HB 1359 Passed by Senate

Today, May 5, 2009, one day before the Colorado General Assembly is slated to adjourn for the session, the Senate passed an amended version of House Bill 09-1359 (HB 1359) which addresses association reserve studies, dissemination of information to members of boards and qualifications of committee chairs. 

The primary amendment passed by the Senate, cleaned-up some of the language addressing reserve studies.  However, the amendment did not clarify whether associations are actually required to have reserve studies conducted - which is our biggest concern with HB 1359.  The Senate version of the bill, which will likely be adopted by the House, provides that associations must adopt a responsible governance policy concerning:  "When the association has a reserve study prepared for the portions of the community maintained, repaired, replaced, and improved by the association; whether there is a funding plan for any work recommended by the reserve study and, if so, the projected sources of funding for the work; and whether the reserve study is based on a physical analysis and financial analysis.  For the purposes of this subparagraph (IX), an internally conducted reserve study shall be sufficient." 
 
The other amendment passed by the Senate provides that any person appointed "after August 15, 2009" to chair a committee of an association must meet the qualifications required by the governing documents of the association to run for, or be appointed to, a position on the association's board.  
 
The bill will now go back to the House for concurrence.  The House is expected to act on HB 1359 before the General Assembly adjourns for this legislative session.
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U.S. Senate Votes Down Foreclosure Relief Measure

The U.S. Senate voted 51-45 earlier today against the legislation that would have allowed bankruptcy judges to rewrite mortgage terms for struggling borrowers before they face foreclosure -- the so-called mortgage "cram-down" bill.  CAI National and the College of Community Association Lawyers were actively involved in educating legislators about the potential impact of the legislation on associations through out the nation.

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Amended Version of HB 1359 - Clears the House

On Monday, April 27, 2009, the House passed an amended version of House Bill 09-1359 ("HB 1359").  This legislation, introduced by Representative Andy Kerr, was granted late bill status and is speeding through the legislative process.  As you know, this legislation addresses reserve studies, information disseminated to members of boards of associations and who is eligible to be appointed as a committee chair.  Late last week, representatives of the homebuilders got involved in the legislation which led in part to "friendly amendments" that were passed last week on the floor of the House.   

The most significant of these amendments was a change to the reserve study section of the original bill which now requires, as amended, that associations adopt a responsible governance policy concerning "When the association has a reserve study prepared for the portions of the community maintained, repaired, replaced, and improved by the association and whether there is a funding plan, projected sources of funding, and whether the reserve study is based on a physical analysis and financial analysis.  For the purposes of sub-paragraph (IX), an internally conducted reserve study shall be sufficient." 
 
Whether or not you believe reserve studies should be required for associations, our concern with this language is that it is vague and does not clearly indicate whether associations must actually have a reserve study.  In our opinion, the language "when the association has a reserve study prepared" could be interpreted to imply that associations are required to have reserve studies conducted or it could be interpreted to say that associations can adopt a policy that they will never conduct a reserve study.  If the intent of the original bill was to ensure that associations take the steps necessary to plan for future repair and replacement obligations of the association, we do not believe this amended provision of HB 1359 provides that level of protection.
 
In addition to some other basic clean-up of the original bill, the version - as passed by the House - also provides that the provisions of HB 1359 will apply to pre-CCIOA communities.
 
HB 1359 will now be sent to the Senate for action.  We will continue to provide you with updates on the bill as it proceeds through the legislative process.
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HB 1359 Picking Up Speed

One day after being introduced, House Bill 09-1359 (HB 1359) has cleared the first hurdle on the journey to final passage and is picking up speed.  Yesterday evening, the House Committee on Local Government referred HB 1359 unamended to the House for consideration.  Since the Colorado General Assembly is currently scheduled to adjourn on May 6, 2009, we expect this bill to be taken up quickly by the House. 

As reported in our April 21st posting, this is the most significant bill introduced during this legislative session directed at homeowners associations.  The bill, as currently written, addresses the issues of reserve studies, appointment of committee chairs, and dissemination of information to board members.  To learn more about these provisions, we invite you to review our April 21st posting
 
We will continue to provide you with updates on HB 1359 as they become available. 

 

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Significant Bill for Homeowners Associations Introduced by Representative Kerr

On Monday, April 20, 2009, Representative Andy Kerr introduced House Bill 09-1359 ("HB 1359") titled "Concerning the Governance of Common Interest Communities Under the Colorado Common Interest Ownership Act."  HB 1359 was granted late bill status and is the result of lengthy negotiations between interested parties.  The legislation has been assigned to the House Local Government Committee and is schedule for hearing today.  Since the legislature is slated to adjourn on May 6, 2009, this bill is expected to proceed quickly through the legislative process with very little opportunity for revision.    

