HOA Group Continues to Block HOA Legislative Reform

The name sounds HOA home owner friendly but the organization has nothing to do with representing home owner interests:  just the opposite.  The Community Association Institute (CAI), the trade group for property managers and HOA legal interests, has thwarted HOA legislative reform for decades.  They have obstructed legislative efforts to promote enforcement of HOA home owner’s rights as stated in State law and HOA governing documents while getting legislation passed to promote their financial interests and ensure continuation of abusive, unjustified, and illegal fees on HOA home owners.  To say this another way, our legislators have allowed this group to write, modify, and suggest HOA legislation that has been detrimental to home owners.
 
Recently the CAI led efforts to kill legislation that would have saved home owners nearly $10 million in abusive and unjustified HOA Transfer Fees; this legislative session successfully blocked legislation that would require home owner approval on the use of HOA funds in litigation;  don’t support an out of court, affordable and accessible binding dispute resolution process for most HOA complaints;  got legislation passed to promote the sale of their costly educational courses and gained exemptions from State testing mandates for those that purchased and completed their courses; didn’t support reduced financial and educational requirements for the smallest of HOAs (20 or less units) to relieve them of costly licensing requirements; and opposed requiring full disclosure and justification of fees assessed home owners by property managers in the licensing rules.
 
Until our legislators place a priority on and listen to HOA home owners who make up over half of Colorado’s population vs the CAI financial interests the complaints to the State’s HOA Office will continue and home owners will be vulnerable to abusive and costly practices.  

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.

Why HOA State Law and Governing Documents are (not) enforceable

There are plenty of definitive and comprehensive State HOA laws.  HOAs have their own governing documents defining controls, covenants, and restrictions.  HOA Boards ensure compliance of covenants through their authority by issuing fines, court actions,  and/or foreclosing on property for unpaid fees, fines and special assessments:  This is part of living under HOA governance and home owners must understand the HOA governing documents were developed with the intention of enforcement.
 
Now that takes care of enforcement of home owner compliance.  What about when an HOA Board violates the governing documents or even State HOA law?  The rules of enforcement change and home owners begin to understand that enforcement may be a one way street and they are running into oncoming traffic.  The only means of enforcement from the home owner's perspective is our costly, litigious, and time consuming court system.  Most home owners simply can't afford or compete with the unlimited funds of the HOA and their paid attorneys in even the most simple court case.  Yes, lawyers are allowed in Small Claims court.  Furthermore, if the home owner loses they most likely will pay the HOA legal costs.  Under the current environment of HOA litigation most home owners quickly understand that the cost of pursuing a violation by their Board, management company, or HOA attorney far outweigh the benefits and their chances of justice in a "pay to play" court system preclude pursuing their complaint.

HOA home owner complaints simply don't belong in our court system.  They mostly involve violations of HOA governing documents and when pursuing financial losses the amounts are low.  The cases are not complicated and should not require lawyers.   Such cases unnecessarily add to court work load and costs.  What is needed, and has been endorsed by a State sanctioned study on HOA dispute resolution, is the implementation of an out of court binding dispute resolution process.  This venue is affordable, accessible, and provides an environment in which facts and fairness trump financial resources.  It is also a process that is easy to understand, is expedient and simply involves filing a complaint with the State, the complaint is vetted for substance, and a hearing is completed by a State sanctioned med-arb (mediator with arbiter (decision making) authority) trained in HOA law.  If the parties in the complaint can't come to a binding agreement the med-arb will make the binding decision.  In affect, this is what happens in a court venue: someone, the judge, makes a decision and it is enforceable.  The process has a beginning and end all out of court and affordable.  Placing this process into law only awaits legislative sponsors (and overcoming objections from the Community Association Institute (CAI) and lawyers who profit by HOA court actions).

Colorado HOA Forum Begins it's Legislative Initiative

The Colorado HOA Forum has begun its' efforts on HOA legislative reform for the 2014-15 legislative session.  Our approach on changing Colorado HOA law is to gain legislative sponsors for our proposed initiatives through email and telephone campaigns, meeting with our law makers in person, and getting media coverage to promote our efforts.  Emails and notices sent to our legislators and the media.

