Colorado HOA Forum Promotes 2013-2014 Legislative Agenda

The Colorado HOA Forum (www.coloradohoaforum.com) , an HOA homeowner advocacy group, has published its’ 2013-2014 legislative agenda.  The past legislative session saw very good progress in Colorado HOA legislative reform including licensing and regulatory oversight of property managers, limits on debt collection and foreclosures, and beginning the process to identify an out of court binding dispute resolution process.  The group will now turn its’ efforts to strengthen current law and pursue additional changes in the law to improve HOA governance and disclosure  to home buyers, ending abusive and excessive debt collection practices, and limiting real estate transfer fees when selling a home in an HOA community.   The group’s number one issue remains implementation of an out of court binding dispute resolution process (not mandatory mediation as this only adds time, cost, process, and no certainty of decision in dispute resolution and is available now under current HOA law and has failed homeowners) .  See the group’s web site for more on this issue:

http://www.coloradohoaforum.com/outofcourtbinding.html

2013-14 Goals and Objectives  (an expanded discussion on these proposals can be found at:

http://www.coloradohoaforum.com/2013goalsandobjectives.html

1. Include an out of court binding dispute resolution process in Colorado HOA law

2. Improve upon Colorado legislation that licenses HOA property managers

3. Limit fees and administrative costs 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 home buyers to be provided a copy of the HOA's governing documents, insurance coverage, a current HOA financial statement, the amount of HOA dues, any special assessments current and ongoing, and certify they read them prior to purchasing a home.

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 Offices web site concerning State HOA law. In addition, require each HOA to provide the State's HOA Office a copy of their governing documents, the amount of HOA dues, the CAM hired to manage the HOA, and any special assessments that are current and/or proposed.  This information posted on the State's HOA Office's web site. The HOA is required to update this information when changes occur and review the information annually.

Colorado HOA Forum Sets 2013 - 2014 Objectives

This past legislative session in Colorado resulted in passage of several HOA (Homeowner's Association) Bills. Specifically and noted on the Colorado HOA Forum's website, www.coloradohoaforum.com , were bills that will require HOA property managers to be licensed and regulated, enable xeriscaping within HOA's by homeowners, provide some protection for homeowners against foreclosures when debt is due the HOA, and mandates a study by the State's HOA Office to identify an improved dispute resolution process for HOA complaints. Overall, a victory for HOA homeowners and provides the most significant improvement in HOA governance in decades.  Homeowners are urged to visit this organization's web site for specific information on how these new laws will affect the HOA living environment.  

The Colorado HOA Forum, the State’s largest and leading HOA homeowner advocacy group, will focus its' 2013-2014 legislative efforts on:

1.  Include an out of court binding dispute resolution process in all Colorado HOA law:  http://www.coloradohoaforum.com/outofcourtbinding.html  OUR NUMBER ONE OBJECTIVE

2.  Improve upon Colorado legislation that licenses HOA property managers

3.  Limit fees and administrative costs on HOA debt

4.  Increase the roles, responsibilities, authority, and enforcement capabilities of the Colorado HOA Information Office and Resource Center with specific involvement in resolving HOA homeowner complaints

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

6.  Require realtors and home buyers to be provided a copy of the HOA's governing documents and financial statement and certify they read them prior to purchasing a home

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 the HOA Board members read their own governing documents and information posted on the State HOA Office's web site concerning State HOA law

Buying a Home in a Homeowners Association (HOA): do your homework

No doubt you've heard about the many problems associated with living in an HOA community.  Most of these problems, however, can be avoided with a few simple tasks completed by home buyers prior to closing on the purchase of a home.  Informed home buyers will be happier in their new community vs those who buy and find out later about the restrictions the HOA’s impose.  Almost every new community in Colorado is under some form of HOA governance.  The State has over 8,000 HOA’s and two thirds of the State’s population lives under some form of HOA governance.  It is becoming increasingly more difficult for home buyers to avoid an HOA community.

Before you buy into an HOA you should read the HOA's governing documents (referred to as by-laws).  They explain the controls, restrictions, and covenants imposed upon all residents.  You will be giving up some of your property rights and you must make an informed decision as to whether you can comply with this new living environment.  Furthermore, understand that if you don’t comply with these governing documents you are subject to fines.  You will also benefit by visiting the State HOA Office's web site.  This is a one-stop shopping, unbiased web site for HOA information.  It contains an HOA home buying guide. 

