HOA Trouble In Colorado

guest blog by Stan Hrincevich   (coloradohoaforum.com)

Colorado Springs Town Hall Meeting: let us know how you can help get the word out about this meeting on Feb 13: contact legislators, post flyer at your HOA, local media, etc.

Construction Defects Legislation: here we go again with the Denver Post exclusively contacting the Community Associations Institute (CAI) to represent homeowners’ interests in how homeowners’ money is used in litigation. Below is our letter to the editor of the Denver Post and copied to legislators:

“The Denver Post again allows those making millions of dollars from HOA Construction Defects (CD) litigation to represent the voice and rights of homeowners and distort the debate in CD legislation reform. No input is accepted from any recognized homeowner’s organizations. Once again, the only point person on homeowner’s rights is none other than the Community Associations Institute (CAI). The CAI represents the interests of property managers and HOA lawyers, NOT HOMEOWNERS! If CD legislation is ever be explained in a truthful, balanced, and productive manner it must first get by the pervasive CAI smoke screen.

First, almost all HOAs created in the past 15 years mandate in their Declaration that arbitration must be used in CD dispute resolution. Of the 8,500+ HOAs in the State most are beyond the statute of limitations and cannot sue. As a percentage or relative number of all HOAs, those that changed their Declaration (at the encouragement of HOA lawyers) is very, very small. Thus, precluding HOAs from changing their declaration and infringing upon homeowner’s rights is a weak argument. Furthermore, a recent Colorado court case has ruled HOAs can be prevented from changing their Declaration. The CAI would have the public believe the inability to change the Declaration will have a profound impact on homeowners’ rights but the reality is that it would mostly impact the ability of HOA lawyers to promote litigation in our costly court system.

The other issue involves requiring homeowners to vote on the approval of the use of their own funds in CD litigation. Currently, any HOA Board at the encouragement of their attorney can spend unlimited HOA funds on litigation without the knowledge or approval of homeowners. The CAI opposes this empowerment of homeowners as it would effectively reduce litigation.

We at the Colorado HOA Forum offer the following CD legislative proposal to mitigate litigation and empower homeowners: “HOA homeowners are required to be apprised of and vote on the use of HOA funds in all litigation.” Why is this so difficult?”

 

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About

Ward Lucas is a longtime investigative journalist and television news anchor. He has won more than 70 national and regional awards for Excellence in Journalism, Creative Writing and community involvement. His new book, "Neighbors At War: the Creepy Case Against Your Homeowners Association," is now available for purchase. In it, he discusses the American homeowners association movement, from its racist origins, to its transformation into a lucrative money machine for the nation's legal industry. From scams to outright violence to foreclosures and neighborhood collapses across the country, the reader will find this book enormously compelling and a necessary read for every homeowner. Knowledge is self-defense. No homeowner contemplating life in an HOA should neglect reading this book. No HOA board officer should overlook this examination of the pitfalls in HOA management. And no lawyer representing either side in an HOA dispute should gloss over what homeowners are saying or believing about the lawsuit industry.

4 thoughts on “HOA Trouble In Colorado

  1. Deborah Goonan

    Stan, I am with you on empowering *real* owner-occupant homeowners to vote on whether or not the Association should pursue costly litigation.

    Homeowners should have the choice between arbitration or civil litigation, and should not be limited or forced into one or the other without full disclosure and an opportunity to participate in the decision-making process.

    However, it is important that any legislation proposed and passed does not allow self-interested investors or developer affiliates to vote on litigation, especially if it involves construction defects! There is an inherent conflict of interest in this situation, which is more common than most consumers would think.

    In other words, CAI and others must stop putting the property rights of investor- or developer-owners (who tend to own multiple units and therefore multiple voting interests) above the rights of owner-occupants!

    Reply
  2. Cindy

    Frankly, I would like to see HOAs outlawed, especially the worthless individual-family-homes variety. I live in one; the abuses by the HOA board itself have been significant (our landscaper hasn’t been paid for FOUR YEARS!!!) and we are trying to DISSOLVE our HOA.

    Problem is getting the city to take the common areas. Our HOA does NOT have any swimming pool, tennis courts, parks, or anything other than some sidewalks, grassy areas & grassy “islands”.

    Any help in figuring out how to get the city to take their land back would be appreciated. I’ve begun to realize what a rip-off the assignment of common areas to HOAs is, as the city benefits from having someone else assume responsibility for areas that the city would be responsible otherwise.

    Reply
    1. Deborah Goonan

      Cindy, you are correct! The reason the HOA was formed in the first place was so that the city (or county) would be able to collect property tax revenue without having to provide the full range of services on common areas.

      Does your HOA take care of the streets, too? (Some do, some don’t) What about the storm drainage or a retention pond?

      Can you sell the parcel of grassy land to a private owner? Or maybe divide the parcel among neighboring lots?

      If you are trying to hand over roads or a storm water pond to the city, they may agree to take them IF the HOA is willing to pay for modifications that will bring them up to current building code. They might want to eliminate the “islands.” Of course, the current HOA property owners would probably have to pay – at least in part – for those modifcations by way of a tax assessment. The costs could possibly be spread out over 10 or more years. Find out what the City’s specific objections are, and see if the HOA can address those. Look for a real estate or land use attorney that can represent your interests, and see if you can get a free consultation.

      Reply
  3. robert

    “Furthermore, a recent Colorado court case has ruled HOAs can be prevented from changing their Declaration.”

    Which case was that?

    C.R.S. 38-33.3-217(7) allows an H.O.A. corporation that cannot obtain approval from the owners to amend the Declaration, the H.O.A. corporation can petition the courts to do so; i.e., amend the Declaration without owner approval.

    And the courts don’t have a lot of discretion on whether or not to approve the petition. “In Centennial Ranch and Aspen Mountain Ranch Association v. Fuller et al., 14CA1326, the Court of Appeals held that when a court determines that a community association has met the requirements of Section 217(7), it errs if it denies the petition to amend” ( http://www.cohoalaw.com/what-the-courts-say-declaration-amendment-petitions-shall-means-shall.html ).

    If anything, the Colorado legislature and courts have made it easier for H.O.A. corporations to to amend their governing documents — with or without the consent of the home owners.

    Reply

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