We again will face the opposition of the Community Association Institute (CAI), legal community, and property managers in our efforts.  These are very well funded lobbyist with a history of obstructing HOA reform and they have many legislators in support of their self serving agenda.  Home owner groups must continue in their efforts to dispel the belief in State legislatures that the CAI somehow represents home owner interests: this is the current environment.  Once legislators consider home owner organizations opinions and initiatives equal to those of the CAI we can begin to implement HOA reform. 

We encourage HOA home owner organizations and individuals in Colorado and throughout the U.S. to continue lobbying their legislators and the media on the need for HOA reform. 

Your Voice: HOA fees: it’s not the amount but the value and justification

Two thirds of Colorado residents live under Homeowners Association (HOA) governance.  All live under covenants, controls, and restrictions and are assessed dues and fees in return for community provided services and amenities.  Amounts vary and so do the range and quality of service.  Dissatisfaction arises when the value of services for fees is not in line with home owner expectations and/or the justification for fees is poorly supported and can’t be contested.  So what causes this misconnect between expectation and delivery.

Problems can occur when HOA home buyers/owners are unaware of what services are to be provided by the HOA.  Providing this information to home owners prior to closing on the sale of a home and having buyers certify they read it should be a legal requirement.  Problems also occur when HOAs mismanage funds resulting in an inability to provide services at a quality level.  This includes not funding HOA reserve funds for planned maintenance, using intended maintenance funds inappropriately on Board special projects or on costly and mostly avoidable law suits, over paying and not competing contract work, and just poor financial planning and management with no oversight or accountability.  Then there is the problem of HOA dues being too low for too long to deliver services.  Another significant and less discussed problem relates to the lack of oversight and control over the property management companies (PMC).  In most HOAs, the PMC runs the community and yes this is the tail wagging the financial dog with little oversight or disclosure to home owners.  One more but necessarily the last problem is that HOA Boards have almost zero accountability and unlimited authority in making financial decisions for the community without apprising or with the approval of home owners.  This includes raising HOA dues, making special assessments, embarking on high cost law suits, and funding special and high cost projects all without home owner approval or having to justify their actions to home owners.

Then there are fees assessed HOA home owners by PMCs that are not in any HOA documents or approved by HOA Boards.  For example, the HOA Transfer Fee.  This fee is NOT imposed by, determined by, or retained by the HOA but pocketed by the PMC upon the sale of a home in an HOA.  No justification or legal requirement is given, the amount is arbitrary ranging from $100 to over $1,000, can’t be negotiated, must be paid or you can’t sell your home, and worst of all you don’t know about the fee until the closing on your home.

HOA fees and financial accountability are an ongoing problem for HOA home owners.  Although Colorado has many HOA laws they all lack an ability to hold the HOA Board and/or PMC accountable for financial mismanagement, reckless behavior, or to provide quality services.  The laws lack mandates for home owner involvement and approval on spending HOA funds.  Home owners are left paying the fees and assessments unless they choose to challenge the HOA in our costly, litigious, time consuming, “pay to play” court system and most simply can not afford this venue.  The good news is that most HOAs and PMCs operate with a good degree of integrity but when bad apples arise the financial consequences can be catastrophic and costly to home owners.  Until our State laws are modified to empower home owners with a means (out of court binding dispute resolution process) to hold HOA Boards and PMCs accountable home owners will remain vulnerable to financial abuse and unexpected financial obligations.

Colorado HOA Law and Enforcement: the Illusion of Home Owner's Rights

HOA home owners are locally governed by the HOA's covenants, controls, and restrictions (CCRs) and by-laws.  There are also State laws that describe and establish a clear, comprehensive, and uniform framework for the creation and operation of common interest communities (HOAs).  So it appears we have plenty of laws both within the HOA and in State HOA law to protect home owners from abusive Boards and property management companies, inappropriate and illegal practices, and to promote open governance.

A reality check from the home owner's perspective will shock most HOA home owners.  If you read these laws you will find that enforcement verbiage from the home owner's perspective is missing, lacking, or unworkable.  The main and most widely used means of HOA home owner's rights suggested in Colorado law are mediation and our court system.  To date, and from the thousands of inquiries and complaints received by an unknown State HOA Office, these two remedies in dispute resolution have been a failure.

