Courtesy of Your Hub
President of the Colorado HOA Forum
August 23, 2020
Nearly 60% of Colorado residents live under HOA governance,
and most HOAs are managed by HOA property management companies not HOA Boards.
There is no regulatory or State oversight of HOAs, HOA Boards or property
management companies. Disputes between HOA homeowners and property management
companies (and their HOA Boards) must be resolved through a costly, litigious
and time-consuming process matching the unlimited resources of the HOA/management
companies against the limited means of homeowners.
State HOA laws are extensive and comprehensive but provide NO means for
enforcement. The State HOA Office and Department of Regulatory Agencies (DORA)
have received thousands of complaints over the past five years and most involve
management companies directly or indirectly. A well-written property manager
licensing law with a dispute resolution process in an out-of-court venue within
DORA would bring accountability and mitigate abusive practices to the property
management industry and thus provide effective consumer protections.
HOA property managers (aka Community Association Managers, or CAM) were licensed
in Colorado until June 2019 when Gov. Jared Polis vetoed a Bill to extend this
program. Our organization, Colorado HOA Forum, supported this veto for two
standout reasons: 1) the Bill was written by the industry it was supposed to
regulate and 2) consumer (HOA homeowners in this case) protections were weak and
lacked enforcement and there were simply too many holes in the area of
accountability to hold management companies liable for their actions.
HOA property manager licensing did provide a means to add a higher degree of
competency to this profession with educational requirements, precluded those
with criminal records from entering the profession and provided for an
affordable and accessible dispute resolution process to resolve HOA and HOA
homeowner disputes with CAMs. The program will again go through a “Sunrise”
process in 2020 to evaluate the need to regulate and to ensure any regulation
(licensing) provides consumer protections to justify State oversight.
The No. 1 consideration in this upcoming Sunrise Review must be to ensure the
industry to be regulated doesn’t have undue influence in writing any Review
report or proposed legislation. DORA should choose a non-industry licensing
proposal to be the lead in this Review and in developing requirements and not
simply copy that which the industry proposed previously.
Other issues to be corrected from the previous program to ensure consumer
a) Previously and in an unprecedented legislative action, a
private, profit making organization got their educational classes promoted
within the CAM licensing Bill implying a “false” sole source to complete
b) The costs to complete educational requirements and licensing fees chased many
small CAMs to leave the industry or practice without a license and further
discouraged new entries into the profession. Fees and requirements must be
adjusted and altered to not burden the very small CAM.
c) The rules of conduct and business behavior must be specific and not allow for
CAMs to dodge all accountability for violations of State HOA law by simply
saying they only did what the HOA Board instructed
d) there must be requirements to contain excessive, unjustified and undocumented
fees levied by CAMs on home sellers that require identifying the work performed
to earn the fee and providing the home seller with a detailed invoice. These
fees cost HOA homeowners over $15 million a year, require no documentation to
the payee, if not paid can hold up a home sale and are not limited to or related
to work completed.
e) The law must contain direct statements that CAMs must comply with State HOA
laws and HOA governing documets and must act to advise and correct HOA Boards
when out of compliance and not simply be able to look the other way
f) limits must exist on the number of HOAs/homes a given CAM can manage to meet
licensing requirement responsibilities and to ensure quality service to the
g) those who own or hold high level positions in a CAM business must be licensed
and accountable for the actions of CAM employees.
Will DORA again pick industry representatives to lead the licensing effort and
have history repeat itself? HOA law in Colorado has a tainted history on lack of
enforcement with all of the 13 HOA laws lacking any viable means of enforcement.
HOA laws are administrative and provide little in the way of consumer
protections. State sanctioned studies have repeatedly indicated the weaknesses
and needed corrective actions in HOA laws but industry influence has
consistently killed reform efforts. A good example of this is the State HOA
Office. Sounds good but the Office has NO oversight, investigative or
enforcement authority: it is administrative only providing no consumer
Property manager licensing would resolve most HOA homeowner problems with both
their HOA Board and management company as CAMs mostly manage HOAs. Making CAMs
responsible and accountable in their duties under licensing that includes their
ensuring HOA Boards are complying with State laws and HOA governing documents
would close the door on most abusive practices and complaint resolution. An
effective dispute resolution process and penalties for non-compliance with
licensing rules would immediately make HOA laws and HOA governing documents
effective from the homeowner’s perspective. We at the Colorado HOA Forum will
continue to work for HOA reform and an effective HOA property manager licensing