Yours? Mine? Ours?

HOA

And How To Avoid ThemSally Yerger

Colorado Civil Rights Division

What is a Common Interest Community?

• A community where portions of the real estate are designated for separate ownership and the remainder of which is designated for common ownership solely by the owners of the separate ownership portions.

• A community in which the property is owned by an association with each member belonging and having exclusive right to possession of a unit.

• A “Phased” community: the developer still owns some units or land and private owners own other units or land.

SB 100 & SB 089: Effective 1/1/06

Impacts all aspects of common interest community governance,

including:

• Meetings• Policies• Record-keeping

• Document amendments• Use Restrictions• Elections

Seller shall provide or authorize the HOA to provide upon payment of

the HOA’s usual fee:

All of the common interest community’s governing documents and financial documents, as listed in the most recent available version of the contract to buy and sell real estate.

Seller Disclosures to Buyerbefore title deadline:

• The property is located in a common interest community

• The new owner of the property required to be a member of the HOA

• New owner subject to the bylaws, rules and regulations of the community

• New owner has a financial obligation to pay assessments

• Any changes to the property subject to review by the architectural committee

Organization of HOA

• Association may be set up as nonprofit, not-for-profit or limited liability company

• Structure does not affect substantive rights under the Colorado Common Interest Act

Enforcement of HOA Rules

• Gives HOA the right to require “reasonable attorney’s fees” for unpaid dues or other collection matters without having to file a legal proceeding.

• Any unit owner can “seek” reimbursement for attorney’s fees without going to court if they are harmed by another’s failure to comply with HOA rules

Attorney’s Fees

• The court is to award attorney’s fees and costs to the prevailing party on any claim or defense on an enforcement action

• This means filing a lawsuit

• If the individual owner prevails, they will be awarded attorney’s fees

• The association cannot allocate any portion of its attorney fees to that owner

Alternative Dispute ResolutionAlternative dispute resolution such as

mediation or arbitration encouraged but not required, as an alternative to law suits to resolve disputes between the association and an owner. Written HOA policy for such dispute resolution

is required.

Meetings

• Notices of owner meetings must be physically posted in a conspicuous place to the extent feasible

• Electronic posting or electronic mail notices may be given

• Owners may speak at “appropriate” times designated by the HOA board

• Reasonable number of speakers per issue • Reasonable time limits on speakers may

be imposed

Amendments to Declarations

• Declarations may not require approval of more than 67% of owners

• If first mortgagee consent is required for amendments, association must send dated written notice and copy of proposed amendment by certified mail to each first mortgagee.

Amendment Publication

Association must also publish a notice of the amendment at least twice, one week apart, in a newspaper of general circulation in the county where the property is located. If the first mortgagee does not respond in 60 days, the mortgagee is deemed to have approved the amendment.

Responsible Governance Policies

• Association must maintain accounting records using generally accepted accounting principles

• Adopt policies, procedures and rules and regulations re collections, conflicts of interest, conduct of meetings, enforcement of covenants, notice and hearing procedures, scheduling of fines and amendment of policies and rules.

Public DisclosuresRequired within 90 days of any

change:• Name of association and community• Name of designated agent or management

company• Address and Phone number for both association

and management company• Initial recording date of declaration and

recording information• Any changes to be made available in 90 days

Info to be made available within 90 days after end of fiscal year:

• Date on which fiscal year begins

• Operating budget• Current assessments• Annual financial

statements• Minutes of board for

preceding year• Amounts in reserve

• Results of any audit• List of any association

insurance policies• Bylaws, Rules &

Regulations, Declarations

• Responsible governance policies

Audits

• Books and records shall be subject to an audit or review at HOA discretion, using generally accepted accounting standards by a qualified person

• Audit is required only if annual revenues or expenditures are $250,000

• Or audit is requested by 1/3 of owners

Education Requirements • Board members may be compensated for

expenses related to meetings and seminars on responsible governance.

• Association is required to provide education to owners on an annual basis as to general operations of the association and the rights and responsibilities of owners.

Architectural Changes

• Applications for architectural changes or landscaping changes must be made in accordance with standards and procedures set forth in the declaration, bylaws or rules and regulations

• No arbitrary or capricious implementation

XERISCAPING

Any Covenant which requires only turf, or prohibits xeriscaping, declared contrary to public policy and unenforceable.

However, HOA can take action against a homeowner who allows turf to die.

Can’t ProhibitPatriotic Expression

• American Flag

• Service Flag

• Political sign 45 days before election

• 7 days after an election

Firefighting Measures: Can’t Prohibit

• Parking of vehicles by volunteer firefighters

• Removal of trees, etc., to create “defensible space” for fire mitigation

• Replacement of cedar shake with non-flammable roofing materials.

Other Provisions

• Voting

• Board member conflicts of interest

• Escrow agreements

• Association Records

• Homeowners Insurance

• Disclosures regarding receipt of governing documents

Withdrawal from a merged or consolidated community

• Criteria outlined in Colorado Revised Statutes § 38.33.3-221.5

• Community has been operating for 25 years continuously

• Number of owners comprising the association must be 15% or less of the total number of unit owners in the merged or consolidated community

What Housing is Protected by State Law?

State law covers all property and extends protections to housing projects of less than four units except:

• In connection with familial status and rooms for rent in a single family home occupied by owner

• Non commercial housing by clubs and religious groups for members only

Protected Classes

Federal law• Race• Color• Religion• Sex• Handicap• Familial Status• National Origin

State Law• Marital Status• Creed • Ancestry

Local ordinances• Age• Military Status• Sexual Orientation • Gender Variance

What kinds of discriminatory acts are committed by HOA’s?

• Refusal to accommodate a person with a disability – including assistance animals

• Differential terms and conditions of ownership or tenancy

• Discrimination against group homes

• Refusal to allow reasonable modifications

• Harassment or interference based on protected class