Denver Homeowners Association Attorney
In recent years, the Colorado legislature has revamped and updated the Colorado Common Interest Ownership Act (“CCIOA”). If you are a board member of a property management company, condominium or gated community homeowners association (HOA), you need to ensure that your legal documents for your homeowners association, including governance articles and policies have been updated to comply with new provisions. CRS §38-33.3-101, S.B.100, and S.B. 89 provide guidance, yet HOAs existing prior to July 1, 1992 face a difficult task in meeting the new requirements without satisfying high percentage voting approvals to amend recorded Declaration provisions. At the law offices of Harmon S. Graves, P.C., in Littleton, Colorado, we will review the appropriate documents and amend provisions, which no longer conform to Colorado common interest ownership statutes, rules and regulations and properly integrate such requirements with existing documents where amendment is not feasible. Contact us to schedule a confidential consultation.
Helping homeowners for more than five decades
Under Colorado law, homeowners associations have standing to bring claims on behalf of homeowners against the developer or builder for construction and building defects or other problems, which arose due to defects in the design or construction of the property. Residential homeowners have the right to bring complaints against homeowners associations for failure to provide maintenance services for which they contracted. We represent homeowners associations, as well as individual homeowners, throughout the Denver metro region in all types of homeowner association litigation.
Delinquency and Foreclosure Reform. On June 3, 2022, substantial amendments to the Colorado Common Interest Ownership Act (“CCIOA”) were signed into law. These are found in C.R.S. § 38-33.5-209.5.
The highlights include: regarding an owner’s delinquency in payments, the HOA must contact the owner by certified mail and by posting notice on the owner’s property, plus notice either by first-class mail, email, or text message; prohibiting the HOA from referring a delinquent account for collection unless a majority of the Board votes to refer the matter; prohibiting the imposition of daily fines but permits imposition of fines every other day for violations affecting public safety; interest imposed on unpaid assessments and fines cannot exceed 8%; requiring the HOA to adopt a policy mandating the steps it must follow before it can take legal action; an accelerated procedure for imposition of fines and opportunities available to owners to cure an alleged violation; any disciplinary hearing regarding an owner and any referral of a delinquency for collection must be held in executive session; before foreclosure may be initiated the HOA must offer an owner an installment payment plan over a period of 18 months, and the amount of such payments may be elected by the owner, which may not be less than $25.
Foreclosure is prohibited if the debt consists solely of either or both fines and attorney fees, and fines in any event are limited to a total of $500 for any violation; authorizing a party to enforce rights under the governing documents and to enforce a contract in small claims court, subject to a jurisdictional limit of $7,500; the HOA must send a monthly statement to each owner itemizing all assessments, fines, fees, and charges the owner owes to the HOA, and with regard to payment, the HOA shall apply a payment first to assessments; and an HOA may be held liable for damages up to $25,000 for a violation of any foreclosure laws.
With regard to notices, this potentially expensive amendment: an owner may designate a contact to also receive any HOA notice of delinquency, and the owner may demand that such notices be made in a language other than English.
Application to preexisting communities (created before 7/1/1992): CCIOA § 117 states that §§ 209.4 through 209.7 apply to preexisting communities.
Homeowners Associations: How Does Your Association Stack Up? The Colorado Division of Real Estate, HOA Information and Resource Center, receives complaints about Homeowners Associations and in 2011 compiled this list of the most common, published by The Denver Post on February 13, 2012:
|Failure to produce records||78|
|Not following governing documents||64|
|HOA not listening to homeowner concerns||57|
|Lack of maintenance||53|
|Harassment, retaliation, discrimination||50|
|Improper or selective enforcement of covenants||38|
A question that may be asked by homeowners is: Which of these failures are actionable; that is, can any provide a defense to monthly or special assessments and alleged covenant violations, or allow a recovery against the Association? For the board of directors, the question may be: Are we interpreting our governance documents and enforcing them in a good faith manner?
The most prevalent complaint is one lodged against the manager, typically arising out of one or more of the specific complaints listed. The Manager is regarded as the agent of the Association, so its acts within the scope of its contract with the Association will be the acts of the Association. What, then, can constitute a defense to assessments or to a notice of covenant violation?
While specific governance documents and case-specific facts ultimately control, selective enforcement of covenants by the board of directors may lead to a waiver of the right to enforce a selectively-enforced covenant. Monthly assessments, special assessments, late charges, interest and attorney’s fees are all authorized under CCIOA and typically the community’s governance documents, and although ineptness of the Association may not be a defense to assessments, enforcement of interest, late fees and penalties may be denied in whole or in part.
Lack of maintenance of common elements can lead to recovery against the Association. If, for example, after repeated notice to the Association, a disintegrating sewer line has caused blockage and backup into a residence or condominium unit, and assuming the sewer line is a common element, a monetary recovery of damages, or mandatory injunction for the repair of the line, may be ordered.
The prevailing party in a community subject to CCIOA, may recover his, her or its attorney’s fees. It is important to note that the prevailing party entitlement works both ways. Overreaching by the Association and cavalier assertion of defenses to its legitimate claims can very quickly become financially risky and burdensome for the losing party.
If the board of directors has not been responsive to homeowners, the make-up of the board can be changed through the election process, most easily exercised at the annual meeting of members. Make no mistake, this requires a willing member to seek election and the promotion of that candidate to the members along with solicitation of proxies given the all-to-common light turnout at such meetings.
Lien for Assessments-Notice Needed. The foreclosure statute in Colorado, CRS 38-38-103(1)(c), as amended January 1, 2008, exposes an association’s lien for assessments to extinction upon foreclosure of an encumbrance if the lien has a junior priority, or if there is an issue concerning priority, and if the Declaration does not contain the association’s current address. This problem may be avoided by recording a notice of the association’s address under the Declaration.
Maintenance Obligations/Insurance. Under Section 307 of CCIOA, a homeowners association is responsible for maintenance and repair of common elements. A condominium unit owner’s responsibility typically embraces the space within his or her unit boundaries as defined in Section 202 of CCIOA. While definitions of common elements and units found in CCIOA and the declaration of covenants provide guidance, there are several potentially overlapping obligations, such as cracking in a concrete floor in a unit’s utility room. A condition of this kind may not appear unsafe, but may lead to a dispute over responsibility for damage to a unit below from, for example, a leaking hot water heater within the utility room. The risk escalates when attorney’s fees are added to the claim for breach of the covenant to maintain. Although the association may have insurance coverage for damages arising out of negligent maintenance of common elements, a prudent condominium owner ought to seek his or her own homeowners insurance.
Request for Statement of Account of Assessments. If the association receives a written request from a homeowner, served on its registered agent, seeking a statement of the amount of unpaid assessments currently levied against the homeowner’s property, the association must respond within 14 days. Failure to do so shall bar any lien entitlement for assessments which were due as of the date of the request. CRS 38-33.3-316(8).
Put experience to work for you.
When it comes to getting the best legal representation for your problems, experience counts. Contact the offices of Harmon S. Graves, P.C., to schedule for a free 30-minute consultation.