HB 1359 is the most significant bill to be introduced during this legislative session for homeowners associations and as currently written would require the following:
 
Reserve Studies:  As of July 1, 2010, at least once every three years, associations will be required to perform a reserve study "of the common elements and, based upon the reserve study, shall create or update a funding plan for repair or replacement of the association's reserve assets."  The reserve study must consist of a physical and financial analysis and contain a description of how each analysis was conducted.  HB 1359 also requires the funding plan to include a list of all projected costs and outline what percentage of the costs will be funded through regular assessments, special assessments or other funding methods.  There is nothing currently in the bill that requires the reserve studies be conducted by a reserve study professional.
 
There is a great deal of debate in the association community regarding whether associations should be required to have reserve studies conducted and to what extent associations should be required to fund reserves - if at all.  Many state statutes currently require that associations have reserve studies conducted and updated on a routine basis.  Some states also require association reserves be "adequately funded."  However "adequate funding" has not been defined by statute in those states and association professionals working in those jurisdictions will tell you the definition is unclear.
  
Tell us what you think about the reserve study provision of HB 1359 by clicking on "Comments" at the end of this posting.
 
Appointment of Committee Chairs:  HB 1359 currently requires that committee chairs be individuals eligible to run for or be appointed to a position on the board of an association as outlined in the association's governing documents.
 
Information Necessary to Carry Out Fiduciary Duty:  This provision of the legislation requires that board members shall have available to them "all relevant information related to the association's operation." This information includes, but is not limited to, the following:
 
1.  Reports of detailed monthly expenditures;
2.  Contracts to which the association is a party;
3.  Copies of communications, reports, and opinions to and from "officers" of the association.
 
"Officers" are defined in the bill as "any person designated as an officer of the associaton and any person to whom the executive board delegates responsibilities under this article, including, without limitation, a managing agent, attorney, or accountant employed by the executive board."
 
As noted above, this bill is expected to proceed extremely quickly through the legislative process.  We will provide you with updates on the status of HB 1359 as they become available.
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What Does the Carbon Monoxide Detector Bill Mean for Community Associations?

On March 24, 2009, Governor Ritter signed into law HB 1091. This bill was introduced in response to the tragic deaths of the Lofgren family resulting from carbon monoxide poisoning.  As discussed in our January 14, 2009, and March 24, 2009 postings on HOA Legi-Slate, HB 1091 is a new law that outlines requirements for the installation and placement of carbon monoxide detectors in any single family dwelling or unit in a multi-family dwelling offered for sale or transfer.  The law goes into effect on July 1, 2009. 

 

What does this mean for community associations? In general, community associations are not directly impacted by the bill unless the association owns a lot or unit, as the bill requires the seller to install carbon monoxide detectors if offering a unit for sale/transfer. Associations may, however, be impacted post-installation. If the device is installed on the common elements, for example, most declarations require the condominium association to be responsible for maintaining, repairing and replacing the common elements and any improvements thereon, which would include the carbon monoxide detector. If, on the other hand, the device is installed on the unit, most likely the owner would be responsible for maintaining and inspecting the device. 


Although the law does not go into effect until July 1, 2009, associations should be proactive in both educating the membership of the new law and being prepared for its potential impact on maintenance obligations.  We recommend including a brief article in your next newsletter notifying the members of HB 1091 and providing resources for information and clarification, such as a link to HOA Legi-Slate.  We also recommend adopting a policy that clarifies the owner vs. association obligations over the devices. 
For condominium and townhome associations in particular, the policy should clarify the boundaries of the unit, so it will be clear which portions of the detectors (if any) will lie on the common elements vs. the unit, and the associated maintenance obligations. With any type of community, the policy should make it clear that it is the owner's, and not the association's, responsibility to install the device. 

Please contact HindmanSanchez if you wish to have our assistance in drafting a carbon monoxide detector policy.  Because the law's impact will depend on the type of community, prices will vary.  We can draft a condominium policy for $395, a townhome policy for $225, and a single family home policy for $175.

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"Cram Down" Bill Requires Modification to be Effective

Give a person a fish and they will eat for a day.  Teach that person how to fish, and they will eat for a lifetime.  If the purpose of the mortgage “cram down” provision of the Helping Families Save Their Homes Act of 2009 is to help people keep their homes and stabilize the housing market, then lawmakers must be sure that the help and stabilization provided is more than a temporary fix.  Any legislated adjustment of monthly payments must take into account maintenance and other associated costs inherent in the privilege of home ownership.  Those motivated to keep their homes and who benefit from the Act should likewise have a sense of duty to maintain and increase the value of their rescued asset.  This means upkeep, upgrades, and contributing to the value of the community as a whole.  If the house is located within a homeowner’s association, this means the payment of association dues.  Lawmakers: if you want the fix to be permanent, do not forget the duties that go hand in hand with privilege or your efforts will be for naught.  Allow for the adjustment of payments to a level that, when other necessary fees, costs and assessments are added thereto, the payment is still fixed at an amount affordable to the homeowner being assisted.

