Tuesday, November 25, 2014

Enforceable, not more, HOA Laws Needed

The complaints about Homeowners Associations (HOAs) are not that State's lack HOA laws but that they lack enforceable HOA laws from the home owner's perspective. In Colorado there are numerous, comprehensive, and definitive laws governing HOA laws. The problem is that the authors and sponsors of these Bills left out the most important aspect of law: enforcement. This is like having speeding laws without fines for violations. In many cases this was absolutely deliberate to get support for passage from those legislators whose votes are influenced by well financed political machines such as HOA lawyers and the Community Association Institute (CAI). HOA law thus provides very good guidelines and principles but without an accessible and affordable means for home owners to pursue their rights HOA legislation becomes more ornamental and providing mostly the illusion of protection of homeowner's rights.

Home owners who don't comply with HOA governing documents can be readily fined and even have homes foreclosed upon. Violations by HOA Boards and property managers of State HOA law and HOA governing documents, however, leave home owners in a vulnerable and helpless mode. Home owners' only workable means for enforcing HOA law is our costly, litigious, and time consuming court system that matches the limited funds and time of the home owner against the unlimited financial and professional resources of the HOA. Even the most simple right of a home owner that is violated by an HOA Board such as gaining access to HOA financial records, challenging conflicts of interests or demanding full and accurate documentation on private Board meetings or minutes of home owner meetings requires the home owner to go to court: not hardly a fair or workable means for governing the HOA.

What is needed to make HOA governance and HOA laws effective from both the HOA and home owner's perspective is an out of court binding dispute resolution process. This process in Colorado has been endorsed in a State mandated study on dispute resolution and only awaits legislative sponsors. Implement this system and most HOA Board and property manager complaints related to non-compliance with HOA law will quickly be mitigated. The system will save taxpayer dollars as it takes case load out of the overloaded court system; disputes are paid for by the parties involved in the complaint (not taxpayers); it sets up a fair venue for dispute resolution (one based on facts and merits of a complaint and not based on an ability to pay); lawyers are not required; trained arbiters in HOA law are used ensuring knowledgeable people will conduct and make decisions on complaints; the system is low cost, timely, and provides for a guaranteed decision on any complaint; and no home owner is denied to use the court system if they choose.

So enough with more ineffective and mostly administrative HOA laws. What we need is an enforcement system to make the existing laws enforceable.

Sunday, November 16, 2014

HOA Legislation Needed for Majority of Colorado Home Owners

Homeowners Association (HOA) issues are not the most sexy issues but are the most underreported issues affecting a majority of Colorado home owners. These issues are also mostly neglected by our legislators who don't fully understand the economic and property rights issues associated with HOAs. Colorado has numerous, definitive, and comprehensive HOA laws but presently these are mostly unenforceable from the home owners perspective. HOA home owners pay fees and assessments upwards of $10 million a year to sell their homes that are not applicable too other home owners. These home owners are also unknowingly (until they receive a bill) subjected and vulnerable to major special assessments and fees without their knowledge or approval and if not paid can be foreclosed upon. It is also the only living environment that requires a home owner to go to court using their limited funds to defend their rights under the law only to have their own money (HOA dues) used in court by the HOA to defeat such rights. HOA legislative reform is needed, is non-partisan, and will affect the lives of Coloradans equal to any legislation passed. Our organization, Colorado HOA Forum, www.coloradohoaforum.com, will again be seeking legislative sponsors and media interest for this highly affective issue that is more material than sensational in the lives of our citizens.

Monday, November 10, 2014

Colorado HOA Forum's Newsletter Aug - Oct 2014

We've delayed the distribution of our newsletter until after the 2014 election.  We distribute it to legislators and wanted that event to pass and allow for our email with the newsletter to not be mixed in with their election material.  Previous newsletters 
Note, the newsletter will continue to cover Colorado HOA issues but we are attempting to provide readers with a more broad and diverse source of HOA news.  We do this by scanning HOA news from around the nation. We hope this provides the reader with topics we wouldn't ordinarily cover but are of importance.  Although some of these articles are from other states the content is applicable to Colorado.  As always, consult your HOA governing documents and our State laws prior to proceeding with any complaint or legal action and/or write us or the Colorado State HOA Office for comment.
We continue to ask your support in contacting legislators to sponsor our legislative goals to reform HOA governance.  We are available to meet with them at their location, date, and time of convenience.
Please join our cause, receive our newsletter, and get involved in our email campaigns for legislative reform.

Wednesday, November 5, 2014

Your Voice: FHA May Resolve Insult to Colorado Home Owners by Realtors, Property Managers, and the CAI on HOA Transfer Fees

