Sunday, January 31, 2016

HOA Transfer Fees: the Most Abusive and Unaccountable Billing You Will Ever Receive

No other bill you will receive will be lacking in documentation and accountability as much as the property manager HOA Transfer Fee.  This fee, first known to the HOA home seller at home closing, requires no hard copy receipt, no justification for charges, and no limits on amounts billed and if you don't pay it you can't sell your home.  How do they get away this extortion of fees imposed on home owners?  Read about this illegal fee and efforts to contain the abuse imposed on home owners on the Colorado HOA Forums web site:

Billing Practices Comparison

HOA Transfer Fee is Triplicate Billing

HOA Transfer Fee and the Community Association Institute (CAI): will not even support requiring property managers to provide a detail billing to home owners

Friday, January 22, 2016

Community Association Institute (CAI) Will Play Whack a Mole in Opposing HOA CAM Accountability in HB 16-1133

HB 16-1133, HOA Manager Professional Responsibility and Disclosure, will be considered in the 2016 legislative session.  It will propose modifications to the HOA Property Manager Licensing Bill and will again surface the obstructive efforts by the Community Association Institute (CAI) in HOA and HOA Community Association Manager (CAMs) Licensing reform: but we hope not.  The Bill will also address problems with DORA administering the law and developing effective CAM operating rules.
Up front in this Bill:  Adds no additional regulation or government reporting requirements,  no new taxpayer contributions, no new fees or burdens to business, does not preclude CAMs from charging any justified fee, and doesn’t interfere with CAM or HOA operations.
In this Bill:  1) direct and definitive statements addressing requirements that CAMs comply with State HOA law and HOA governing documents  2) defines requirements for full disclosure of CAM fees and in particular for HOA Transfer Fees and addresses the problems of excessive fees and duplicate (and triplicate) charging for services already paid for with HOA dues  3) requires CAMs to provide a specifically detailed hardcopy receipt to all payees  4) provides financial relief for the smallest HOA CAMs in reduced fees and educational requirements but still requires they be licensed  6) requires DORA to provide improved transparency and functionality on their web site concerning CAM information and violations.
Opposition from the CAI is expected, again, in the form of empty and non-substantive arguments (just statements and declarations) that contend no changes are needed and all the issues in this proposal are already in the Bill (for whom?).
The CAI will oppose requirements to justify the CAM HOA Transfer Fee and other CAM billings.  This Bill doesn’t limit the amount of any fee or preclude charging any fee but requires meaningfully explaining, justifying, and receipting any fee.  It does begin to rein in the abusive Transfer Fee charged to sellers upon the sale of a home.  Specifically, what other business can bill a home owner and not provide justification based on work performed, not provide a detailed receipt, bill any amount with no questions asked, leave the consumer with no means to contest the bill or its’ amount, no requirement to comply with State restrictions of billing under the law, duplicate bill the home owner (and even triplicate) for services already paid for with HOA dues, and if the home owner doesn’t pay can’t close on their home?   The answer is easy: NONE.  The CAM licensing Bill was supposed to specifically define requirements on justification, legality, and documentation and it did a lame job at it ensuring this questionable CAM billing practices would continue.   The transparency and real disclosure in this Bill will not interfere with any collection of a CAM fee as long as justified and legal.
The fight for financial relief for small CAMs in this Bill was not supported by the CAI in the last legislative session. The cost of a license for small CAMs can equal a year’s income: it’s abusive and burdensome.  Previous misinformation spread was that the goal was to exempt small CAMs from being licensed: not true, never in any proposal but believed by too many.  This Bill provides fairness and relief to small business with reduced fees and educational requirements commensurate with knowledge to legally and competently service small HOAs of 30 or less units.  Educational providers are able to offer small HOA CAM courses at a reduced cost.  Costs for DORA to implement should be covered in the same manner as completed when the total licensing law was implemented.
This Bill also contains specifics on actions and requirements to comply with State law and HOA governing documents that are now ambiguous in the law.  Of importance is the requirement for a CAM to notify the HOA Board if they are in non-compliance with the law, suggest a corrective action, and if the Board continues their actions report the event to DORA.  This documents the event for potential home owner action and also protects the CAM from a complaint that they were complicit.  Will the CAI object to clarification on this issue to make accountability better defined?
HB 16-1133 simply makes the licensing law effective for home owners with no new burdens on business.  It defines accountability, transparency, and fairness that are lacking in the law and required for enforcement.  The objections to improvements in CAM licensing through this Bill will become the CAI’s latest whack-a-mole game in which they float  empty and deflective arguments to slam down any initiative that pops up for real HOA reform and CAM accountability.
Note: the CAI is an organization representing CAMs and HOA legal interests which comprise their membership.

