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State HOA bill defanged, sent to study

By: MEGAN SCHRADER
March 28, 2013
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DENVER • A bill that would empower the state to investigate homeowners association infractions and enforce HOA laws will be significantly watered down and turned into a study, the bill’s author announced Wednesday.

Rep. Su Ryden, D-Aurora, said she would scale back House Bill 1134, which would have given the Homeowners Association Information Resource Center investigation and enforcement powers over HOAs across the state.

Instead, the bill will direct a study on implementing state-led enforcement of HOA law and creating a conflict resolution system to mediate feuds between association boards and homeowners.

“This has a very large cost associated to it,” Ryden said. This will give the state a chance to analyze what is needed and how best to provide for those needs, she said.

After the study is concluded, legislation might be introduced next year addressing the findings.

Having the enforcement bill watered down was a disappointment to some Wednesday.

Stan Hrincevich, an advocate for homeowners in Colorado, said Ryden’s bill wouldn’t go far enough in protecting homeowners. He said the state’s laws are insufficient.

“They don’t address enforcement other than our costly litigious court system,” said Hrincevich, who is with the Colorado HOA Forum.

If a homeowner has a grievance with an HOA, Hrincevich said the only option is to take it to court.

Molly Foley-Healy, with the Community Associations Institute, said data from the homeowners resource center doesn’t support the need for further regulation. She said there were only 309 complaints logged in 2012 out of an estimated two million people who live under homeowners association agreements.

Homeowners already have small claims court as an option to address grievances, she said, or homeowners can, at any time, remove a board that has exceeded its power and replace those members.

Ryden’s bill is one of four introduced this session to address issues with HOAs.

“This is a true constituent concern for all of us,” said Rep. Angela Williams, D-Denver. “I understand that HOAs serve a necessary role, but their powers should be balanced, reasonable to protect the rights of homeowners and the association as a whole.”

Williams is the author of two of the bills. The first, House Bill 1277, would create a licensing process for HOA managers. The new process would be done through the Department of Regulatory agencies under the Division of Real Estate. Applicants would have to demonstrate knowledge of state laws and budgeting practices.

“This bill will ensure the HOA managers have sufficient understanding of common practices and the laws,” Williams said.

Her second bill would require HOAs to establish a debt collection policy that gives homeowners at least six months and a payment plan to pay outstanding dues.

“There have been some documented cases of HOAs immediately recording liens on properties and foreclosing on homes for extremely small delinquencies,” Williams said.

Finally Rep. Rhonda Fields, D-Aurora, has a bill that protects homeowners from fines assessed when they are violating covenants by using water conservation measures like xeriscaping. Senate Bill 183, co-sponsored by Sen. Morgan Carroll, D-Aurora, would prohibit HOAs from requiring water-intensive turf grass. That bill has passed the Senate and now heads to the House.

Contact Megan Schrader:

719-286-0644

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