Sunday, August 24, 2014
A reality check from the home owner's perspective will shock most HOA home owners. If you read these laws you will find that enforcement verbiage from the home owner's perspective is missing, lacking, or unworkable. The main and most widely used means of HOA home owner's rights suggested in Colorado law are mediation and our court system. To date, and from the thousands of inquiries and complaints received by an unknown State HOA Office, these two remedies in dispute resolution have been a failure.
Mediation has been practiced for decades and has at best not served home owners well. Think about it. A home owner must gamble hundreds of dollars on a mediation session (if the HOA is willing to mediate) and there is no guarantee a solution will be reached. Even when there is an agreement an HOA can ignore the agreement and that leaves the home owner back to our court system attempting to gain enforcement or re-litigate their case. Most home owners simply can't gamble hundreds of dollars on a process that has no guaranteed outcome. The Colorado HOA Forum's web site has an extensive discussion on mediation vs other methods of dispute resolution.
Then there is our litigious, time consuming, costly, "pay to play" court system. Most HOA complaints simply don't belong in court. They are simple matters related to such issues as non-compliance with HOA governing documents or State law and complaints against the HOA property management company. HOAs are not adverse to going to court. The HOA understands they use their unlimited funding from HOA dues to fight your limited personal means. The HOA lawyers get paid win or lose. No HOA Board member will be held personally accountable in the event you win. If you lose you end up paying for your lawyer and most likely the costly HOA legal fees. This is a sad venue for justice for home owners and thus most home owners simply don't pursue enforcement of their rights. The track history of too many home owners in court is financially disastrous and thus court should be avoided.
Another means of enforcement is through arbitration and this is mentioned in State law but rarely pursued and not understood. A form of arbitration called med-arb (mediation-arbitration) allows for conducting a mediation session with a definite and enforceable outcome: a beginning and end in the complaint process. Basically, if the parties can't agree to a solution the empowered mediator - arbiter will decide for them. Actually this not different from our court system in which the judge decides for the parties but avoids the high cost, litigious processes and procedures, mitigates the time to litigate, and doesn't require lawyers. It ends the "pay to play" legal venue and saves both home owner and HOA the expense of litigating and saves taxpayer money by removing these cases from our already over burdened system. No legal rights are forfeited by home owners as they can still opt to go to court. This process is being pursued in several States and most recently has been advocated in a Colorado State mandated report on HOA dispute resolution. Implementation only requires legislative sponsorship. Med-arb is a recognized legal process and in fact a similar process will be used in handling home owner complaints against Colorado HOA property managers upon implementation of the property manager licensing law in 2015. If this is good enough for property manager complaints why not for home owner vs HOA complaints.
Until HOA home owners get an out of court binding dispute resolution process such as med-arb our State HOA laws remain more of an illusion of home owner protection than realtity.
Friday, August 22, 2014
Our group, Colorado HOA Forum, www.coloradohoaforum.com , will again begin our efforts to gain legislative sponsors to reform HOA governance. This should be a somewhat easy task with over two thirds of Coloradans living under HOA governance, with thousands of complaints received by the State HOA Office, and equal amounts of emails and telephone calls received by legislators about HOA concerns. However, opposition groups are well funded and influential in our State legislature.
This is an election year and HOA home owners need to ask their legislators questions about who they represent in HOA issues. HOA issues for this voting group affect their lives financially, legally, and socially as much if not more than any issue.
Friday, August 15, 2014
Homeowners Associations (HOAs) are comprised of three entities:
home owners, HOA Boards and their legal counsel, and the property management
company (PMC). Problems can arise from any of these but for those who
follow HOA issues the involvement of PMCs can be most problematic. PMCs affect
HOA governance with their direct involvement in operational and financial
matters and through their trade organization, the Community Association Institute
(CAI), which has undue influence in HOA legislative activities that craft HOA
law. For decades the sole source for Homeowners Association (HOA)
information for the media and the State Legislature has been the CAI. Why
not? Their name implies they represent the concerns of community
associations and home owners: aka HOAs. Legislators "trust"
this organization to represent home owners and citizen interests but most have
no idea who or what they represent. Legislators actually think their
membership and funding comes from HOA home owners and HOAs: WRONG.
They have trusted this organization for decades and have allowed them to
set the rules in HOA governance and financial management. Yes, they
craft the legislation that sets the rules for their industry and interests and
ensure through their actions that HOA State law and HOA governing documents are
highly enforceable from the HOA Board’s and PMC perspective and very weak for
home owners. Due to this close relationship between the CAI and legislators
across the country, HOA legislative reform has been very difficult and the few
Bills that have passed have been watered, are more cosmetic than effective, and
in no way help with enforcing home owner’s right