The Bill has been passed in the House of Representatives and has stalled in the Senate. Indications are that the Bill will not be put to a vote until at least after the Easter break. Passage of the Bill in the Senate is far from a given.  At least 60 affirmative votes will be needed to avoid a filibuster attempt by opponents.  In the long run, unless significant alterations are made to the Bill to protect the interest of community associations, its defeat may be the best result.

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Legislature Introduces Bill to Clarify Pre-Judgement Interest

Last year the Colorado Supreme Court ruled that Pre-Judgment Interest in construction defect actions is only payable from the time the plaintiff was deprived of the money or value of a property.  This ruling put into doubt at what point pre-judgment interest is calculated in Construction Defect Actions involving associations.  In an effort to clarify this issue, the Senate introduced "The Homeowners Protection Act of 2009" also known as SB 09-246.  The legislative intent of this bill is to "Require the award of interest to be paid as damages for a delay in performing an obligation, on construction defect claims, to encourage speedy resolution of claims, discourage meritorious claim payment delays, reduce the need for lengthy and costly construction defect lawsuits and trials".  In short, this bill will enable associations to recover prejudgment interest during the notice of claim and lawsuit process. The Senate has scheduled a hearing on this bill on April 1, 2009 at 1:30 PM.  You are encouraged to attend and support the Homeowners Protection Act of 2009.  You can also contact your state representative and senator to support SB 09-246.  Representative and Senate contact information can be found by clicking here.

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HB 1091 Sent to Governor for Signature

On March 19, 2009, House Bill 09-1091 ("HB 1091") was sent to Governor Ritter for signature.  As discussed in the January 14, 2009 posting on HOA Legi-Slate, HB 1091 was introduced in response to the tragic deaths of the Lofgren family resulting from carbon monoxide poisoning.  HB 1091, as sent to the Governor, outlines in part requirements for the installation and placement of carbon monoxide detectors as follows:

  1. Any single family dwelling or unit in a multi-family dwelling offered for sale or transfer on or after July 1, 2009, will be required to have carbon monoxide detectors installed if the unit has a fuel-burning heater or appliance, a fireplace or attached garage;  
  2. Rental units, with fuel-fired appliances or attached garages, that are altered, repaired or fuel-fired appliances are replaced on or after July 1, 2009, must be equipped with operational carbon monoxide detectors and landlords will be required to provide maintenance and replacement of the detectors when notified by tenants of such a need.
  3. Rental units, with fuel-fired appliances or attached garages, with a change of occupancy on or after July 1, 2009, must be equipped with operational carbon monoxide detectors and landlords will be required to provide maintenance and replacement of the detectors when notified by tenants of such a need. 

The bill also outlines the types of carbon monoxide detectors that may be installed, the locations required for installation and the responsibilities of tenants in rental units. 

The Governor is expected to sign HB 1091 into law as early as today.

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Bill Introduced to Expand Provisions of CCIOA to Small Common Interest Communities

On March 16, 2009, Senators Josh Penry and Morgan Carroll introduced Senate Bill 09-249 ("SB 249") which would extend application of certain provisions of the Colorado Common Interest Ownership Act ("CCIOA") to small common interest communities that are currently exempt from complying with the provisions.  Representative Andy Kerr is the sponsor of the bill in the House. If enacted, SB 249 will require currently exempted small common interest communities to comply with provisions of CCIOA that pertain to:

  • The display of American flags, service flags and political signs;
  • Parking of emergency vehicles by residents employed as first responders;
  • Trimming of vegetation for fire defense purposes;
  • Modifications required for accessibility for a resident with disabilities; and
  • Specified energy efficiency improvements.
Unless a community's declaration provides otherwise, small common interest communities that are currently exempt from complying with these provisions of CCIOA include: 
  • Cooperatives created on or after July 1, 1992, but prior to July 1, 1998, that contain only units restricted to non-residential use or contain no more than ten units and is not subject to developer rights.
  • Planned Communities created on or after July 1, 1992, but prior to July 1, 1998, that contain no more than ten units, are not subject to developer rights, or if the planned community, in its declaration, provides that the annual average common expense liability of each residential unit may not exceed $300.00.
  • Any Cooperative or Planned Community created after July 1, 1998, that contains only nonresidential units or contains no more than 20 units and is not subject to any development rights. 
  • Any Planned Community created after July 1, 1998 that provides, in its declaration, that the annual average common expense liability for residential units shall not exceed $400.00 as adjusted by the Denver-Boulder consolidated metropolitan area consumer price index.  
While on its face it seems reasonable that every common interest community in Colorado should comply with the provisions of CCIOA outlined above, there is some concern that this bill may create a trend to require small common interest communities to comply with other provisions of CCIOA in the future.  These are the common interest communities that the drafters of CCIOA specifically intended to exempt due to monetary and governance constraints. 
 
