SECOND Meeting of the Colorado HOA Task Force
Dear Kerry,
| The second meeting of the HB-1105 LHOA Task Force was held at 1:00pm on Tuesday, November 21st, via Zoom. Members of the Colorado Legislative Action Committee (CLAC) both observed and participated in this Zoom call. The following notes were taken from this meeting, which can be watched on the Department of Regulatory Agencies, Division of Real Estate’s YouTube page here. Participants included: Representative Naquetta Ricks, Mickey Sanders (mediator) Connie Van Dorn, Lee Freedman, Richard “Dick” Brown, Peter Siegel, Eric Turner, David Donnelly, Marcia Waters, Melissa Phipps, Lallis Jackson, Nick Altmann, Jose Trujillo, Jesse Loper, and Joyce Akhahenda. Senator Rhonda Fields was not in attendance. The committee had a set agenda to discuss the following items: HB22-1137 Fining Authority and Practices Protection of Association Funds Homeowner Advisory Committee Prior to moving into the agenda, Connie Van Dorn asked if she could speak. She stated that although she is associated with a number of different organizations, the views she expresses on this task force are her own. Below is a synopsis of agenda items and the discussion on each topic: HB22-1137 Lee Freedman expressed concerns about the rushed nature of HB22-1137 and outstanding issues. He explained that 1137 deals with violations and fines that associations are allowed to levy against owners, but problems exist due to lack of clarity in the law. Peter Siegel agrees with Lee. Connie Van Dorn agrees stakeholders knew the bill needed cleanup and the bill passed with unanimous bipartisan support. Everyone knew amendments needed to come, but the risk of amendments at that point risked its passage. This task force can agree on protections for homeowners and legislative cleanup on CCIOA. Representative Ricks agreed with some of the things said but emphasized 1137 was about homeowner protections. The bill was to try to address issues regarding noticing and fines. She stated that she tried to do some cleaning up with homeowners and industry last year, but was unable to get to a place of agreement. She said they need to focus on what we were tasked with on 1105. Lallis Jackson said that homeowners have a responsibility when purchasing a home to understand process and rules within a community. That doesn’t always occur. Joyce Akhanhenda had serious concerns in hearing what has been said in that there is a sense of rolling back 1137 and taking back notice requirements. The reason this task force was created is because this is a problem, and non-HOA home options are limited especially in Denver. She would like more clarity on the process of how HOAs operating prior to purchasing a home in an HOA. Connie Van Dorn proposed that they look at a sampling of governing documents as it states in HB22-1105. Director Waters clarified that there are 13 different sections/categories. We could select a sampling, or you can tell us which HOAs you want. If we are going to look at fines, we should decide as a group what we think about fines philosophically (i.e. revenue budget item vs enforcement), and also look at parameters with which they are established. Fining Authority and Practices Lallis Jackson raised that fining authority comes from governing documents and in no case is it a revenue generating mechanism. It is to deter bad behavior. Governing documents establish guidelines, so they aren’t renegade. She supported a previously mentioned idea regarding escrow of assessments. Representative Ricks said that there are ongoing issues with lack of communication from HOA’s and egregious fines. She said, “we are here to solve homeowner issues.” Protection of Association Funds Lee Freedman asked for additional industry members, experts, and community members to present to this task force to discuss measures to protect funds. Lallis Jackson emphasized the need for alternative dispute resolution. Connie Van Dorn recommended a crystal-clear disclosure anytime a home is purchased what it means to be in a common interest community. CAM licensure, Board of Director certification, and enhancement in CIOAA requirements to register with HOA office were addressed. HOAs would be fined if not and legal penalties if they don’t register. Representative Ricks said there are needs to have proper reserve studies to account for “doubling dues” (Lallis later pushed back and clarified this). Representative Ricks said that to get around 1137 HOA’s are misclassifying assessments. Connie Van Dorn supported the reserves bill with the condition that you can’t borrow from reserves without plan to pay it back. Peter Siegel stressed the need to have transparency of the reserves. Lee suggested a bill requiring insurers In bad faith insurance claims to provide unreasonable notice by association and resultant harm to enforce the intent to the fraud. Richard Brown mentioned that reserves are a critical part of budget planning and that a plan should be put in place to protect the association. Representative Ricks suggested a 3rd party reserve study. Representative Ricks said she has an email from a constituent where dues went from $400-600 in a month and would like a bill to make reserve study be mandatory. Peter Siegel added that he would like a requirement to share the reserve study and annual balance amount. Lallis Jackson said good management provides the budget and reserves information already. Homeowner Advisory Committee Connie read the original bill that said that the task force may have a homeowner advisory committee. She said the committee only has two months, so she recognizes that this might not be possible. She recommended a 4-hour session for public input. Representative Ricks agreed that one whole meeting was allocated for the public. Lee Freedman said that he wants to get different people in the industry so the group can have questions. Interim Committee Connie Van Dorn summarized her reasoning and wants to continue this work through an interim committee. She said that they have missed the deadline for a 2024 committee. Representative Ricks said that there will be topics not resolved in the short amount of time with the task force and supports an interim committee. Lee Freedman said that he felt there is more work to be done with this task force before considering an interim committee. The Task Force will have the public meeting on January 2nd from 1:00pm-5:00pm. The Department of Regulatory Agencies, Division of Real Estate will reach out to various HOAs for the specifically listed governing documents in the bill to review at the next meeting. The stated goal is to get documents 2 weeks prior to the next meeting. Other agenda items included: review of homeowners complaints (Connie will share complaints), public rights of way bill (Connie Van Dorn disagreed that this should fall within the purview of this task force), Government Assistance programs to include homeowner assessments, and CCIOA review. The next meeting is scheduled for December 20th from 1:00pm-4:00pm. You can register to participate in the meeting here, or watch on YouTube here. The Colorado Legislative Action Committee believes that the task force will most likely not get to a solutions path in the time remaining for their meetings. Many items continually brought up such as manager/management company licensing that sunset a few years ago and reserve funding/study bills that were previously vetoed by Governor Polis are stagnating the process to vet more critical items such as the clean-up needed for HB22-1137. |
| CLAC encourages everyone to sign up to attend these meetings to gain an understanding of the function of the task force and what it is expected to achieve. More information can be found on Colorado’s Department of Regulatory Agencies webpage here. CLAC is committed to educating and providing information to the Task Force on the general understanding of CCIOA. It is our hope that prior to subsequent meetings, education opportunities are presented for task force members to have a clearer understanding of how HOAs operate under CCIOA. If you have any specific questions regarding this update, please contact CAI’s Colorado Legislative Action Committee chair Danaly Howe at danalyclac@ccgcolorado.com. Sincerely, Community Associations Institute Colorado Legislative Action Committee (CLAC) government@caionline.org |
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