Colorado legislators propose HOA reform bills

Article Courtesy of The Denver Post

By Howard Pankratz

Published March 29, 2013 

State legislators on Wednesday introduced a bipartisan homeowners association reform package designed to bring Homeowners Associations and their managers under state regulation.

The legislation is primarily aimed at holding HOA managers to stricter standards and reigning in HOAs' debt-collection practices.

In 2010, after receiving a deluge of complaints from citizens, Colorado legislators voted to create an office to gather complaints and help homeowners.

In its 2012 annual report, the HOA Information and Resource Center, a part of the Colorado Division of Real Estate, said it received 576 complaints from 309 different homeowners and residents. That included 153 complaints against managers and 423 against HOAs and boards.

One of the proposed bills, House Bill 13-1277, would require that community managers be licensed under the Division of Real Estate within the Department of Regulatory Agencies. To apply for a license, a an applicant would be required pass an exam demonstrating a working knowledge of standard budgeting practices and laws concerning consumer protection, fair debt collection and nonprofit organizations.

The Community Associations Institute, the professional trade association for HOAs, said Wednesday that it has had an open dialogue and exchange of ideas with the sponsors of the bills.

"We look to the sponsors to develop HOA-related legislation that is balanced, reasonable and best serves the people of Colorado," the group said in a statement.

Rep. Angela Williams (D-Denver) is co-sponsoring another bill, HB 13-1276, that would require HOAs to establish debt collection policies modeled after the Colorado Fair Debt Practices Act.

"This bill will require HOAs to establish a consistent debt collection policy," she said, noting that, on occasion, an HOA may approve a special assessment requiring all homeowners to contribute additional large sums over multiple years to cover costs.

Under the act, HOAs would be required to provide clear information about the special assessments and offer payment plans to struggling homeowners. HOAs would not be allowed to file liens until a homeowner had been given at least six months to pay off the special assessment, except when the HOA's executive board had formally approved a foreclosure action.