We will monitor SB 249 and provide you with updates as they become available.

 

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Associations With Employee and Management Companies BEWARE!

EFFECTIVE MARCH 1, 2009,  if you provide health coverage to your employees, you likely have pressing obligations under the American Recovery and Reinvestment Act of 2009 a/k/a the "stimulus bill." 

Bottom line, if you have terminated any employees  since September 1, 2008, you will need to provide a notice to those employees and you will likely have to provide a reimbursable COBRA/health benefits continuation subsidy to those employees.

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Fannie Mae Issues Another Temporary Halt to Foreclosures and Evictions

With the anticipated announcement by the Obama Administration of a foreclosure prevention and loan modification program, Fannie Mae has instituted another temporary halt to all foreclosure sales on occupied single-family properties scheduled to occur from February 17, 2009 through March 6, 2009.  Fannie Mae is also extending its temporary halt of all eviction proceedings through March 6, 2009.

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Burn-Out Cigarettes Soon to be Law in Colorado

Effective July 31, 2009, cigarettes sold in the State of Colorado will have to meet certain reduced ignition propensity standards, pursuant to legislation passed by the Colorado legislature last year. Numerous other states have similar laws. 

Although not readily apparent from the statute, reduced ignition propensity cigarettes are designed to self-extinguish before their entire length burns if they are not puffed on for an extended period of time. In order to meet the standards, most manufacturers use bands of different paper to create “speed bumps”, so when left unattended, the cigarettes will burn out when they hit one of the “speed bumps.”   

The hope is that mandating these cigarettes will result in a reduction of fires, as well as fire-related injuries, deaths, and damages, from unattended or discarded cigarettes. While primarily fueled by second-hand smoke and nuisance issues, some communities have sought to make their communities smoke-free by amending their declaration to prohibit smoking. Even though burn-out cigarettes will not eliminate second-hand smoke issues, having an avenue to reduce the risk of fire, without having to regulate residents’ behavior, is good news for condominium or townhome communities where residents share common walls.

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Will New Foreclosure Deferment Bill Hurt Or Help Associations?

HB1276 requires lenders to defer foreclosures that have been initiated for 90 days if it is determined that a borrower is eligible for a loan deferment.  We can debate whether this is a good policy decision or not but I am more concerned about the impact on associations.  Under this proposed law, if an owner is "eligible for a loan deferment" a foreclosure would be deferred for 90 days so instead of the sale occurring within 120 days of the initiation of the foreclosure action it will now be 210 days or 7 months, at a minimum.  The likely result will be that the association's super lien no longer (if it every did) provides protection for the association and the assessments not paid after foreclosure.  I would encourage you to contact your representatives and voice your opinion on this bill.  If you're not sure who represents you click here and enter your zip code to find your representatives.

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Foreclosure Cleanup Bill Likely In 2009

The 2009 Colorado Legislative is already under way and bills are being introduced daily.  It is our understanding that we will likely see a foreclosure cleanup bill introduced.  We will keep you up-to-date on this as well as other proposed legislation that may have an affect on community associations.  With the state of the economy, this legislative session may be very interesting!

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Carbon Monoxide Detector Bill Introduced in 2009 General Assembly

HB 09-1091 was just introduced in the Colorado General Assembly and by all accounts is on the fast track to passage.  As a result of the tragic deaths of the Lofgren family due to carbon monoxide poisoning, this legislation - as introduced - would mandate in part that:

  1. Any single family dwelling or unit in a multi-family dwelling offered for sale or transfer on or after July 1, 2009, would be required to have carbon monoxide detectors if the unit has a fuel-burning heater or appliance, a fireplace or attached garage;
     
  2. Any new construction of a single family dwelling or unit in a multi-family dwelling in which building permits are issued on or after July 1, 2009, would be required to have carbon monoxide detectors if the unit has a fuel-burning heater or appliance, a fireplace or attached garage;
     
  3. Rental units must be equipped with carbon monoxide detectors and landlords would be required to provide maintenance and replacement of the detectors when notified by tenants of such a need.
Upon passage, HB 1091 will directly impact developers of single-family and multi-family communities.  Further, depending upon the requirements of governing documents, condominium and some townhome associations may also be required to ensure the installation of carbon monoxide detectors in units.
 