Mediation has been practiced for decades and has at best not served home owners well.  Think about it.  A home owner must gamble hundreds of dollars on a mediation session (if the HOA is willing to mediate) and there is no guarantee a solution will be reached.  Even when there is an agreement an HOA can ignore the agreement and that leaves the home owner back to our court system attempting to gain enforcement or re-litigate their case.  Most home owners simply can't gamble hundreds of dollars on a process that has no guaranteed outcome.  The Colorado HOA Forum's web site has an extensive discussion on mediation vs other methods of dispute resolution.

Then there is our litigious, time consuming, costly, "pay to play" court system.  Most HOA complaints simply don't belong in court.  They are simple matters related to such issues as non-compliance with HOA governing documents or State law and complaints against the HOA property management company.   HOAs are not adverse to going to court.  The HOA understands they use their unlimited funding from HOA dues to fight your limited personal means.  The HOA lawyers get paid win or lose.  No HOA Board member will be held personally accountable in the event you win.  If you lose you end up paying for your lawyer and most likely the costly HOA legal fees.  This is a sad venue for justice for home owners and thus most home owners simply don't pursue enforcement of their rights.  The track history of too many home owners in court is financially disastrous and thus court should be avoided.

Another means of enforcement is through arbitration and this is mentioned in State law but rarely pursued and not understood.  A form of arbitration called med-arb (mediation-arbitration) allows for conducting a mediation session with a definite and enforceable outcome: a beginning and end in the complaint process.  Basically, if the parties can't agree to a solution the empowered mediator - arbiter will decide for them.  Actually this not different from our court system in which the judge decides for the parties but avoids the high cost, litigious processes and procedures, mitigates the time to litigate, and doesn't require lawyers.  It ends the "pay to play" legal venue and saves both home owner and HOA the expense of litigating and saves taxpayer money by removing these cases from our already over burdened system.  No legal rights are forfeited by home owners as they can still opt to go to court.  This process is being pursued in several States and most recently has been advocated in a Colorado State mandated report on HOA dispute resolution.  Implementation only requires legislative sponsorship.   Med-arb is a recognized legal process and in fact a similar process will be used in handling home owner complaints against Colorado HOA property managers upon implementation of the property manager licensing law in 2015.  If this is good enough for property manager complaints why not for home owner vs HOA complaints.

Until HOA home owners get an out of court binding dispute resolution process such as med-arb our State HOA laws remain more of an illusion of home owner protection than realtity.

Will Colorado HOA Home Owners be Ignored by Legislators, Again?

This past Colorado Legislative session was a loss for home owners with proposed legislation to save HOA home owners millions of dollars in unjustified fees reduced to a meaningless disclosure Bill.  Another proposal to preclude HOA Boards from using HOA funds on law suits without home owner approval died.  Then there was just a lack of interest by legislators when asked to sponsor Bills to limit the amount of special assessments a Board can levy without home owner approval, limiting fees and administrative charges on HOA debt (not pocketed by the HOA), and follow-up on a State mandated study that would provide for an out of court binding dispute resolution process for most HOA home owner complaints.  The big winners with HOA home owner legislative efforts were the Community Association Institute (CAI), lawyers, and property managers who lobbied to ensure HOA Bills and issues were not addressed and/or when introduced as legislative Bills were killed or watered down to retain the status quo.

Our group, Colorado HOA Forum, www.coloradohoaforum.com , will again begin our efforts to gain legislative sponsors to reform HOA governance.  This should be a somewhat easy task with over two thirds of Coloradans living under HOA governance, with thousands of complaints received by the State HOA Office, and equal amounts of emails and telephone calls received by legislators about HOA concerns.  However, opposition groups are well funded and influential in our State legislature.

This is an election year and HOA home owners need to ask their legislators questions about who they represent in HOA issues.  HOA issues for this voting group affect their lives financially, legally, and socially as much if not more than any issue.

Colorado HOA Forum: Newsletter May - July 2014

The Colorado HOA Forum has just published its' latest newsletter:  May - July 2014.  The newsletter can be accessed on their web site    www.coloradohoaforum.com  

CAM Licensing Provides for Out of Court Binding Dispute Resolution, why not same for HOAs ?

