The verdict is in on whether the state should license the folks who manage homeowners associations, townhome complexes and condos and it’s a surprise.
After a four-month investigation, the Department of Regulatory Agencies has determined the state should not get into the business of regulating the 1,200 or so people who manage HOAs.
Instead, DORA believes the state should regulate the companies that employ those managers to best protect the estimated 2 million Coloradans living in HOAs, or “common-interest communities,” from harm.
“There is no shortage of horror stories related to common-interest community living,” DORA said in its 24-page report. “Regulation is justified and widely supported.”
But DORA rejected licensing individuals, as suggested by the Colorado chapter of the Community Association Institute, a property manager trade group.
CAI requested the DORA investigation in November, suggesting there would be fewer complaints about the way HOAs are managed if the state licensed and imposed professional standards on the folks who enforce covenants, collect dues and hire maintenance and landscaping crews, among other manager duties.
CAI’s proposal didn’t envision regulating companies and the DORA finding was a surprise to property managers and state officials alike.
“I was really surprised,” said Aaron Acker, the HOA Information Officer who fields complaints from HOA residents.
“I didn’t even think this was a possibility,” he said.
In January, Acker, delivered to lawmakers a scathing analysis of the property management industry based on complaints his office received in 2011. His report produced calls for more state oversight of the state’s 8,000-plus HOAs.
Acker said the question now is whether Colorado lawmakers will act before the end of the 2012 legislative session.
“At this point, it’s a race to the Legislature if somebody wants to draft a bill,” Acker said. “The recommendation is out there and anyone can take it and be as creative as they want with a bill.”
It's unclear what CAI intends to do next.
“Taken aback,” was the general CAI reaction, said Jan Mangum, executive director of CAI’s Southern Colorado chapter.
“We’re trying to decide where we go from here,” Mangum said.
She said CAI disagrees with the DORA findings, noting that many HOAs are managed by individuals not associated with property management companies.
"This leaves a lot of homeowners and HOAs open to mismanagement," Mangum said.
The report raises lots of questions for David Stiver owner of Team Strategy, a Colorado Springs management company since 1992.
“If you go to company licensing, could you have people without credentials working under the umbrella of the company?” he said.
“Who is going to set the standards?”
Stivers said “there needs to be a cleaning up” of HOA managers but said lawmakers need to take it slow.
He supports giving Acker’s office authority to police property managers and HOA boards. Within reason.
“Right now, his office has no authority to enforce anything,” Stiver said. “Companies behaving poorly ought to be placed on notice without having to create an enormous, oversized bureaucracy.”