We will continue to monitor HB 1091 and will provide you with updates on the bill as it proceeds through the legislative process. 
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Looking for Data to Support Going Smoke-Free in Your Association?

In two recent studies released by the Oregon Public Health Division earlier this month, it was reported that 3/4 of all residents in an apartment building that had recently gone smoke-free were happy or very happy with the no-smoking rule and even among smokers, 30% felt the same way. In addition, a survey of all renters in Oregon indicated that 70% would choose a smokefree rental, "other things being equal."  

GASP of Colorado might also be able to provide additional information.
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Is Reserve Legislation Next in Colorado?

We are all aware that what happens on the west coast and east coast eventually makes it way to Colorado. Another example may be legislation regarding reserve studies and reserve funding.  On June 12, 2008, all residential condominium associations in Washington will be required to have a reserve study, update it annually and have a visual inspection of the community every three years by a reserve study professional.  While the new law does not REQUIRE a reserve account it does encourage it and makes it mandatory that associations disclose, as a part of sales, the reserve study and whether a reserve account exists.
 
Washington joins only 5 other states with statutory requirements related to reserves.  This new law, reports the Seattle Times, will uncover “the dirty little secret of the condo world -- that most condos are severely under funded.”  Legislators who supported the bill contend that oversight was necessary as the only relief has been litigation against association management companies and anyone connected with the purchase of a condominium.
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HUD Releases New Guidelines Related to Reasonable Modifications

Earlier this week HUD and the Department of Justice released new guidelines related to the rights of persons with disabilities to make reasonable modifications to units and common elements. The new guidelines are in the form of questions and answers and address such issues as whether an association can require a specific contractor, or special liability insurance.  A copy can be found here or at this link on the HUD website. 

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Collection Policy - A Must Have for Associations

Colorado Statute mandates the adoption of Responsible Governance Policy with respect to the collection of unpaid assessments. Setting aside that fact that it is required by law, a collection policy is important because it helps homeowners in the association understand the consequences of nonpayment of their assessments. Declarations can be lengthy and sometimes confusing documents for owners to read. However, collection policies should be written in language that is easy to understand. A collection policy promotes openness between the board of directors and the homeowners and makes the intentions of the association clear with respect to collection of unpaid assessments. It also aids in facilitating equal treatment of all delinquent owners.  Click here to view a sample collection policy.

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The Debate About Requiring Reserve Funds

An association that maintains adequate reserves will find itself in the enviable position of having the funds necessary to cover the unenviable (and usually eventually unavoidable) costs of undertaking major maintenance and replacements of the community's common elements. Three potentially unappealing options face associations who haven't planned ahead by adequately reserving: 1) do nothing and allow the situation to deteriorate further, decreasing property values; 2) impose a special assessment; or 3) attempt to secure a loan, which will need repayment eventually. Even before a common element needs replacement, a lack of adequate reserve funds can hurt the ability of prospective buyers to obtain financing. In addition, some insurance companies have expressed reservations about renewing the master insurance policies of associations with underfunded reserves.

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Owners' Right to Inspect and Copy Association Records

We often hear stories of well-meaning association boards that make the decision to withhold due to "privacy concerns" certain association records from an owner requesting them. The decisions to withhold certain association records are explained along the lines that it would be an invasion of privacy:

  • to release the names and addresses of other association members;
  • to provide a list of owners delinquent in their assessments;
  • to let an owner inspect covenant complaints filed by or against other owners, etc.

However, none of the above reasons are valid ones for refusing an owner request to inspect and copy such association records.

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The Award of Attorney Fees in The Post SB 100 & SB 89 Courtroom

As discussed in this post, Colorado does not have a state regulatory or enforcement agency to monitor association compliance with CCIOA. Much of CCIOA's enforcement power comes from section 38-33.3-123, which provides for the mandatory award of attorney fees to the prevailing party in actions to enforce its provisions. We have heard concerns that SB 100 and SB 89 broadened the types of actions for which attorney fees are awarded. This understandable concern is actually unfounded.

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Sample ADR Policies Posted on HindmanSanchez Website

Signed into law on May 26th, SB 89 requires associations to adopt a written procedure by January 1, 2007, concerning how disputes between owners and the association are addressed. To assist you in complying with this requirement, we have posted three different ADR policies for your use. Click here to access these policies.