We would like to see the Colorado Department of Regulatory Agencies (DORA) speak out in support of our out of court binding dispute resolution proposal  Regardless of what they may claim, they do get involved on some level with legislation.  This was exhibited when they tacitly endorsed an empty disclosure law to rein in HOA transfer fees vs a direct law to limit this abusive fee.  They were quoted by legislators and the CAI as not endorsing a law to limit transfer fees.  Furthermore, DORA has directly allowed interest groups to write their regulatory guidelines as is the case with property manager licensing with CAI input.   

This Office completed a study on HOA complaint resolution in which our proposal for an out of court binding process was recommended.  The proposal awaits a legislative sponsor and surely DORA’s opinion will be sought.  We hope DORA points out when questioned by legislators in the next legislative session that they will be providing an out of court dispute resolution for property manager complaints.  If it is good enough for property managers (and all others that DORA regulates) it is a valid process for HOA home owner complaints.   

Frequently Asked Questions Concerning property  manager licensing

DORA web page for all property manager licensing information

 

FHA Loans, CAI, and Transfer Fees

The CAI is continues to attack home owner wallets in their defense of transfer fees assessed on HOA home sales.  If you recall it was the CAI that led the effort to kill the Bill in Colorado that would have limited/ended transfer fees.  That cost home owners over $10 million a year and fattened their constituent bank accounts.   

The FHA will be issuing new rules to limit or end transfer fees assessed by third parties.  Basically, any home sale involved with assessing buyers transfer fees will not be eligible for an FHA loan.  This supports what we advocate and maybe our legislators will get it this time around and vote for home owners and not property managers and lawyers with legislation limiting HOA transfer fee. 

The National Association of Realtors has come out to oppose transfer fees that developers and others assess home buyers to generate private revenue and profit.  They still are not on board with prohibiting or limiting HOA transfer fees assessed by property managers that our group has written extensively on and lobbied our legislators in Colorado.  When will the Colorado Association of Realtors (CAR) and our State representatives stand up to the lawyers and the CAI to end transfer fees and defend the folks who put bread on their plate: home owners?  Ask CAR?  Email: communications@ColoradoREALTORS.com 

If the new FHA guidelines limit or prohibit the assessment of transfer fees on their loans this would be a good first step and help in promoting legislation in Colorado to end this abusive and unjustified fee.  The new rules will be published later this year.  

 

 

Colorado HOA Forum's 2014-2015 Legislative Initiative

The Colorado HOA Forum’s legislative Goals and Objectives for 2014-2015.  If you support a goal (s) please take time, using our web site, to write your State legislator asking them to sponsor legislation to make it the law.

1. Include an out of court binding dispute  resolution process in all Colorado HOA laws (replace courts and mediation).

2. Improve upon Colorado legislation that licenses HOA property managers

3. Limit fees and administrative assessments on HOA debt.

4. Increase the roles, responsibilities, authority, and enforcement capabilities of the Colorado HOA Information Office and Resource Center including involvement in administering an out of court binding dispute resolution process

5. Restrict/limit transfer fees in the sale of HOA homes

6. Require realtors and HOA home buyers to be provided with the following information and certify they received and read them: a copy of the HOA's governing documents; information on insurance coverage provided via the HOA; any HOA homeowner debt or HOA liens associated with the home; a current HOA financial statement;  the amount of HOA dues; any current and/or planned special assessments; status of the HOA reserve fund; the number of rentals and foreclosures in the HOA; rental restrictions and other items identified in our HOA Home Buyers Guide.

7. Term limits on HOA Board members when others are willing to serve. 

8. Include as part of the HOA registration process a certification that HOA Board members read their own HOA governing documents and applicable information posted on the State's HOA Office’s web site concerning State HOA law.

