h_sa_2017a_2017-04-20t12:03:28z0 Hearing Summary

Date: 04/20/2017

Location: LSB A

12:03 PM -- SB17-156



Representative Wist and Representative Saine, co-prime bill sponsors, presented Senate Bill 17-156. The bill requires that a homeowners' association (HOA) use mediation or arbitration before a lawsuit can be filed in disputes involving construction defects against a development party. If an HOA had governing documents that required mediation or arbitration at the time of construction, the HOA must adhere to that original policy in construction defect cases.



In addition to submitting to mediation or arbitration before filing a lawsuit, the HOA's executive board must send an advance notice to all unit owners that includes a general description of the claim, the relief sought, and a good-faith estimate of the benefits and risks involved in a format outlined in the bill. The HOA's executive board must obtain signed, written consent from a majority of the unit owners acknowledging that the owner has received the notice required under the bill and approves of the board's proposed action.



Prior to the purchase and sale of property in an HOA, the bill requires that a disclosure notice inform the purchaser that he or she is required to become a member of the HOA, and that the community bylaws may require that certain disputes be resolved by mandatory binding arbitration.



The bill also adds notice requirements for lawsuits initiated by HOAs in matters other than construction defect claims. Specifically, the HOA must provide notice to unit owners at least 30 days prior to commencement of the legal action.