Garfield & Hecht, P.C
The New HOA Licensure Rules are Here!
An emergency rulemaking was held on January 2, 2015 to adopt the new HOA manager licensure rules. Effective on January 6, 2015, the new rules were adopted and will remain in effect until May 6, 2015. A formal rulemaking will be held prior to that date in order to adopt permanent rules. We anticipate that the permanent rulemaking will take place in February or March.
Every person who engages in activities defined as a “community association manager” needs to be licensed by July 1, 2015. A “community association manager” is a person who performs two or more of the following “community association management practices” which are defined as:
- receiving, depositing, controlling, or disbursing funds of the common interest community, preparing budgets, or preparing other financial documents;
- assisting in the creation and implementation of a reserve program for the replacement of capital assets;
- assisting in the provision of notice or conduct of meetings of board members or unit owners;
- contracting for or coordinating maintenance of property and facilities of the common interest community;
- conducting property inspections, administering applications for architectural review, and keeping records of violations of the governing documents of the common interest community; and
- performing other services relating to the day-to-day operation of the common interest community
Again, if you perform two or more of the above listed services for compensation, you will need to be licensed. However, there are a few exceptions. The following are some of the statutory exemptions (i.e. a license will not be required):
- Those who perform not more than one of the practices listed above for remuneration or those who perform more than one of the practices listed above for no remuneration;
- Any clerical, ministerial, accounting, or maintenance function not requiring substantially specialized knowledge, judgment, or managerial skill, under the direct supervision and control of a licensed community association manager or of a contractor employed by a licensed community association manager or by the common interest community’s executive board;
We have received numerous questions regarding self-managed associations and how this new law applies. If a board member or other owner performs two or more activities identified as “community association management practices” and receives remuneration (even in the form of forgiveness of association dues), then any such person(s) is required to hold a community association manager license. If a self-managed association does not provide remuneration for management activities performed, then any such person(s) would not be required to hold a community association manager license.
We have also received questions regarding corporations, limited liability companies, association, companies or corporations that perform these services. Who needs to be licensed? The chief executive officer of a business entity that employs individuals or contracts with other entities to provide these services needs a license. Also, any executive of a business entity who has direct supervision or oversight of a person who performs these services also needs to obtain a license.
The actual application form will not be available until April of 2015. However, applicants can begin preparing now. Applicants should ensure that they hold the proper credential or complete 24 hours of classroom instruction in an approved course. Credentials include “CMCA”, “AMS” and “PCAM.” A list of approved courses can be found on-line at the DORA Community Association Website: http://cdn.colorado.gov/cs/Satellite/DORA-DRE/CBON/DORA/1251656165948. Applicants will also have to pass a two-part exam consisting of a state portion and a general portion. Fingerprinting and a criminal background check will also be required. All licenses will be effective for one year. In order to renew the license each year, the applicant must complete 8 hours of continuing education each year or retake and pass the Colorado state portion of the licensing examination.
Licenses will be effective until December 31 of each year. Starting on November 1st of each year and ending on December 31, the renewal period will be open. All fees paid for licensure and renewals are non-refundable. E&O insurance is also required. Coverage must be in an amount of not less than $1,000,000.00 per covered claim with an annual aggregate limit of not less than $1,000,000.00. The deductible must be no greater than $5,000.00.
If you have any questions or require assistance for your HOA, please contact any one of the attorneys listed herein.
Ron Garfield Phone: (970) 925-1936 x200
Chris LaCroix Phone: (970) 925-1936 x204
E. Michael Hoffman Phone: (970) 925-1936 x 232
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) 947-1936 x813