Realtors, more specifically, the Colorado Association of Realtors (CAR), is not only misrepresenting but insulting home owners with their support of the abusive HOA Transfer Fee .  This is the fee charged by HOA property managers that has never been justified by work completed, is not mandatory but if not paid you won’t be able to sell your home, the fee amount can range from $50 to $1,100+ and is not negotiable or even supported by a detailed invoice, and  the money is not pocketed or benefitting the HOA but is retained by the property manager to enhance profits off the backs of home sellers.  This fee costs home owners in Colorado upwards to $10 million a year
During its’ push for legislation to end or limit this fee in early 2014, the Colorado HOA Forum, www.coloradohoaforum.com ,  interviewed CAR.  Not only did CAR have a deflective non-opinion status on this fee but had the facts as stated above all wrong concerning this fee.  They didn’t realize the excessive amounts charged, who determined and retained the fee, and that the fee was not mandatory.  CAR apparently got its’ information not from its’ members but from the Community Association Institute (CAI) whose members pocket these fees each year and worked to oppose, change, and make ineffective this proposed legislation.  In an interview with the Denver Post in 2014 CAR couldn’t define its’ stand on Transfer Fees.  CAR’s position is a costly and insulting blow to their customer’s bank accounts.
Now the FHA is stepping forward with anticipated new guidelines for approving FHA home loans that would in part put an end to the abusive transfer fee.  Specific in their proposal is ending FHA home loans when transfer fees are involved.  Let’s hope influence groups such as the National Association of Realtors, CAR, and the CAI don’t get this positive action stopped.  These groups have petitioned the FHA to allow transfer fees on HOA home sales.  Note, a few years back it appears that the CAI worked to get an exception in Colorado law that made transfer fees on all residential home sales illegal except on, you guessed it, HOA home sales (CAR never objected).  Don’t these interest groups whose income depends on home owners understand how insulting it is to continue raiding people’s pocket books with these unjustified fees for their own selfish benefit?
The FHA proposal to end this unwarranted fee on FHA home loans is a beginning to rectifying this financial wrong in the real estate market where the customer (home owner) is not defended by the very folks (Realtors) who depend on them the most and who butter their bread.  The Colorado HOA Forum will again work this legislative session to pass a Bill to end or limit this fee.

Your Voice: HOA Oversight in Colorado Raises Questions: Part II

This is part two of a two part article on HOA governance in Colorado and the role of a government agency in influencing (or not) HOA law.
DORA is also chartered to seek out multiple providers for educational requirements under CAM licensing and to develop testing procedures. To date, and after one year, DORA has not posted on its’ web site the competing educational providers with the CAI remaining the sole source. CAI legislative sponsors promoted the CAI courses and DORA gave tacit approval and to date there has been nothing indicating that DORA has reviewed and certified the courses, that the courses are reflective of current HOA changes in the law, and a process to mandate annual review of such courses will take place. Also, by not early on posting alternative sources for educational classes the CAI can charge what they want and CAMs are left with a sole source of “approved classes?” An unintended (again) promoting of a private company via a government agency.
DORA is now considering allowing the CAI to conduct its’ own testing and grading of exams and granting partial license certification to PMs. This is contradictory to the law that indicates a professional testing company shall complete testing and grading with only DORA granting license certification in part or in full. Furthermore, the oversight, review, and update of CAI class material, testing and grading procedures, and security over such tests have not been reviewed by DORA. We know of no plans to do so. If the CAI request is granted, we will have the same folks (CAI) that have been “leaders” in CAM education and leadership in Colorado for two decades and resulted in the in the need for regulatory oversight be the guiding light in “cleaning-up” the industry. This arrangement (along with CAI involvement in guidelines) is equivalent to allowing a company that is polluting a lake and waterways write their own rules and standards and complete testing of waters for safety, and issue their own licenses. DORA needs to take full control of this program to maintain the integrity of the licensing program.
Then there is the recent event whereby a Bill was proposed to end/limit the unwarranted, unjustified, and illegal (in Colorado) HOA home sale Transfer Fee. Our legislative sources at the Colorado HOA Forum and articles on the CAI legal web site indicate the CAI lobbied hard to defeat this Bill. As a result the Bill was totally diluted into a disclosure law thus ensuring nothing would change and million of dollars would continue into the bank accounts of CAI members. DORA was to address disclosure of all fees and the HOA home sale Transfer Fee in their guidelines for CAM licensing. Not surprisingly, the first release of CAM licensing guidelines included only vague directives on fees disclosure. DORA’s ambiguous and loose disclosure mandates for HOA Transfer Fees don’t require justifying the fee in detail. DORA CAM guidelines don’t mention in disclosure requirements that the HOA Transfer Fee is not mandated by law nor hold up the sale of a home hostage in the event the fee is protested by the seller. Also, with no requirement to justify the fee by cause with an itemized invoice, it will make it difficult for home owners to protest this fee. The opportunity for DORA to protect consumer rights, as their charter indicates, will be missed if fees disclosure of all types are not required to be detailed and justified.
The next test for DORA is coming this legislative session. Our organization will be pursuing legislative sponsors for an out of court binding dispute resolution process for home owner complaints Bill. The CAM licensing program includes a home owner complaint resolution process handled out of court through DORA. Also, a State HOA dispute resolution study completed by DORA endorsed this process. The CAI and legal types, however, oppose this process. DORA will be asked to speak on this issue and if they reject it they are rejecting and invalidating the very work they will be doing under CAM licensing and other licensing programs they administer. DORA should also speak to allegations that this out of court process will result in home owners losing legal rights and the process is as costly as a court appearance: both NOT true.
Citizen trust in our government institutions is at an all time low and HOA home owners need look no further than the examples above to take that trust down another notch. If DORA was fully operating within its’ mission statement (see below) and being an active participant in the legislative and regulatory process there would be no reason for this article:
“DORA is dedicated to preserving the integrity of the marketplace and is committed to promoting a fair and competitive business environment in Colorado. Consumer protection is our mission.”