9. Limit the amount of special assessments an HOA Board can levy without approval of home owners.

10. Require HOA Boards to gain home owner approval prior to entering into law suits using HOA funds.

 

 

 

 

 

HOA Home Owners Push for Workable Dispute Resolution

Colorado home owners mostly live under Homeowners Association (HOA) governance. This living environment has many advantages but one trait currently gives HOAs a deserved bad name.  If a home owner has a dispute with their HOA Board or property management company (PMC) they are mostly left with our costly, litigious, and time consuming court system which doesn't work for home owners.  The State's HOA Office completed a mandated study on dispute resolution offering several out of court solutions.  One recommendation was an out of court binding dispute resolution process whereby complaints are filed and settled in an out of court venue at an affordable cost.  Home owners don't want a costly dispute resolution process (court) or discussion of their complaint with the hope of a solution that costs them hundreds of dollars without any guarantee of a decision (mediation).  Home owners deserve a process already used in Colorado for some professions and is planned for HOA PMC complaints: out of court binding dispute resolution. It's quick, fair, low cost, non-litigious, doesn't require high cost lawyers, no cost to taxpayers, and renders finality to a complaint.  It's time to provide HOA home owners with a workable, affordable, and accessible dispute resolution process that promotes vs hinders problems resolution.  www.coloradohoaforum.com

HOA Special Assessments: Costly Without Home Owner Oversight

If you live in a Homeowners Association (HOA) you are subject to special assessments with or without your knowledge or approval.  Your HOA Board is empowered to levy a special assessment for most any reason at any amount, at any time on each property owner.   Special assessments can occur when HOA Boards approve self-interest projects or community beneficial capital improvements, to pay for costly law suits approved by a Board, or to replenish depleted reserve funds due to mismanagement or unexpected expenses.  Special assessments can range from hundreds to thousands per household and must be paid.  Don't pay the assessment and your financial obligation can compound through interest and administrative charges.  Wait too long to pay and your property can be foreclosed.  Special assessments can happen without home owner knowledge or approval and without  dollar limit and it is all legal.

Colorado State HOA law and HOA governing documents empower Boards to financially manage the community and only indicate they must act in a fiduciary capacity (a statement that is open to a wide range of interpretation with little accountability).  Nothing in HOA law requires a Board to discuss, notify, or gain approval through a vote of residents when spending HOA funds on costly endeavors .  Boards are also empowered to create enforceable special assessments, no questions asked.  Problematic in this issue is that even when special assessments result from Board financial mismanagement, extravagant spending, or reckless decisions home owners only find out about the dire financial consequences after the fact and through their wallets.  Unless criminal intent is involved, no Board member will be held accountable

Reining in the independent authority of HOA Boards to spend without the consent of home owners that often results in special assessments will require legislative action.  Until this happens, home owners are left with our costly, litigious, and time consuming (pay to play) court system to challenge HOA Board actions and this simply doesn't work for home owners.

 

HOA Home Owner's Wallets Emptied Over Fees

HOA dues, transfer fees, debt collection fees, special assessments, legal fees (law suits and HOA lawyers) can become overwhelming and home owners have little control over any of these financial obligations.  Worse yet, if these fees and assessments aren't paid on time you can be fined without limit and have your home foreclosed for the smallest amount.  Add to this the infamous $100 a month debt notification letters from the HOA lawyers that are not contestable.  Try to sell your home in an HOA and you can be assessed a transfer fee ranging from $150 to over $1,000 without any justification or explanation.  If you don't pay it you can't sell the home.  Then you can be stuck for the cost of your HOA Board entering into costly litigation or a capital improvement projects without home owner knowledge or approval resulting in thousands, if not tens of thousands, of dollars in special assessments.  If the HOA Board is reckless with finances and drains the reserve funds all home owners can be assessed an amount to replenish the fund and this can be very substantial: don't pay it and the amount owed will compound and also can lead to foreclosure.  Your monthly HOA fee can also increase without home owner approval and without limit and it's pay it, pay it on time, or more excessive fees and assessments.  One more thought about all these HOA fees if you live in a gated community.  Even though you pay county and other state and local taxes for street maintenance and snow removal, the local governmental entity will not provide snow removal or street maintenance and repair in your HOA (you pay through HOA dues).
Most HOA dues and assessments are legitimate and support the operations and maintenance of the community.  It is also true that what one home owner doesn't pay in dues others must make up for so reasonable penalties are appropriate.  However, the abusive and reckless authority of some HOA Boards in (mis)managing a community are weakly constrained by HOA governing documents or State law.  These ruling documents mostly require home owners to contest HOA Board behavior and burdensome assessments in our costly, litigious, and time consuming court system.  Thus HOA law enforcement from the home owners perspective involves the limited financial resources of a home owner against the unlimited bank account of the HOA: a pay to play legal system favoring HOA Boards.
The HOA living environment can provide home owners with a rewarding life style.  Most communities involve some form of HOA governance and it is mostly impossible to buy a home in a new development without an HOA.  Understanding HOA governance and home owner's rights and financial responsibilities prior to moving into an HOA is incumbent upon the home buyer and will mitigate post purchase problems.