Sunday, January 17, 2016

Triplicate Billing Tolerated With HOA Transfer Fees

Not that one needs another reason to dislike Homeowner’s Associations (HOAs), but try this one: paying for the same services three times.  The abusive and illegal practice of charging HOA Transfer Fees on the sale of a home in an HOA is well known to our legislators, the press, Title Companies, Realtors, property managers, and home owners.  Except for home owners all others ("tacit enablers") turn a blind eye to this deceptive practice that costs home owners upwards of $10 million a year in Colorado.  Here’s how it works and why it is also illegal:

a) HOA home owners pay monthly dues.  The dues cover such community expenses as snow removal, landscaping, and expenses for maintenance of common areas.  They also pay for  administrative costs such as the HOA directory, billings and collections, covenant enforcement, routine legal costs, maintaining a web site, posting HOA governing documents on the web site, administrative staff, and other operational costs.  In most cases the money is well spent contributing to the aesthetics and positive property values.
b)  When an HOA home is sold the HOA property management company (PM), charges the buyer a Transfer Fee.  The fee doesn’t benefit the HOA but is pocketed by the PM.  The fee amount is determined by the PM without any justification required or need to provide a receipt to the payee, it ranges from $0 to over $1,000, has little if any relation to “claimed” work performed, and if not paid the home can’t be sold.  The “claimed” justification is that the sale of the home caused the PM extraordinary and uncompensated expenses.  The “claimed” expenses specifically relate to updating administrative and financial records, providing a copy of the HOA governing documents to the buyer, and issuing a Status Letter to the buyer indicating the financial status of the home seller with the HOA on the date of sale (are HOA dues current, any owed special assessments or fines, or other obligations).  Average Transfer Fee in Colorado: $350.  Here's is the problem and why this is a duplicate billing:

     1. Updating administrative records doesn't result in additional charges to the home owner.  Think in terms of divorce, marriage, death, someone moving in or out, changing a bank account for payments, change of contact information, etc.  A home sale is not unique or extraordinary in this respect thus no fee is justified. 
     2. The Status Letter in any other business in referred to as a final billing.  This is no different than what one receives when terminating their TV cable service, utilities, or health club membership: it’s called the final bill, is routine, has all the detail and is official, no charge to the customer, and already paid for with HOA dues.
     3. Providing HOA governing documents to the buyer?  These are mostly available free of charge on the HOA web site.  The PM doesn’t maintain these legal documents nor are they changed upon the sale of a home.  The cost provide these to a home buyer or Title Company via email or compact disc is no cost to nearly unmeasurable and considered routine services paid for via HOA dues.

c)  When a home is sold in an HOA the Title Company is required to provide the buyer with a Status Letter and a copy of the HOA governing documents.  The PM charges the Title Company that passes the charges onto the buyer/seller: average $175.  See items “a” and “b” above.

d) HOA Transfer Fee can only be legally charged if such charges are justified to compensate the PM for uncompensated work in relation to the sale of a home:  SB 11-234. The HOA Transfer Fee fails this test.

Thus the HOA Transfer Fee represents a triplicate fee for services rendered as described in items a, b, and c.  All true and never refuted by the PM industry.  Why does such a deceptive and illegal business practice continue to be met with silence by the “tacit enablers”?  It’s called legislative lobbyists with the prize to the PM industry of $10 million a year. 

Tuesday, January 12, 2016

Denver Post Article Again in Error on Construction Defects Issues

"Climate for construction-defects reform in Colorado much changed", Jan 12, 2016
They simply refuse to get input from any HOA home owner's organization

The Denver Post again allows those making millions from HOA Construction Defects (CD) litigation to represent the voice and rights of home owners and distort the debate in CD legislative reform. No input from any recognized HOA home owner’s organizations. Their point person again on home owner’s rights is isolated to none other than the Community Association Institute (CAI). The CAI represents the interests of property managers and HOA lawyers, NOT HOME OWNERS.  If CD legislation is ever be explained in a truthful, balanced, and productive manner it must first get by the CAI smoke screen that is all too pervasive in this issue.  

First, almost all HOAs created in the past 15 years mandate in their Declaration that arbitration vs our court system be used in CD dispute resolution. Of the 8,500+ HOAs in the State most are beyond the statute of limitations to sue over CD. As a percentage or relative number of all HOAs, those that changed their Declaration (at the encouragement of HOA lawyers) is very, very small. Thus precluding HOAs from changing their declaration and infringing upon homeowner’s rights is a weak argument. Furthermore, a recent Colorado court case has ruled HOAs can be prevented from changing their Declaration. The CAI would have the public believe the inability to change the Declaration will have a profound impact on home owner’s rights but the reality is that it would mostly impact the ability of HOA lawyers to promote litigation in our costly court system.

The other issue involves requiring home owners to vote on the approval of the use of their own funds on CD litigation. Currently, any HOA Board at the encouragement of their attorney can spend unlimited HOA funds on litigation without the knowledge or approval of home owners. The CAI opposes this empowerment of home owners as it would effectively reduce litigation.

We at the Colorado HOA Form offer the following CD legislative proposal to mitigate litigation and empower home owners: "HOA home owners are required to be apprised of and vote on the use of HOA funds in all litigation". Why is this so difficult!

