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. 

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