CAI Again is Anti Home Owner in Construction Defects Bill

Pending final version of the Bill we offer the following for your consideration:

An HOA construction defects Bill is anticipated to be introduced to the Colorado legislature.  It would allow home owners to litigate construction defects damages in an out of court venue and to limit the powers of HOA Boards in using HOA funds in construction defects litigation.  Guess who objects to this Bill?

 Denver Post article , “HOAs vow to fight change to defects law”, April 23.  The content was from interviewing CAI (Community Association Institute) spokespersons who vehemently oppose the Bill.  Where do begin?  First, HOAs are not opposing this Bill.  There is no identified HOA organization opposing this Bill nor does one exist.  The CAI surely doesn’t represent the interests of HOAs or HOA home owners.  Next, the CAI claims home owners would be denied their legal rights to a jury trial in construction defects cases.  Interpretation:  the CAI wants to force home owners in construction defects cases and in the most minor HOA complaints (such as a records access complaint) to take their disputes to court.  Court is too litigious, costly, and time consuming for home owners.  Thus, the current system requiring court makes pursuing one’s legal rights not feasible.  The Bill doesn't strip any home owner of their right to sue for damages.  The Bill will allow for an affordable and accessible (out of court) venue via arbitration for home owners to litigate damages using their private funds.  Next, the CAI objects to a provision in this law that would require home owners to approve any construction defects class action suit that would use HOA funds.  This clause in the Bill is intended to protect and empower home owners from HOA Boards that could otherwise independently and without home owner awareness pursue high cost legal cases without their approval.   HOA legal cases often result in material financial loss to HOAs and subsequent special assessments to replenish HOA reserve funds all without home owner involvement.  This provision empowers home owners.  Then the CAI indicated that out of court arbitration costs would not save home owners or HOAs in legal costs.  The CAI makes things up as they go along.  An individual’s court case on construction defects can easily run $20 – 30,000 or more and if you lose add the contractor’s legal costs.  If the HOA takes on the case using HOA funds in a class action suit the costs can easily run in the hundreds of thousands of dollars.  What would it cost to compensate one or a few arbiters for a day or two of work?  Again, the CAI has proven to be the most anti-homeowner organization in the State and throughout the nation. 

 

This Bill can provide home owners with a previously inaccessible and affordable out of court venue for dispute resolution (arbitration), save home owners and HOAs on legal costs, and empower home owners by having a say in how their HOA funds are spent.  The final version of this Bill is yet to be known but you can bet when the CAI comes out against a Bill it surely is not in the interests of home owners.

State HOA Office Study Recommendation Avoids Costly and “milk toast” HOA Dispute Resolution

The Colorado State HOA Office completed its’ study on HOA dispute resolution.  One of the recommendations deserves actions:  “Implementing a binding arbitration program would be a cost-effective and expeditious means by which many of the disputes between homeowners and HOAs can be resolved”.  This would be the single most important and effective piece of HOA legislation passed in decades.  Cost savings to HOA’s and home owners will be millions of dollars a year in legal costs. The proposal can level the legal playing field that currently pits the limited funds of a home owner against the unlimited funds and legal resources of the HOA.  The program would resolve problems based on HOA law and HOA governing documents vs. legal proceedings and manipulation.  Complaints would be resolved in a timely manner before compounding.  HOA complaints would begin and end out of court through an initial inexpensive filing fee and end with a binding decision rendered by a trained HOA arbiter.  Home owners could still choose to go to court vs using this process thus no legal rights are forfeited.  The process is not complicated, doesn’t require lawyers, will not cost taxpayers, and is easy to implement.

HOA complaints mostly don’t belong in a court room and such proceedings cost taxpayers in court costs and unduly overload our court system with cases. HOA complaints mostly concern non-compliance with State law and HOA governing documents and certainly don’t require lawyers and complicated and costly legal proceedings in a court. 