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Handling Seller Authorizations To Disclose Association Documents To Buyers

As discussed in this post, current law requires a seller, on the request of the buyer, to disclose the association's governing and financial documents listed in the most recent available version of the Colorado Real Estate Commission's sales contract. Sellers may do this by providing the required documents themselves (whether they deliver personally or through their real estate agent) or by authorizing their association to provide them to the buyer. (Although the statute speaks only to sellers authorizing their associations to disclose the documents, practically speaking, it is likely that these requests may come from sellers' real estate agents.) Chances are sellers within your community will be - or already have begun - authorizing your association to disclose these documents to the buyer. Does your association have a system in place to honor these requests efficiently and in a manner that protects association interests?

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Charging For Association Documents In Response To Seller Requests

SB 89 amended the disclosures that sellers of residential property located in a common interest community are required to make. These required disclosures are addressed outside of the Colorado Common Interest Ownership Act ("CCIOA") in section 38-35.7-102 of Colorado's statutes. This post addresses what associations may charge for providing association documents to either the seller or, at the seller's authorization, to the buyer in conjunction with the sale of a unit within a common interest community.

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SB 89 Signed By Governor This Afternoon

With Governor Owens's signature, Senate Bill 89, the "SB 100 Clean-up Bill," is now law. SB 89 addresses many parts of SB 100 that needed clarification due to ambiguous or conflicting language. In addition, SB 89 modifies some of the requirements implemented by SB 100 that failed to consider the actual manner in which associations operate or had unintended consequences. With the exception of two provisions (the adoption of a dispute resolution policy and a portion of the seller disclosure section), SB 89 is effective on the Governor's signature, May 26, 2006. (Click here for a copy of the new law.)

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Colorado's Foreclosure Rate Still #1 In Nation

As reported last month in this post, Colorado led the nation in foreclosures for the month of March. This Rocky Mountain News article reports that, unfortunately, Colorado has retained this spot for the month of April. As discussed in this post, a bill is before the Governor that proposes several changes to Colorado's foreclosure laws. It is hoped that several of these changes will help owners to keep their homes. It will be interesting to see how this proposed foreclosure bill may affect Colorado's foreclosure numbers if signed into law.

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Proposed Changes To Colorado's Foreclosure Statute

House Bill 06-1387, which passed its third reading in the Senate on May 3, 2006, but which has not yet been signed into law, contains numerous proposed revisions to Colorado's foreclosure laws (C.R.S. § 38-38-101, et seq.). The bill is now on its way to the Governor for consideration. The intent of the bill is to modernize and simplify the process of foreclosures within Colorado, while also providing owners with a more realistic opportunity to retain ownership of their property. The most significant change to the bill as it relates to community associations is the expansion of the time in which to cure and the elimination of the owner's right to redeem.

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The Colorado Clean Indoor Air Act: Its Impact on HOAs and How To Comply

Governor Owens signed HB 06-1175, the 'Colorado Clean Indoor Act', into law on March 27th. HB 1175, sponsored by Representative May and Senator Grossman, institutes a state-wide ban on smoking in almost all public establishments. (The new law exempts cigar bars, casinos, and DIA's smoking lounge.) Effective on July 1, it is not only restaurants and bars that must go smoke-free - condominium, loft, and townhome residents will also need to think twice before lighting up a cigarette.

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Colorado Legislature Wraps Up Its 2006 Session

The Denver Post reports that the Colorado lawmakers finished the four month session late Monday night. SB 89 took almost the entire four months to travel through the legislature, but is now on the way to Governor Owens. (Click here for the version, although not yet in the final format, that Governor Owens will consider.) Unlike the Florida legislature, SB 89 was the lone bill dedicated solely to HOAs and, if passed, will bring welcome clean-up amendments to SB 100. (The status of the other bills introduced that will have impact on HOAs will be summarized in upcoming post.)

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SB 89 Conference Committee Expected To Be Dissolved

As discussed in this post, a conference committee had been requested to address some outstanding issues remaining in SB 89. However, it appears that these issues have been resolved without the need to amend the bill further. It is expected that the conference committee will be dissolved and the Senate to concur with the House amendments at some time today. At this point, the bill will be sent to Governor Owens for consideration.

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SB 89 Heads To Conference Committee

This morning, Senator Hagedorn requested that SB 89 be sent to conference committee. (A conference committee is made up of members from both houses, who try to work out outstanding issues left in the bill that were not resolved in committee or by a floor amendment.) He cited the reason for his request as issues brought up by Colorado Ski Country USA, the trade association for Colorado's ski resorts, and the National Association of Industrial and Office Properties ("NAIOP").

