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Legislative Year: 2021 Change
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Bill Detail: HB21-1229

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Title Home Owners' Associations Governance Funding Record Keeping
Status Introduced In House - Assigned to Business Affairs & Labor (03/18/2021)
Bill Subjects
  • Health Care & Health Insurance
  • Housing
  • Insurance
  • Local Government
House Sponsors N. Ricks (D)
B. Titone (D)
Senate Sponsors R. Fields (D)
House Committee Business Affairs and Labor
Senate Committee
Date Introduced 03/18/2021
Summary

The bill increases requirements for disclosure and transparency in
the operations of unit owners' associations (HOAs) in common interest
communities, including:
  • Posting on the HOA information and resource center's
website the community's governing documents, and any

amendments to those documents, in addition to recording
them in the county land records as required by current law
(sections 5 and 17 of the bill);
  • Supplying a list of the HOA's current fees chargeable upon
sale of a home in the community to the HOA information
and resource center for posting on the center's own website
(sections 14 and 17);
  • Posting on a website, with the web address communicated
annually to all unit owners, the contact information for the
HOA and its management company, if any, as well as other
information currently required to be disclosed (section 6);
  • Specifically authorizing the state internet portal authority
to coordinate with the HOA information and resource
center to host HOA websites on behalf of registered HOAs
(sections 1 and 17);
  • Allowing unit owners to place items on a meeting agenda
by petition, to record any portion of an open meeting, and
to invite a registered parliamentarian to observe executive
board elections (sections 11 and 12);
  • Limiting the use of proxies by requiring express delegation
of a unit owner's voting rights in a signed, dated writing
(section 12);
  • Prohibiting any action to be taken at an open meeting by
written or secret ballot unless at least 20% of the unit
owners in attendance or represented by proxy so request
(section 12); and
  • If access to association records required to be provided
within 30 calendar days after a request was submitted by
certified mail is withheld beyond that period, penalizing the
HOA $50 per day for not providing them (section 14).
The bill also requires:
  • Members of an HOA's executive board to either certify that
they know and fully understand the HOA's governing
documents or complete a free, online basic training course
offered or approved by the HOA information and resource
center (sections 8 and 17);
  • The executive board to commission a reserve study at least
every 3 years and, at least annually, to adjust the HOA's
finances accordingly (sections 7 and 10); and
  • All contracts for goods or services over a specific dollar
amount to be awarded based on a competitive bid process
involving at least 3 bids if possible (section 13).
For purposes of the reserve study requirements, HOAs with fewer
than 35 residential units that do not employ professional association
managers may conduct an internal reserve study.
Under current law, the developer of a subdivision (declarant) is not
required to transfer control of the HOA to executive board members
representing the owners of units in the subdivision until specified
percentages of the units are sold to initial purchasers. Section 10 places
limits on the amount of time that may pass before the declarant must turn
over control of the HOA to unit owners, regardless of the percentage of
units that remain unsold, and requires the annual budget to detail
proposed allocations to the reserve fund and a history of the prior year's
expenditures from the reserve fund. Section 10 also requires any vacancy
on the executive board that occurs more than 60 days before the next
board election to be filled by a special election rather than by the
remaining board members as allowed by current law.
Section 9 prohibits the HOA from closing off or limiting use of
the common elements except for a finite period of time, with advance
notice to unit owners and a statement of the reason for the closure, and
prohibits the selective scheduling of maintenance on common elements
to immediately benefit certain units in preference over others.
Upon the sale of a unit, current law requires disclosure to the buyer
of certain HOA documents. Section 14 requires the HOA to ensure that
the documents provided to a buyer or posted online are correct and
complete, and gives the buyer the right to sue for damages if they are not.
Section 15 requires the HOA to disclose whether a loss has occurred to
common property that may result in a future assessment against unit
owners, and section 16 requires property and casualty insurers to pay
claims for loss assessments based on when the assessment is made rather
than when the loss occurred, thus avoiding a potential gap in coverage for
the buyer of the unit.
Section 2 adds specificity to the requirement that HOAs allow
installation of renewable energy generation devices (e.g., solar panels)
subject to reasonable aesthetic guidelines by requiring approval or denial
of a completed application within 60 days and requiring approval if
imposition of the aesthetic guidelines would result in more than a 10%
reduction in efficiency or a 10% increase in price.
Section 3:
  • Amends current provisions regarding political yard signs to
specify that the election season during which such signs
must be permitted begins 45 days before the first mail-in
ballots are sent to voters, rather than 45 days before the
official date of the election; and
  • Specifically includes nonvegetative turf grass (also known
as artificial turf) among the types of drought-tolerant
landscaping materials that the HOA may regulate but not
prohibit.
Section 4 requires any dispute between the HOA and a unit owner
to be submitted to mediation, either through the office of dispute
resolution within the Colorado judicial branch or through other available
mediation services, prior to the commencement of any legal proceeding.
The HOA's acceptance of a settlement proposed by the mediator does not
preclude the HOA from enforcing covenants or rules in any future
proceeding.

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