This solution is NOT the flawed mediation process that requires home owners to gamble hundreds of dollars on a mediation session in the “hope” of gaining an agreement on dispute resolution.  Mediation has been a recommended dispute resolution for decades in HOA legislation and is minimally effective.  Mediation adds time, process, and cost for home owners on dispute resolution with no guarantee of finality.  The agreements in mediation can be “walked away from” by either party without prejudice thus sending the parties back to court:  the very thing trying to be avoided.  Mediators are not licensed and don’t require any HOA educational or training standards. Mediators hearing your case can thus be anyone.  This “profession” has less standards and rules than beauticians, plumbers, manicurist, etc. Mediators claim to resolve up to 50-60% of cases heard but what about the other 40% who are thrown back into court and the uncounted complaints that are never filed due to an inability of a home owner to gamble hundreds of dollars on the uncertainty of mediation? 

The recommendation of the State study can resolve the flaws of dispute resolution through the courts and mediation.  The out of court process involves using trained med-arbs (mediators with arbiter decision making authority) in an out of court venue. The cost to taxpayers is zero as the system would be self-funded.  The State’s HOA Office would oversee this process.  It already has an infrastructure in-place for filing complaints and collecting fees.  The process is similar to handling home owner complaints with HOA property managers through the Department of Regulatory Agencies (DORA).  Thus, DORA has administrative models, precedence, and experience to implement this system. 

Objections are surely to come from lawyers, the Community Association Institute (CAI), and mediators who have spoken against this process based on their economic stake in continuing the current litigious and costly dispute resolution process.  However, with thousands of complaints and inquiries received by the State’s HOA Office and legislators it is time to focus on solutions and problem solving vs continuing on the current path that has tainted HOA governance and made HOA laws ineffective for home owners.

Out of court binding dispute resolution is affordable, simple, fair to both HOA and home owner, provides cost savings to home owners, HOA’s, and taxpayers, provides timely complaint resolution, is accessible, doesn’t require anyone to give up their legal rights, and results in decision and finality in disputes.  The State’s recommendation awaits legislative sponsors.

Colorado HOA Forum   www.coloradohoaforum.com

 

 

 

Who or What is the Community Association Institute (CAI): You May Be Surprised

 

Who or What is the Community Association Institute (CAI):

You May be Surprised (a Colorado and Nationwide Perspective)

 

For decades the sole source for Homeowners Association (HOA) information for the media and State Legislature has been the Community Association Institute (CAI).  Why not?  Their name implies they represent the concerns of community associations and home owners: aka HOAs.  They have been the main/only source sought and invited to the table for input and wisdom on HOA matters by Government Agencies, legislators, and the media.  This group is so well “respected” it has been asked to write or participate in writing HOA legislation to ensure participation of a knowledgeable and “unbiased” authoritative source.  Government regulatory agencies invite this group to write industry rules and regulations and mostly adopt without challenge.  The media goes directly to the CAI whenever an HOA problem surfaces to get the reason why and for them to provide a “correct” solution.   HOA legislative proposals will see this group’s lobbying machine swarm and be welcomed at the Capitol to ensure the “right” and “workable” legislation is crafted.   Visit this organization’s web site and read their literature. Unless you do so carefully you would think they altruistically represent home owners vs being the trade group that represents HOA property manager interests.  This group is often invited to Legislator’s Town Hall Meetings (without the same courtesy extended to home owner groups) and represented as the expert and protector of home owner’s rights. 

The actions of the CAI, however, reveal it is a well-financed and marketed machine that is the most anti-HOA home owner group in the country.  In Colorado,  and in other States, over the past decades this group has legislatively intervened to ensure HOA laws proposed or passed have been watered down to be ineffective from the home owners perspective and/or written to ensure CAI’s profitability and increase costs to HOA home owners.  This group represents property managers, HOA Boards, legal and real estate interests, NOT home owners.   Recent examples:  killing an HOA Transfer Fee Bill that costs home owners $15 million a year in unjustified and unauthorized fees; direct intervention in a property manager licensing Bill to ensure it served to sell their educational courses, increase membership and dues and ensure licensing rules and regulations were reflective of their own legislative proposal that protected HOA Boards and property manager interests;  opposed any legislation to provide HOA home owners an affordable and accessible venue to dispute complaints out of court;  supported a Bill to authorize HOA’s to levy fees against home owners even when not authorized to do so in the governing documents;  opposed limiting fees and add-on charges to HOA home owner debt;  opposed full and detailed disclosure of property manager fees assessed on home sellers; obstructed legislation to minimize home owner protections against liens and foreclosure for HOA debt;  and the list goes on and all anti-home owner. 