We understand these issues concern the amendments made in the House to section 38-33.3-217 as it was amended in the Senate. The Senate version of this provision would have exempted declarant-controlled, phased communities, and mixed-use communities from the 67% cap on the percentage of affirmative votes that may be required to amend an association declaration. Representative Carroll was concerned that these proposed exemptions were too broad and put a lot of effort into compromising with the interested parties. Currently, Section 217 proposes to exempt both declarant and phased-communities. (A phased community is defined as a community in which the developer retains development rights.) It is our understanding that she remains opposed to reverting back to the Senate version of the section.

We'll update you on the conference committee events as they transpire.

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SB 89 Passes Its Third Reading In The House

Late yesterday afternoon, SB 89 passed its final reading in the House with a 64-1 vote. (The no vote came from Representative McCluskey). SB 89 will now return to the Senate where the Senate will either accept the House amendments or call for a conference committee to reconcile the two versions. We expect this to happen in the next few days. Click here for the most current version of SB 89. (This is the "rerevised" version, which contains all the amendments adopted by the House.)

Both this post and this post discuss the contents of the rerevised SB 89.

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SB 89 Passes Second Reading In House

SB 89 passed its second reading in the Colorado House of Representatives this afternoon. In addition to the Local Government Committee report (discussed here), Representative Carroll introduced two floor amendments, both of which were adopted.

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Larimer County Republican Party Passes Resolution on HOAs

The Larimer County Republican Party passed a resolution concerning HOAs earlier this month. Resolution #24 begins by declaring that HOAs impact the property values, property and personal rights, as well as the living environment of those living within the HOA community. It goes on to state that many HOAs have abused their authority and have failed to follow the law or meet their fiduciary duties. The Resolution then urges the Colorado legislature to make HOAs legally accountable to their members by allowing members to take pro se legal action against their association to recover damages, remove board members etc. (This resolution, however, is suggesting legislation to the General Assembly and does not change current state law.)

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House Bill Giving Childhood Sex Abuse Victims More Time To Sue Passes In The Senate

HB 1090, discussed in this Denver Post article and this post, passed its third reading in the Senate today. HB 1090 would allow victims of childhood sex abuse more time to file lawsuits against private institutions that knew or were on notice of the "propensity of an employee, volunteer, representative, agent, or subordinate of the employer" for engaging in unlawful sexual conduct and who failed to take reasonable steps or institute reasonable safeguards to prevent any such conduct.

The Governor has not given any indication as to whether he will sign or veto the bill. If the bill passes, we will be providing guidance on how to safeguard your association from these types of claims.

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Bill Will Require Seller Disclosure Of Past Use of Property As Methamphetamine Laboratory

SB 06-02, entitled 'Concerning Mandatory Disclosure In Connection With The Purchase Of Residential Real Property Of Whether The Property Has Been Used As A Methamphetamine Laboratory,' is sponsored by Senator Shaffer and Representative Pommer. The bill, which is on its way to the Governor, addresses the health harms caused by the lingering chemicals left after other discernable signs of methamphetamine production have been cleaned up.

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Unofficial Preamended Version of SB 89 Available

Click here to view the unofficial preamended version of SB 89, which has been posted on the General Assembly website. This version includes all the Local Government committee amendments that were approved at the hearing on April 11, but have not yet been adopted by the whole House of Representatives on Second Reading. We expect that Second Reading will take place by the end of this week. Click here for the blog post that summarizes these amendments.

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TELL YOUR REPRESENTATIVE - I SUPPORT SB 89 AND OPPOSE THE 'CARVE OUT' AMENDMENT ADOPTED IN COMMITTEE!

SB 89 will have its second reading next week. While the bill as a whole will benefit owners and associations by cleaning up and clarifying portions of SB 05-100, a hostile amendment was secured during the Local Government Committee hearing. This amendment would allow planned communities, regardless of their size or date of creation, to amend their declarations to exempt out of CCIOA. (Click here for more details.)

Please contact your representative by Monday, April 17 to request his or her support for SB 89 and to oppose the hostile 'carve out' amendment adopted in committee. You can find your representative by visiting Project Vote-Smart and entering your nine-digit zip code.

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SB 185 Postponed Indefinitely, But Rears Its Ugly Head In Amendment to SB 89

At the House Local Government hearing on Tuesday, April 11, Representative Liston, the House sponsor of SB 185, requested that the bill be postponed indefinitely. (SB 185 proposed to extend the CCIOA exemption for small and limited expense planned communities created after July 1, 1998 to all small and limited expense communities. Our objections to this proposal are discussed in this post.) The Committee then voted to postpone the bill indefinitely, which has the same effect as killing a bill. Unfortunately, the demise of SB 185 is not the end of the story due to an amendment added at the last minute to SB 89 by SB 185's proponents. (Click here to view amendment.)

