HOA Oversight (in Colorado) Raises Questions: Part I of II

The length of this article requires it to be published in two Parts. This topic could have been written in two paragraphs without background and factual content but then the it would appear to be just another article of allegations and rambling without explanation or supportive discussion.

You've seen it before. An industry pollutes or its' practices cheat citizens so much resulting in regulation of the industry. You've also observed the very industry to be regulated writing the rules and getting too involved with the regulatory process. In Colorado the Department of Regulatory Agencies (DORA) implements HOA law, issues HOA property manager licenses, can levy fines for violations, hosts the State HOA Office, and provides oversight.

DORA's independence in HOA legislative proposals and implementing the law raises questions. In particular, their relationship with the with the well financed lobbying organization (the Community Association Institute (CAI)) that represents HOA property managers (also referred to as Community Association Managers (CAMs)) and HOA lawyers. Although we don't suspect any criminal violations or anyone in DORA receiving financial benefit, we do observe events that make the impression that the CAI is influencing regulatory guidelines and legislation at the expense of home owners.

A recent Colorado law licensing CAMs was jaded with DORA's tacit approval of a highly unusual precedent in regulatory legislation. DORA was aware of and never spoke up about questionable verbiage inserted in the law that defined educational requirements. The law listed one provider's (CAI) educational courses to satisfy when other's were known to be available. This is using regulatory legislation to promote a private business! DORA should have made known that they neither reviewed or certified any of the CAI courses since they would be stuck with using them if in the law (even if subsequently they found them to be deficient).

DORA has also been directed to write property manager guidelines. Their proposal seems very much like CAI guidelines that were developed several years arlier. How questionable is it to have the very industry you are regulating write the oversight rules and regulations? Will the dozens of proposed guidelines received by DORA from the public get equal importance?

More in Part II