Garfield & Hecht, P.C. HOA Legislative Update
From HOA Budgets to Community Association Managers
Once again our legislature has modified the Colorado Common Interest Ownership Act in Colorado (“CCIOA”). The newest change involves House Bill 18-1342 (effective July 1, 2018) and Pre-CCIOA communities budgeting process. A Pre-CCIOA association is a community created prior to July 1, 1992. Only portions of CCIOA are applicable to Pre-CCIOA communities. This new law makes the budgeting process applicable to most Pre-CCIOA communities with a few exceptions listed below:
The new law requires that all common interest communities, including Pre-CCIOA communities (which were previously exempt) follow the budget process in C.R.S. §38-33.3-303(4). Specifically, C.R.S. §38-33.3-303(4) requires that the association’s board of directors adopt the annual budget. Then, within 90 days after the board has adopted the budget, the board must mail or otherwise provide a summary of the budget to all owners and set a date for an owner’s meeting to consider the budget. This meeting (and the notice of such meeting) must take place after the delivery of the budget and in accordance with the associations Bylaws. In order to overturn a budget, a majority of the owners (or any larger percentage as specified in the declaration) must veto such budget. In the unlikely event of a veto, the last budget proposed by the board and not vetoed by the owners is effective until a new budget goes through the process without being vetoed. The only associations exempted from this budgeting process are those associations formed before July 1, 1992 where such association’s declaration sets a maximum assessment amount or limits increases in an annual budget to a specific amount and the budget proposed by the board does not exceed the maximum amount or limits set in such declaration.
Community Association Managers (“Managers”) were also debated during this legislative session. Please recall that House Bill 13-1277 (effective January 1, 2015) required, among other things, Managers to submit to background checks and to pass a licensure test. However, the law was set to sunset on July 1, 2018. That means that once that date passed and unless further legislative action is taken to extend the law, the law ceases to have effect. House Bill 18-1175 sought to extend the program but the bill was postponed indefinitely. Therefore, the program is presently scheduled to be discontinued.
The program will actually end on July 1, 2019 as it goes through a wind-up procedure. After July 1, 2019, the Colorado Department of Regulatory Agencies will cease all activities regarding the program. This means that Managers must continue to comply with the program through July 1, 2019 or risk fines and penalties. There is a possibility that the program can still be extended during the next legislative session. In the event that the program is continued, we will provide an update.
Please contact any one of the attorneys noted below if you have specific questions regarding this update or CCIOA’s applicability to your HOA, or if you would like our assistance in complying with these new requirements.
Ron Garfield Phone: (970) 925-1936 x200
Chris LaCroix Phone: (970) 925-1936 x204
Kursten L. Canada Phone: (970) 949-0707 x853
Tracy L. Kinsella Phone: (970) 949-0707 x854
In Glenwood Springs:
David H. McConaughy Phone: (970) 947-1936 x810
Mary Elizabeth Geiger Phone: (970) 949-1936 x813