HOA Legi-Slate

On January 15, 2008, Representative Morgan Carroll introduced House Bill 08-1135 aimed at addressing issues relating to common interest communities in Colorado. In particular, Representative Carroll's bill provides the following:

1. It references in the Colorado Common Interest Ownership Act ("CCIOA") the provision of the Federal Fair Housing Act which provides that homeowners associations shall not prohibit "reasonable modifications to a unit as necessary to afford a person with disabilities full use and enjoyment of the unit."
While including a reference to the Federal Fair Housing Act in CCIOA is not necessary from a legal perspective, we don't have any problem with it being referenced in CCIOA for informational and educational purposes. 

2. Homeowners associations are prohibited from levying a fine against a unit owner for a violation of a covenant or rule unless:

    A. The association has adopted a written policy governing the imposition of fines. (This is currently a required policy under Colorado law.)

    B. The policy includes notice and the right to a hearing before an "Impartial Decision Maker" prior to a fine being levied. An "Impartial Decision Maker" is defined as "a person or group of persons who have the authority to make a decision and do not have any direct personal or financial interest in the outcome."

    C. If the Impartial Decision Maker determines the unit owner did not violate the covenant or rule, the Association may not assess against the unit owner's account any of the costs or attorneys fees incurred in asserting or hearing the claim.
These provisions seem consistent with the requirement currently in Colorado law that homeowners associations must have a responsible governance policy that addresses enforcement of covenants and rules, including notice and hearing procedures and the schedule of fines. While we have some concern that homeowners may misinterpret the definition of "Impartial Decision Maker" - if this bill is passed, we will continue to advise our clients to comply with the policy of their associations governing enforcement of covenants and rules.   

3. Endorses and encourages associations, unit owners, managers, declarants and all potential parties to disputes relating to common interest communities to utilize public and private resources for alternative dispute resolution to resolve disputes.

    A. Any controversy between an association and a unit owner may be submitted to mediation upon agreement of the parties prior to taking legal action.

    B. Either party to a mediation may terminate the mediation process without prejudice.

    C. If a mediation agreement is reached, it may be presented in court as a stipulation. If either party violates the stipulation, the other party may seek relief in court.

    D. The governing documents of an association may specify situations in which disputes must be resolved by binding arbitration or another means of alternative dispute resolution.
We continue to support the concept of alternative dispute resolution as a method to resolve conflicts before they become full blown disputes and will advise our clients to follow the requirement currently in Colorado law that associations have in place procedures addressing disputes arising between the association and unit owners. 

 We will keep you posted on action relating to this bill during the legislative session. We also look forward to hearing what you think of HB 08-1135 and encourage you to Post a Comment to this post by clicking on Comments.

More government interference in the business of managing HOA's.
If this were to mandate Arbitration and not mediation I could better support it but mediation only costs the association more legal fees in guiding the association through the mediation process only to have it not be benificial and then have to go through the process again in court which is additional dollar cost to the associaton.

I too am concerned about the interpretation of the term "impartial decision maker." Many homeowners may feel that a board or committee is not an impartial decision maker. If this bill passes, and associations would be required to submit all covenant violation problems to an outside source, it could potentially be an exhorbitant cost, the effect of which would be no pursuit of violations at all. The bill seems superfluous considering the current law.

This seems to be little more than a reiteration of CCIOA provisions. However, the statement, An "Impartial Decision Maker" is defined as "a person or group of persons who have the authority to make a decision and do not have any direct personal or financial interest in the outcome." causes me some concern. Wouldn't EVERY property owner and therefor board member be someone with the potential for a "direct or personal interest in the outcome" of any decision? Could that not result in a further "clerification" of the law resulting in a court appointed "Impartial Decision Maker" sort of like a receiver? What is the reason for this law anyway if CCIOA essentially addresses the issues? Something seems fishy here.

Dan Kuehl,
former Board Member at the French Quarter

The matters in this bill appear to already be addressed in other legislation such as Federal Fair Housing, SB 89, SB 100, CIIOWA and the term "impartial decision maker" must be deleted. Please remember that board members are unpaid volunteers and if you continue to throw all of these non-essential, complicated bills at them, they will all resign and it is the property owners will lose. We embraced and have complied with all of the pre-existing statutes to the best of our ability. Do not give us bills that are redundant, please.

As a long-term board member and owning in non-owner occupied properties in the mountain towns, I agree with other postings that the term "Impartial Decision Maker" is a cause for concern. Who determines the Impartial Decision Maker and who hires that individual? It appears to me that the Board, any HOA member/homeowner, and management could all be considered to have an interest. This term will only create confusion and additional cost and time to a process, and for small HOA may prevent the HOA from taking action when needed.

