Thursday, March 20, 2014

HOA Fees Disclosure Law Ensures Hiding Details (Colorado HOA law)

If it walks like, sounds like and looks like an effective law then it isn’t.  This describes most disclosure laws.  These laws are generally the result of a Bill’s sponsor(s) caving into interest groups and compromising their own (flexible) principles to get something done even if only ornamental or ceremonial.  Disclosure Bills provide the illusion of accomplishment and are satisfying to those voting for the Bill.  Truly a game of “three card legislative monte”.   HB 14-1254, HOA Fee Disclosure, is the poster child for deception in legislation through disclosure.   Phase I: The original Bill had nothing to do with expanding disclosure of HOA fees, really!  It was aimed at limiting an abusive, excessive, and unauthorized fee on HOA home sellers (transfer fees).  The Bill’s sponsor was threatened by interest groups to change the Bill or it would be killed.  Phase II:  All language in the Bill related to reining in abuse was removed and the Bill morphed into an empty fee disclosure proposal.  Worse yet, an interest group rewrote the Bill with ambiguous, non-definitive, and unenforceable disclosure requirements for most HOA fees and didn’t even address HOA transfer fees.  Phase III:  A legislative attempt was made to include specific language to document, justify, and detail the billing of transfer fees.  This is called disclosure.  In line with the intention of disclosure laws the compromise reached on this effort was  to ”disclose” at the level currently provided that involves a one liner on closing documents with no detail: that’s called endorsing concealment.    There you have it, a disclosure law that ensures nothing changes and nothing revealed but legislators and home owners can now feel good with “disclosure”. 

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