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HB21-1229

Home Owners' Associations Governance Funding Record Keeping

Concerning increased protections for unit owners in the governance of unit owners' associations under the "Colorado Common Interest Ownership Act".
Session:
2021 Regular Session
Subjects:
Housing
Insurance
Local Government
Bill Summary

The bill increases requirements for disclosure and transparency in the operations of unit owners' associations (HOAs) in common interest communities, including:

  • Posting on the HOA information and resource center's website the community's governing documents, and any amendments to those documents, in addition to recording them in the county land records as required by current law ( sections 5 and 17 of the bill);
  • Supplying a list of the HOA's current fees chargeable upon sale of a home in the community to the HOA information and resource center for posting on the center's own website ( sections 14 and 17 );
  • Posting on a website, with the web address communicated annually to all unit owners, the contact information for the HOA and its management company, if any, as well as other information currently required to be disclosed ( section 6 );
  • Specifically authorizing the state internet portal authority to coordinate with the HOA information and resource center to host HOA websites on behalf of registered HOAs ( sections 1 and 17 );
  • Allowing unit owners to place items on a meeting agenda by petition, to record any portion of an open meeting, and to invite a registered parliamentarian to observe executive board elections ( sections 11 and 12 );
  • Limiting the use of proxies by requiring express delegation of a unit owner's voting rights in a signed, dated writing (section 12);
  • Prohibiting any action to be taken at an open meeting by written or secret ballot unless at least 20% of the unit owners in attendance or represented by proxy so request (section 12); and
  • If access to association records required to be provided within 30 calendar days after a request was submitted by certified mail is withheld beyond that period, penalizing the HOA $50 per day for not providing them (section 14).

The bill also requires:

  • Members of an HOA's executive board to either certify that they know and fully understand the HOA's governing documents or complete a free, online basic training course offered or approved by the HOA information and resource center ( sections 8 and 17 );
  • The executive board to commission a reserve study at least every 3 years and, at least annually, to adjust the HOA's finances accordingly ( sections 7 and 10 ); and
  • All contracts for goods or services over a specific dollar amount to be awarded based on a competitive bid process involving at least 3 bids if possible ( section 13 ).

For purposes of the reserve study requirements, HOAs with fewer than 35 residential units that do not employ professional association managers may conduct an internal reserve study.Under current law, the developer of a subdivision (declarant) is not required to transfer control of the HOA to executive board members representing the owners of units in the subdivision until specified percentages of the units are sold to initial purchasers. Section 10 places limits on the amount of time that may pass before the declarant must turn over control of the HOA to unit owners, regardless of the percentage of units that remain unsold, and requires the annual budget to detail proposed allocations to the reserve fund and a history of the prior year's expenditures from the reserve fund. Section 10 also requires any vacancy on the executive board that occurs more than 60 days before the next board election to be filled by a special election rather than by the remaining board members as allowed by current law.Section 9 prohibits the HOA from closing off or limiting use of the common elements except for a finite period of time, with advance notice to unit owners and a statement of the reason for the closure, and prohibits the selective scheduling of maintenance on common elements to immediately benefit certain units in preference over others.Upon the sale of a unit, current law requires disclosure to the buyer of certain HOA documents. Section 14 requires the HOA to ensure that the documents provided to a buyer or posted online are correct and complete, and gives the buyer the right to sue for damages if they are not. Section 15 requires the HOA to disclose whether a loss has occurred to common property that may result in a future assessment against unit owners, and section 16 requires property and casualty insurers to pay claims for loss assessments based on when the assessment is made rather than when the loss occurred, thus avoiding a potential gap in coverage for the buyer of the unit.Section 2 adds specificity to the requirement that HOAs allow installation of renewable energy generation devices (e.g., solar panels) subject to reasonable aesthetic guidelines by requiring approval or denial of a completed application within 60 days and requiring approval if imposition of the aesthetic guidelines would result in more than a 10% reduction in efficiency or a 10% increase in price.Section 3:

  • Amends current provisions regarding political yard signs to specify that the election season during which such signs must be permitted begins 45 days before the first mail-in ballots are sent to voters, rather than 45 days before the official date of the election; and
  • Specifically includes nonvegetative turf grass (also known as artificial turf) among the types of drought-tolerant landscaping materials that the HOA may regulate but not prohibit.

Section 4 requires any dispute between the HOA and a unit owner to be submitted to mediation, either through the office of dispute resolution within the Colorado judicial branch or through other available mediation services, prior to the commencement of any legal proceeding. The HOA's acceptance of a settlement proposed by the mediator does not preclude the HOA from enforcing covenants or rules in any future proceeding.The bill increases requirements for disclosure and transparency in the operations of unit owners' associations (HOAs) in common interest communities, including requiring an HOA to maintain and keep available to unit owners, as part of its official records:

  • A list of the HOA's current fees chargeable upon sale of a home in the community; and ( section 4 )
  • Other information currently required to be disclosed annually under existing law, including financial statements, reserve fund balances, insurance policies, and meeting minutes (section 4);

If access to the association records described above are not provided within 30 calendar days after a request was submitted by certified mail, the HOA is liable for a penalty of $50 per day for not providing them (section 4).

Section 2 adds specificity to the requirement that HOAs allow installation of renewable energy generation devices (e.g., solar panels) subject to reasonable aesthetic guidelines by requiring approval or denial of a completed application within 60 days and requiring approval if imposition of the aesthetic guidelines would result in more than a 10% reduction in efficiency or a 10% increase in price. Section 1 specifically includes nonvegetative turf grass (also known as artificial turf) among the types of drought-tolerant landscaping materials that the HOA may regulate but not prohibit in the backyard area of a unit. Section 3 adds a similar provision to a companion statute.

(Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.)


(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)

Status

Introduced
Passed
Became Law

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Bill Text

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