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First Steps Toward Active Enforcement of CCIOA: HB13-1134

In our December newsletter article about HB1237 and how it relates to email, I postulated that CCIOA enforcement mechanisms were not far off. On January 18, 2013 in the Colorado House of Representatives, Representative Su Ryden introduced House Bill 13-1134 (“HB 1134”) which takes some of first steps toward active enforcement of CCIOA. The Bill is sponsored in the Senate by Senator Morgan Carroll. The bill’s goal is to expand the authority of the HOA Information Officer and to empower the HOA Information and Resource Center to perform certain regulatory and investigative actions, including an affirmative obligation to report suspected CCIOA violations to the Director of Real Estate.

Currently the HOA Information Office does not have any regulatory or investigative power. As it exists, the Office serves primarily as an information hub; it is permitted to aid in the registration process, provide information, collect complaints and publish an annual report on the complaints. The Bill proposes to grant the Office, and the HOA Information Officer, the following additional duties:

        Expanded Informational Duties:

1. Compile a database of registered associations, which includes the name, address and telephone number of each Association;

2. Coordinate and assist in the preparation of educational and reference materials, including materials to assist unit owners, Boards of directors, Board members and Association managers in understanding their rights and responsibilities.

3. Monitor changes in federal and state laws relating to HOAs.

4. Provide information on the Division of Real Estate’s website, including a “Frequently Asked Questions” resource.

        Discretionary Exercise of Authority by HOA Information Officer:

The bill provides that the HOA Information Officermay:

1. Request records from HOAs.

2. Recommend rule changes concerning the filing, investigation and resolution of complaints.

3. Refer disputes between the Division, unit owners, boards of directors, board members and managers to alternative dispute resolution services.

4. Offer to mediate disputes between unit owners, boards, board members, managers and other affected parties in instances where no formal action has been taken, to offer to mediate disputes.  In this role, the HOA Information Officer shall act as a neutral third party, and shall not purport to give legal advice to a party.

        Mandatory Obligations of the HOA Information Officer

The bill provides that the HOA Information Officer shall:

1. Report promptly to the Director of the Division of Real Estate regarding suspected violations of the act or rules promulgated under CCIOA.

2. Act as a liaison between the division, unit owners, boards of directors, board members, and association managers.

3. Assist unit owners, boards of directors, board members, and association managers with utilizing the procedures and processes available to them to resolve conflicts within the association.

4. With regard to HOA elections, the HOA Information Officer shall:

a.     Monitor and review associations’ procedures and any election-related disputes that arise;

b.     Recommend enforcement action if the HOA Information Officer reasonably believes election misconduct has occurred; and

c.     Appoint an election monitor and conduct the election of directors for an HOA if 15% of the total voting interests in the association, or 6 unit owners, whichever is greater, petition the HOA Information Officer to do so.

The Bill also would change registration requirements for HOAs.

        Registration Required for All HOAs

The bill would require that all HOAs (whether pre- or post-CCIOA) must register with the Division of Real Estate.

        Fee Adjustments for Registration

Currently, there is a $50 cap on annual HOA registration fees. The bill gives the Director of the Division of Real Estate the authority to modify the annual registration fee, abandoning the $50 cap, by determining a per unit annual fee and multiplying that fee by the number of units in an association which is registering. Such fee must be sufficient to cover actual costs.

        New Information Requirements at Time of Registration

The bill would require disclosure of the following at the time of registration:

1.  The name of the association as shown in the Secretary of State’s records;

2.  The name of the association’s management company or agent, or any other agent the Board has designated for purposes of the registration;

3.  A valid telephone number for the association or its association’s management company or agent; and

4.  The number of units in the association.

This bill has merely been introduced and is not yet Colorado Law. The proposed bill would substantially bolster the duties, responsibilities and powers of the HOA Information Office and its Information Officer. Some of those new powers, such as reporting suspected violations of CCIOA, demonstrate the ongoing perceived need to equip CCIOA with enforcement mechanism.

John HoltComment