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Senator Fitz-Gerald States Intention to Kill SB 143 And Looks Towards Amending HB 1090

SB 143 - which would have allowed victims of childhood sex abuse to sue private institutions on vicarious liability claims - has generated much controversy as reported in this Denver Post article. (SB 143 is discussed in this post.) In response, Senator Fitz-Gerald has decided to add the key provisions contained in SB 143 into HB 1090, which also addresses sex offenses, including those committed against children. (HB 1090 has not escaped controversy either as related in this Denver Post article.) The unofficial preamended version of HB 1090 is available here. (This version includes the Senate committee amendments that have not yet been adopted by the entire Senate on Second Reading.)

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Amended SB 89 Passes Out of the House Local Government Committee By A 9-2 Vote

Yesterday afternoon, the House Local Government heard SB 89. At the committee hearing, Representative Carroll introduced a strike below amendment for the Committee's consideration. (Instead of introducing amendments one by one, a strike below amendment strikes everything below the enacting clause, replacing it with the language of the strike below amendment.)

The strike below incorporates much of the reengrossed version of SB 89. Here is a break down on the pertinent provisions contained in the strike below (I have italicized the portions of the amendment that differ from the reengrossed version):

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SB 143 Addresses Vicarious Liability for Sex Offenses

SB 143, 'Concerning The Statute of Limitations for Civil Actions Alleging Unlawful Sexual Conduct,' is sponsored by Senator Fitz-Gerald and Representative Madden. This bill seeks to provide further protections to child victims of sexual abuse, including holding institutions accountable for preventing sexual abuse.

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SB 89 Hearing Moved To April 11

The House Local Government Committee hearing on SB 89 has been moved to Tuesday, April 11. The Local Government Committee meetings begin at 1:30 p.m. We'll keep you posted as developments arise. (SB 89 is discussed in detail in this post.)

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House Local Government Committee Scheduled To Hear SB 89 and SB 185 On Tuesday, April 4.

SB 89 and SB 185 are scheduled to be heard by the House Local Government Committee on Tuesday, April 4. (The provisions of SB 89 are discussed here, and SB 185 is covered in this post.) The Committee meeting begins at 1:30 p.m. in House Hearing Room 0112. (A list of Committee members is available in this post.) SB 89 and SB 185 are fourth and fifth on the agenda, but bills may always be heard out of order. The House calendar provides that any bills not heard or completed on April 4th will be scheduled to be heard and completed on Friday, April 7th, time to be determined if such a meeting becomes necessary. We'll keep you posted on any developments.

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Charging for Association Documents In The Post-SB 100 World.

We have received a lot of questions concerning what documents associations may charge for in the post-SB 100 world. The answer to this question lies in why the documents are being furnished or copied. The following bullet points list the most common situations in which associations furnish or copy records for their owners.

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SB 89 To Be Heard Another Day

Originally set to be heard March 21 by the House Local Government Committee, SB 89 was taken off the calendar to be heard another day. As of today, the bill has not yet been re-scheduled. However, the committee will not be meeting next Tuesday, March 28th, so the earliest SB 89 will be heard will be Tuesday, April 4. We'll keep you posted as to when SB 89 finds its way back on the calendar.

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Representative Stengel Replaces Representative May on the House Local Government Committee.

On March 2, Representative Stengel, facing an ethics investigation over his off-session pay, stepped down from his position as house minority leader. Following Representative Stengel's resignation from the position, Republicans elected Representative May as their new house minority leader. House Minority Leader May has taken himself off the House Local Government Committee and has appointed Representative Stengel to take his place. Click here for an updated list of the members of the House Local Government Committee.

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House Local Government Committee to Hear SB 185

SB 185 (discussed in this post) will be heard by the House Local Government Committee on March 21, which meets at 1:30 p.m. (Click here for a copy of the bill.) SB 185 was introduced in the House on March 1 by its House sponsor, Representative Larry G. Liston. (Click here for a list of the members of the Local Governement Committee.)

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House Local Government Committee to Hear SB 89

The House Local Government Committee hearing on SB 89 is scheduled for Tuesday, March 21 at 1:30 p.m. Click here for a list of the members of the Local Government Committee.

Interested citizens may testify to their views on the current version of SB 89 at this hearing. (Click here for tips on testifying in front of committee.) Like the Senate Judiciary Committee, during this hearing, the Committee will examine the details of SB 89 and determine what action to take on the bill.

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SB 89 Introduced In The House

SB 89 has now been introduced in the House and has been assigned to the Local Government Committee. As of today, it has not yet been calendared for a hearing, but we'll let you know when it is scheduled.

The 11 members of the Local Government committee are as follows:

Representative Mary Hodge (Chairman) (D)
Phone:
mary.hodge.house@state.co.us

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