We recommend you review the latest HOA financial statement with particular attention to the HOA's reserve fund.  The reserve fund is simply money in an account accumulated from HOA dues to be used for future planned capital improvements and upkeep of the community.  This fund should be confirmed to be fully funded or you could be moving into a community that is financially distressed with future community maintenance problems.  Also, ask about any known current or planned special assessments.  These are financial obligations placed on homeowners for community improvements and can be material.  This financial obligation is in addition to monthly HOA dues.  Get information on the number of foreclosures in the community and the number of homeowners with delinquent HOA dues.  Delinquent dues of other homeowners must be made up by those who pay and that means you.  We suggest you find out about the percentage of rental properties in the community as this can sometimes have a negative effect on the financial well-being of the HOA, enforcing community standards, and the sense of community commitment by the residents.

  
Understand that HOA governing documents and State HOA laws are very effective in enforcement from the HOA Board's perspective but very weak for homeowners.  Holding your HOA Board accountable, exercising your rights (such as access to financial records and contracts), ensuring open and fair elections of Board members, and disputing abusive practices of a Board can be a very costly endeavor to the homeowner.  The only means of enforcing your HOA homeowner rights is our costly, litigious, time consuming court system that is basically not accessible to most homeowners.  Understand, such court cases will involve your limited funds and time against the HOA’s unlimited financial resources and their paid lawyers (even for simply disputes).   Groups such as the Colorado HOA Forum, www.coloradohoaforum.com, are attempting to change State law to provide HOA homeowners a more affordable and accessible means of HOA dispute resolution that is needed to improve HOA homeowner’s rights.  See our web site for information on this topic http://www.coloradohoaforum.com/outofcourtbinding.html

There are many other home buying tips but if you follow the above you can mitigate many problems otherwise encountered in purchasing into an HOA community.

 

Marijuana Use in Condominiums and HOA's

Increasingly, the Colorado HOA Forum, www.coloradohoaforum.com, is receiving inquiries about the use of marijuana in condominium complexes.  The inquiries involve the odor of marijuana in the hallways and throughout the building.

Since marijuana has become legal in Colorado it is now out in the open and odor emitted from a "joint" can be offensive, intrusive, and affect the quality of life of others (not dissimilar to cigarettes).  This is particularly the case in condominiums or any high-rise in which smoking in the hallways and or in one's own dwelling can result in the smoke and odor entering the residence of all on the same floor and/or throughout the building.

This is not a moral argument on the use of marijuana but addressing a real problem to allow both user and non-user to co-exist in harmony.  HOAs seem to have run into a road block in addressing this problem but are they powerless?

HOAs can't ban the use of pot in one's own dwelling as it is a legal substance and the practice is conducted within private property. However, similar to HOAs setting rules for what color a home can be painted, how big and where an American flag is hung, or how, when, and where political signs are displayed an HOA can similarly make and enforce rules to mitigate the problems with marijuana smoke and odor.  An HOA can prohibit smoking in lobbies of buildings or by the swimming pool area, ban glass/alcohol in the pool areas, or prohibit washing cars in certain areas.
These are all restrictions on legal activities but don't prohibit the activities in a personal dwelling.  So, an HOA could prohibit smoking weed in common use areas such as hallways and building lobbies and entranceways.  Furthermore, rules can be implemented to prevent/mitigate pot smoke from being emitted from a condo into the hallways.

The HOA can direct the resident homeowner to seal the door to stop leakage into the hallways and/or vent the living unit (open the patio door for example) during marijuana use.  This can all be done by claiming that the practice by the homeowner is a nuisance and/or health problem to other residents which under most HOA governing documents allows the HOA to warn and/or penalize the homeowner if the infraction continues.

HOA's should utilize existing governing documents and implied authority to address this problem as mentioned above.  HOAs can also modify existing governing documents/by-laws to implement restrictions and controls that allow both users and non-users of marijuana to co-exist in harmony. No doubt the odor and smoke from marijuana can be a problem in condominiums and high rise buildings.

Marijuana is here to stay in Colorado and addressing usage problems in shared areas and condominium complexes during the initial legalization stage can mitigate problems.  HOA Boards and residents can take the lead in ensuring "pot" usage neither infringes upon the quality of life of others nor interferes with one's right to use weed.

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.