HOA Property Manager Licensing Nabs First Culprit, but.....

Colorado implemented an HOA Property Manager (PM) Licensing Program July 1, 2015.  The intent is to provide home owner protections against unscrupulous business practices in the HOA property management industry.  DORA, the agency managing the program, nabbed its' first culprit this past week after the program has been functioning for nearly six months.  This is some good news for home owners and a flag waving and press release event for DORA.   The Colorado HOA Forum, Colorado's largest and most recognized HOA home owner's advocacy organization, was a force to promote licensing and applauds this single event.

As always seems to be the case with DORA and HOAs and HOAs and legal enforcement of HOA related law, all that glitters is not gold.  Let us bring the home owner up to date on what has and is really happening with the licensing program:  serious backlog in processing complaints; known unlicensed PMs to DORA have gone months without any corrective action; although the recent culprit was prevented from practicing there should have been accompanying fines and recommendations for criminal prosecution; DORAs feedback to complainants (home owners) is slow, inadequate, or non-existent; DORA implemented licensing rules that favor the industry it is supposed to regulate thus making PM responsibilities and accountability more difficult to prosecute;  the web site makes filing complaints and looking up licenses less than an easy and accurate experience ignoring suggestions for improvement;  the law needs to be changed to provide financial and credentials relief to the smallest of PM's that in some cases the cost to acquire a license is more than a year's income; and requirements for full disclosure of HOA Transfer fees charged home owners by PMs involves an insulting definition of full disclosure, a one liner on a home closing statement, that ensures home owners can't challenge the legitimacy of this abusive and illegal fee that cost home owners nearly $10 million a year.

The licensing program to date has been more a fees collection, business cost imposition, and tool for special interests to sell educational classes than one of consumer protection.  The licensing law and DORA rules have been unduly influenced by interest groups representing the PM industry,  the Community Association Institute (CAI), with home owner input scant.  DORA has had well over a year to implement this program and home owners deserve more.  The law can and must work and home owners will benefit.  Legislation is needed to rectify deficiencies in the law to make this program provide the consumer protections intended.  Our organization will continue to work with legislators to have the voice of home owners and small businesses heard.

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).

HOA Legislation Needed for Majority of Colorado Home Owners

Homeowners Association (HOA) issues are not the most sexy issues but are the most underreported issues affecting a majority of Colorado home owners. These issues are also mostly neglected by our legislators who don't fully understand the economic and property rights issues associated with HOAs. Colorado has numerous, definitive, and comprehensive HOA laws but presently these are mostly unenforceable from the home owners perspective. HOA home owners pay fees and assessments upwards of $10 million a year to sell their homes that are not applicable too other home owners. These home owners are also unknowingly (until they receive a bill) subjected and vulnerable to major special assessments and fees without their knowledge or approval and if not paid can be foreclosed upon. It is also the only living environment that requires a home owner to go to court using their limited funds to defend their rights under the law only to have their own money (HOA dues) used in court by the HOA to defeat such rights. HOA legislative reform is needed, is non-partisan, and will affect the lives of Coloradans equal to any legislation passed. Our organization, Colorado HOA Forum, www.coloradohoaforum.com, will again be seeking legislative sponsors and media interest for this highly affective issue that is more material than sensational in the lives of our citizens.