Friday, January 8, 2016

Join us for our Colorado Springs HOA Town Hall Meeting, Feb 13, free admission-open to the public

The Colorado HOA Forum will be holding another of its’ HOA Town Hall Meetings, this time in Colorado Springs, CO. The Meeting is open and free to the public and is the only HOA presentation from the home owner’s perspective. The Meeting includes an HOA home buyer’s seminar (9-10 am) followed by an array of HOA topics ending with an extended question and answer session for attendees. Find out about HOA legislation, HOA property manager licensing and responsibilities, HOA Transfer Fees on the sale of homes, and other issues affecting the home owner’s living environment, quality of life, and finances. BROCHURE ON OUR WEB SITE
The Colorado HOA Forum is Colorado’s largest and most effective HOA home owner’s advocacy organization working to improve HOA governance through legislative reform. The Forum is a pro-HOA organization and the only Colorado home owner centric organization with nearly 1,000 members located in 80+ cities/towns throughout the State. It strives to ensure a balance in HOA governance that promotes openness and inclusion in HOA governance, protection of home owner’s rights, and address abusive and costly practices that are costly to HOAs and their home owners.

Questions: contact us at or email

Pikes Peak Public Library, Library 21C
1175 Chapel Hills Drive
Room: Venue 21C
Colorado Springs, CO 80920
Saturday, February 13, 2016
9 am—12:45 pm
Plenty of free parking
Free to the public

Invited are all home owners, your legislators, HOA property managers, Realtors, the Community Association Institute (CAI), representatives from the State's HOA Office and DORA, and the media

Tuesday, January 5, 2016

HOA Issues Misunderstood by Legislators

Knowledge of home owner's association (HOA) issues acquired by State legislators continues to be dominated by special interest influence.  HOA laws, recent modifications to such laws, and attempts to legislatively improve upon HOA governance have been primarily written by or killed by special interest groups such as the Community Association Institute (CAI), large property management firms, and/or HOA lawyer groups for decades in Colorado.  None of these groups represents home owner's interests or has any particularly measurable membership from home owners or HOAs.  Thus, the misunderstanding and misinformation on HOA issues in our legislature is problem number one from the home owner's perspective.

Recent HOA issues exemplify the misinformation in our legislature making HOA reform a difficult task.  1) Implementing an out of court binding dispute resolution process for HOA complaints to provide an accessible and affordable venue to resolve most HOA disputes.  This process has been endorsed in a State study, would relieve our court system of case loads, instantly make our State HOA laws effective, and not require costly litigation for very simple HOA problems.  The "big lie" promoted is that the system would cost too much to implement and deny home owners the right to a court case, WRONG.  The process is mostly in place (and paid for) in the State's HOA Office, staffing and related costs would be paid for with HOA registration fees amounting to no more than pennies a "year" per home owner, complaint filing fees would also contribute to cost recovery, and home owners could choose either a court case or the State process.  Our court system would reduce case load and thus taxpayer costs and home owners and HOAs would save on legal costs far exceeding any minor increase in HOA registration fees.  A similar system has been implement for HOA Property Manager (PM) complaints.  2) HOA Transfer Fees cost home owners millions of dollars each year and are not only applied illegally based on State law and FHA/HUD rules but represent duplicate and triplicate charges to home owners and Title companies for services already paid for with HOA dues.  The "big lie" and defense of this fee: kill any effort or open discussion to limit or end the fee without defending it.  3) The HOA PM manager licensing Bill was to address full disclosure of fees charged by property managers: never happened and abuse continues.  Full disclosure has been defined by our legislature, DORA, and special interest to be a one liner in an HOA contract or on home closing documents.  No requirement to provide home owners a detailed receipt of charges or any explanation to justify charges, no need to ensure charges are lawful (just collected), no means to question any fee, and if such fees are not paid by a home owner they can be precluded from selling their home and liens can be placed on their homes.   4)  HOA PM licensing was implemented but look closer and one discovers the rules of conduct are weak and reflect the wants of the very industry to be regulated, the law was used to promote the sales of educational courses for a specific private company (CAI), it lacked specifics requiring compliance with State HOA law, exclusions were placed in the law to benefit large property management firms, time share property managers were excluded, etc.  5)  Legislators have been requested to provide financial and educational requirements relief to the smallest HOA property managers as the cost to get a license for many can be nearly equal to or greater than the annual income from their services.  Such reduced fees are provided to small HOAs in registering.  The "big lie" is that this type of proposal exempts small HOA property managers from licensing and such misinformation has stopped efforts to help small businesses and 6) All State HOA legislation, although comprehensive and mostly clearly definitive, lacks any meaningful process for enforcement other than our costly, litigious, and time consuming court system making enforcement of the most simple home owner's rights a "pay-to-play" legal system.  Thus legislators can brag about their efforts on passing HOA Bills but most are simply ornamental and feel good and will remain so until enforcement is included in such laws.

Legislative apathy and misinformation continues towards HOA Colorado home owners who make up nearly 60% (and growing) of the State's population living in nearly 9,000.  The thousands of complaints and inquiries received by the State's HOA Office and by DORA in the recently implemented HOA PM licensing program exemplify a problem and a problem ignored.  Until our legislators make an attempt to listen to and understand the facts on HOA issues and the flaws in the laws they created (with special interests) the road to HOA reform will be lean for home owners and lucrative for those that have been allowed to write and/or influence laws.