The 2020 legislative session has begun and is already introducing new bills that may impact community associations in Colorado. Below are the nine bills introduced in January:

  1. HB20-1046 Private Construction Contract Payment Requirements: 

HB20-1046 adds new requirements for construction contracts of at least $150,000.00, but does not apply to contracts with public entities or to contracts with one multi-family dwelling of no more than 4 units or one single-family dwelling. Under this bill property owners are required to make partial payments to the contractor of the amount due as set forth in the contract at the beginning of each month or as soon as practicable at the end of each month. A property owner must pay the contractor at least 95% of the value of satisfactorily completed work. Property Owner must also pay the withheld percentage within 60 days after the contract is considered satisfactory. The contractor would be required to pay subcontractor within 30 days after receiving payment for the work performed under a subcontract. This does not include the withheld percentage that must not exceed 5%. Subcontractor would be required to pay supplier, subcontractor, or laborer who provided goods, materials, labor or equipment within 30 days after receiving payment. Subcontract must also submit to contractor a list of the suppliers, sub-subcontractors, and laborers who provided goods, materials, labor, or equipment for their work. If a party fails to make the payments as required above, that party is responsible for paying a 1.5% interest per month until the debt is paid in full. If a lawsuit is brought to enforce the bill the prevailing party is awarded attorney fees and costs.

  1. HB20-1064 Public Utilities Commission Study of Community Choice Energy:

HB20-1064 proposed two studies to help lay the groundwork for the adoption of “community choice energy” (“CCE”). Under CCE the community will have the opportunity to purchase electricity at wholesale through suppliers rather than local investor-owned electric utility. This could have the potential for communities to save money without disrupting local utility sources. The first proposed study would be conducted by an independent energy expert under the guidance of the public utilities commission (“PUG”) to examine the financial and technical requirements needed for CCE to be feasible and beneficial. The second study would be conducted by PUG. They would obtain firsthand knowledge from other states which already implemented CCE. The study would provide testimonials and documentation form those states to help identify best practices and recommend legislative changes that would allow CCE to function well in Colorado if adopted. 

  1. HB20-1146 Conservation Easement Transparency:

HB20-1146 would require property owners to sign a disclosure form acknowledging the consequences and risks of creating an easement. The bill requires the commissioner of agriculture to work with local government officials to create a database of conservation easement. The commissioner would be required to update the information annually and make the database available to the public for no charge on the department’s website. Also available on the website will be forms tracking each easement consisting of all agreements, amendments, or transfers submitted for that parcel. All forms must be submitted to the commissioner of agriculture and the county tax assessor of the county as they are responsible for making this information available on their website. A landowner can elects to either extinguish the conservation easement for which the credit was claimed or received an equitable relief payment from the state for any donation to the conservation easement that is disallowed for any state income tax credit claimed. If elected to extinguish, the department of revenue will reimburse the taxpayer for all reasonable costs incurred by the landowner in establishing the donation as well as any federal or state income tax liability incurred by the taxpayer. 

  1. HB20-1155 Higher Efficiency New Construction Residence:

HB20-1155 changes home builder from offering one of the three higher efficiency devices to offer all options. The higher efficiency devices are: a solar panel or a solar thermal system; prewire or pre-plumb the home for these systems; or a chase or conduit wire or plumb the home for the system in the future. It also requires the home builder to offer one of the following options to a buyer of a newly constructed residence: an electric vehicle charging system; upgrades of wiring to accommodate future installation of an electric vehicle charging system; or a 208 to 204 volt alternating current plug in located in a place accessible to a motor vehicle parking area. Home builder must also to offer electric heating options.

  1. HB20-1200 Sunset Homeowners Association Information and Resource Center:

Under HB20-1200 the HOA information and resource center will extend until 2025 and creates a dispute resolution and enforcement program. Under the programs the division of real estate is allowed to collect and annually report upon additional data specifically related to disputes and violations of the CCIOA. They are allowed to produce and distribute education materials concerning the Act and the programs. They will also be able to take complaints, conduct investigations, make determinations, impose penalties, and participate in administrative dispute resolutions when there is an alleged violation of CCIOA of the program. 

  1. SB20-093 Consumer and Employee Dispute Resolution Fairness:

SB20-093 enacts the “Consumer and Employee Dispute Resolution Fairness Act”. The Act prohibits the waiver of standards and challenges for evident partiality prior to a claim being filed and requires any waiver to be in writing. The rights of a party to challenge an arbitrator based on evident partiality is waiver if not raised within a reasonable time of learning of the information leading to the challenge. However, such right is not waived if cause by the opposing party. The bill also established ethical standards for arbitrators and requires public disclosures by the arbitrator. The ethical standards still protects confidential information. The bill also requires arbitrators to make additional disclosures of information that might affect the arbitrator’s impartiality. If a court vacates an award due to evident partiality or failure to make required disclosures the bill provides how attorney fees and other reasonable expenses are to be awarded. The bill also provides the standard contract forms involving a consumer or employee for specified terms that are unenforceable against public policy including an unenforceable terms constitutes a deceptive trade practice under the “Colorado Consumer Protection Act” and how cost-shifting provisions are to be interpreted. 

  1. SB20-109 Short-term Rental Property Tax:

SB20-109 purposed property tax classifies improvement used to provide short-term stays. The definition of residential improvements excludes short-term rental units therefore it is classified as nonresidential property. A short-term rental unit is a building or a portion of a building that is designed for use primarily as a residence for a person, a family, or families, which is leased and/or available to be leased for less than 30 days and is occupied by the owner for less than 30 days in a year.

  1. SB20-126 Allow Home Child Care in Homeowners’ Association Community:

SB20-126 would allow a HOA organized under the CCIOA to operate a licensed family child care home, notwithstanding anything to the contrary in the community’s governing documents. 

  1. SB20-138 Consumer Protection Construction Defect Time Period:

SB20-138 increases the statutory limitation for actions based on construction defects from 6 to 10 years. It also allows tolling of the limitation period on any statutory or equitable bases and requires tolling of the limitation period until the claimant discovers not only some physical manifestation of a construction defect but also its cause.