Perhaps after Diogenes finds an Honest Man, he can turn up his lamp and begin the task of finding an "Impartial Decision Maker".

I am apparently not alone in my initial question as to who might be deemed impartial. It would seem that no member of the board could be considered impartial because the rule belongs to the board. Similarly a resident committee could hardly be relied upon for impartiality with every case. I see no point to this.

Rep. Carroll seems to have made it her personal mission to amend CCIOA on an annual basis. Maybe she should just re-write the entire law and be done with it. Yes, this is all unneeded and heavy-handed governmental interference in the business of managing our associations, as if we are not competent to take care of it ourselves. She keeps trying to keep HOAs under some type of control, when the problem is trouble-making, "victim" homeowners who seem to think it appropriate to have a legislator solve their personal problems. As a community manager, quite frankly, I am getting tired of hearing all the whining in the media from these folks, who just need to learn to play well in the sand box and quit running with scissors. SB100 did not resolve even-one of the issues of those who testified in favor of the bill, but yet, we're stuck with it.

Living in a covenant-controlled community is a contract between the parties, and should not be interfered with by Ms. Carroll or the state. If either party violates the contract, the aggrieved party has always had the right to petition the courts for redress. I don't see why this has to be made more cumbersome and overbearing. Ms. Carroll's annual legislation amounts to nothing more than perfect examples of big government.

Why do HOA's need this bill? What happens when the homeowner does not get prior approval per the covenants, is this referring to before changes? What happens if the homeowner is a no show for ADR? This appears to exclude any past or present HOA board members or members. It will be an unnecessary expense of time and money for HOA communities.

Has the Legislature applied this process in their day to day operations???

The "imnpartial decision maker" language reflects very poor draftsmanship. If our legislature deems this legislation needed and worthy,at least a clarification of that language should be effected before passage. When I become monarch, I will require that all legislators have real-world experience in the management of community associations before introducing or taking a position on such needless legislation.

In reading this bill I am also very concerned for the same reasons. I live in a condo with an HOA board. It can be scary to know that HOA boards can actually define &/or decide my rights in where I live. My home is my refuge and the Morgan Carroll bill feels as if my home could certainly be infringed upon. I am seriously concerned about the passage of said bill and hope that others will become more aware and act upon this bill by writing-in, emailing or whatever means to make known their concerns as well.
Please know that I hope this bill to not pass in this legislative session and will talk about this to my friends and neighbors so that they will understand just how unfair this bill could be for us.
Most Sincerely,
Sandy Schoneman
830 Sherman Street
Denver,
CO.
80203-2909 or
bluesks@comcast.net

It was my understanding that the only CRS38-33.3-mandated policy was the one regarding disputes between homeowners and boards, and that went into effect on January 1, 2007.

When did the policy regarding Imposition of Fines become mandatory?

I agree wholeheartedly with Mr. Susman. Ms. Carroll appears to be ignorant of how to write clear concise sentences in this, yet again, another poor example of her "legilative prowess". In 2005 we were subjected to the same quality of legisaltion only to have to endure a clean up bill in 2006. Are we to be treated to this interference with the management of our HOA's year after year? What is her goal anyway?

I am very concerned with the "Impartial Decision Maker" reference. What is her intent regarding that? Are we now going to be forced to pay someone, possibly an attorney or another objective outsider, for these services? Many HOA's are already facing serious financial issues due to the mounting number of delinquent owners. Depending on the county, getting delinquent account owners dealt with can take months and thousands of dollars. Now Ms. Carroll seems intent on forcing HOA's to spend thousands on someone to make an "Impartial" decision.

Why do we need another bill regarding ADR? It was already provided for in CCIOA before SB 05-100 and now for some reason she seems to think we need another law requiring ADR. Has anyone suggested to her that she read the current laws on the books before trying to make a name for herself as the "Savior of Those Poor Mistreated Homeowners". And if she just feels she still has to re-write Colorado statute someone should suggest that she takes a course on writing.

She really needs to get a life and find another group of people that need saving.

Amendment language for HB 1135.

This is what will be added to HB 1135 to clarify "Impartial Decision Marker"
Mean a person or group of persons who have authority to make a decision regarding the enforcement of the associations CC & R's, including its architectural requirements, and the other rules and regulations of the association and do not have any direct personal or financial interest in the outcome.

A decision maker shall not be deemed to have a "direct personal or financial interest" if the decision maker will not receive any greater benefits or detriments than the general association membership from the outcome.

The above language will allow both Board Members and Committee Members to be defined as "Impartial Decision Makers".

I contacted the Chairman of the Legislative Action Committee who advised me of this pending change.

I hope the info calms down the troops.

Robert Bleck
Premier Management
719.635-9114