Friday, April 24, 2015

HOA Bill Should be Downright Embarrassing to Colorado Legislators

HB 15-1343 was crafted to "fix and streamline" the HOA property manager licensing law" that will begin full implementation July 1, 2015.  To date, the Department of Regulatory Agencies (DORA) that is responsible for implementing the law has reported no problems to be fixed, no problems with available financial resources to support the program, no lack educational course providers, no problems with their ability to develop exams and conduct testing and grading, nor has DORA reported that the program is too burdensome on business.  DORA has not completed one status report on the results of implementing the licensing law.  DORA's responsibility is to get the program up and running and comply with the law (not  make the law). 
Arrive the special interests.  The same special interests (Community Association Institute (CAI)) that represent the industry to be regulated.  This interest group basically wrote the licensing law and rules and even got legislators to insert verbiage into the law to promote their lucrative business of selling property manager classes.  It appears they have even influenced DORA to avoid a legislative directive to make licensing rules that include full disclosure of all property manager fees and assessments levied against home owners. 
Now the CAI working with legislators and DORA manages to get this Bill proposed as a "streamline and fix" to the licensing law based upon no experience with the program and no reported problems and even before the program is fully implemented.  They further convinced legislators and DORA to again promote the selling of specific CAI courses in this Bill and to allow anyone who pays for and takes CAI courses to avoid State testing mandates. 
This Bill should be downright embarrassing to the sponsors of the Bill and any legislator who votes for it.  To date the licensing program is heavy on fees and mandates on businesses and lite on the intended purpose of the law which is to address abusive industry practices and consumer protections.  Is it any wonder why citizens don't trust or participate in government. 

Sunday, April 12, 2015

Colorado Style HOA Manager Licensing

Colorado-style licensing of HOA property managers: let the fox watch the henhouse.  The business model to develop Community Association Manager (CAM) licensing legislation (and other HOA legislation):  1) legislators consult with the Community Association Institute (CAI)) to craft a Bill aimed at mitigating abusive practices of property managers who are the very folks the CAI represents 2) CAI lobbyist and their CAI “dependable” legislators become Bill sponsors 3) the Bill is assigned to Committees with CAI “dependable” legislators 4) the Bill becomes law with little to no home owner input, full of promoting CAI interests, and heavy on fees and costs and processes imposed on CAMs and 5) the Department of Regulatory Agencies (DORA) implements licensing rules highly reflective of CAI efforts but fail to even contain explicit language for CAMs to obey State law or an HOAs governing laws or for CAMs to report observed violation of the law thus ensuring oversight is empty from the home owner’s perspective.  Then adding one final insult to home owners, DORA was supposed to address abusive, duplicative, and excessive CAM fees assessed home owners (pocketed mostly by CAI members) by requiring “full disclosure” of fees in licensing rules.  DORA mandate for full disclosure on fees:  only require a one liner buried in an HOA contract with the CAM or on home sale closing documents; no requirement to provide any explanation or justification of fees, no required detailed billing  documentation of charges to the home owner, no documentation of how the fee was determined or who retained it, and no mention that the fee is not legally mandated or how the law limits this fee to be charged.
The HOA Manager Licensing Bill, well intentioned and having the potential to clean up abusive practices and fees, has turned into a fees and license collection entity within State, a marketing tool for the CAI to sell its’ educational courses, a law to support the continuation of the HOA Transfer Fees, and a financial burden on small HOA CAMs that has resulted in many quitting the business.  Little can be seen in this Bill to complete the intention of the law: consumer protection.  If all this wasn’t enough in supporting the status quo, a few legislators and DORA working with the CAI have proposed a Bill  (even before the law is fully implemented) to change licensing rules to further promote CAI educational courses and membership, allowing the CAI to partner with and complete DORA responsibilities of credentialing, testing, and grading CAM applicants, and gaining exclusions selected CAI members.

Licensing of CAMs in Colorado is truly the fox watching over the henhouse and exemplifies why it is so difficult to bring trust and participation from citizens in our government. 

Thursday, April 9, 2015

HOA Manager Licensing Law Empty on Content and Enforcement

HB 13-1277, requiring HOA property managers (PMs) to be licensed by July 1, 2015 has fell victim to special interests.  As implemented, the law has turned into more of a fees collection, license testing and issuance business, and a promotional tool to sell educational courses than addressing abusive industry practices and providing consumer protection. The law fails to explicitly require any PM to follow State HOA laws and the governing documents of the HOA managed.  It doesn’t require a PM who observes unlawful practices to pursue corrective action.  Licensing was intended to address abusive and unjustified fees charged by PMs through “full disclosure”.  DORA has defined as acceptable “full disclosure” to be a one line statement on home closing documents or a one liner buried in an HOA contract.  PMs will not be required to explain or justify fees or to issue a billing statement detailing charges.  Home owners, however, will continue to be required to pay fees no questions asked.  A further failing of this law is the resulting financial burden on the smallest of HOA PMs that has already resulted in business owners deciding to quit the business leaving such services unavailable to many smaller and rural HOAs.  As written and implemented, licensing will change little it was intended to correct and continue that which special interests did not want changed.

Footnote: even before the licensing law was fully implemented the Community Association Institute (CAI), whose members are the impetus for licensing, had private meetings with leadership in DORA and with legislators to craft a Bill to revise the licensing requirements. Not one thing in this proposed Bill addresses the deficiencies in ethics and rules, operating standards, disclosure of fees, or helping small HOA managers. It does include special exclusions for property manager licensing in some supervisory and executive positions (the very folks at the epicenter of industry abuse will now be immune from even the little accountability in the licensing law).