The beginning to HOA legislative reform and improved governance begins with dispelling the belief that the CAI represents home owners; revealing their history and actions in HOA legislative reform; curtailing the CAI’s influence with our Government agencies, media, and legislators; and having HOA home owner groups recognized in our legislature and in the media to offer a home owner centric perspective to improving HOA governance.     

 

Most Under-Represented Group of Voters in Colorado

The most under-represented group of residents in Colorado is the HOA (Homeowner’s Association) homeowner.  By conservative estimates there are over 1.3 million people residing in over 8,000 HOA’s in Colorado.  Unlike advocates for the poor (or rich), animal rights, child education, the real estate or gambling industries, HOA homeowners have no organized lobbying group or legislative champions.  You would think there would be at least a handful of politicians surfacing to coalesce this group into their support group?  Then there is the media that might advocate HOA homeowner’s rights.  Not a chance.  Such a topic can’t compete with stories about the grave dangers that coyotes pose to the public.  

Those following problems of HOA homeowners, such as the Colorado HOA Forum (www.coloradohoaforum.com), know there is no lack of disputes/controversy relating to HOA’s.  Fraud, waste, abuse, and financial irregularities are frequent consumer complaints.  Add to this HOA Boards and property management companies that refuse to obey HOA by-laws with impunity.  Conflicts of interest between HOA Board members who award contracts and hand out favors are not uncommon.  Our Courts hear volumes of HOA vs. homeowner cases each year.  The number of HOA's falling into bankruptcy due to dishonest HOA Boards and Property Management Companies is not uncommon leaving homeowners with the debt and little capacity to sue those inflicting financial ruin.  Then there are the over 500 complaints received by the newly created Colorado HOA Information Officer’s Office.  Is all this enough to gain the interest of someone in government? 

The primary legislation in Colorado to provide oversight of HOA’s is officially known as CCIOA (Colorado Common Interest Ownership Act).  Nearly 20 years old.  This piece of legislation has very sound principles most of which serve as a “guide” to developing HOA by-laws.  Related legislation such as House Bill 11-1124 addresses conflicts of interest with members of HOA Boards and House Bill 10-1278 that created an HOA Information Officer to focus on HOA complaints.  Appears the State is on top of HOA issues and ensuring homeowner’s rights?

The reality is that all this legislation to date has resulted in the “illusion of good governance for HOA’s”.  Others call it throwing the HOA homeowner under the bus.  The attempt to represent HOA homeowners via legislation was admirable but to date has fallen short.  All this legislation has one thing in common: it is basically non-enforceable from a homeowner’s perspective.  There are no enforcement or penalty provisions in any of this legislation.  Your HOA Board can pick and choose their compliance with this legislation, really!  The Courts are of no help to homeowners unless you have very deep financial pockets to fight the total resources of the HOA and their lawyers (which you pay for via your dues).  Then you will find the Courts highly reluctant to instruct any HOA on what they should do even if stated in their own by-laws.  Oh yes, you will need a lawyer in Small Claims Court as the previous ban on their appearance in this Court was changed  to further turn the hand of justice against the homeowner.

It’s not that our legislatures are unaware of the need for HOA legislative reform.  Our group has talked to many State politicians on this issue but they simply find the issue of little interest or priority and indicate not much support exists in the legislature to gain approval on simple changes to existing State Bills to improve homeowner rights. 

Like all efforts to influence State law, HOA homeowners attempting to gain political influence must compete with well-funded lobbying interests from the real estate and property management company industries/trade groups.  Money (influence) trumps HOA homeowner rights issues especially when this voting block is not organized or informed on the importance of ensuring their own HOA by-laws are enforceable.