Bill of rights for Colorado homeowners
Recently, the landscaped has changed. No, not owing to the heady amount of snowfall we’ve been receiving, but because of a change in the law. Variously referred to as the homeowners’ bill of rights, Governor Owens signed SB 100 (Senate Bill 100) into law on June 6. The new law will heretofore affect all aspects of the governance and operation of homeowner associations.Certain provisions of the law took effect immediately upon signing while the bulk of its provisions took effect at the turning of the new year. Some of the law’s provisions are quite profound and reflect significant changes in society. Others are more mundane and ministerial. Nonetheless, taken as a whole, the law will change the way that all common interest communities function.Common interestsOkay, first then, what is a common interest community? Common interest communities include condominiums, planned unit developments and housing cooperatives. Common interest developments all have common ownership of residential property, mandatory membership of all owners in an association that governs the property, and governing documents that provide a “constitution” by which the association and the members are governed. Rules in the form of conditions, covenants and regulations (“CC&R”s) incorporated into ownership of the property govern such things as architectural elements, the number or pets which may be permitted in each household within the community, the permissibility of basketball hoops and parked cars, and the procedures of the homeowners’ association. A common interest community, then., is one in which common property is owned, an association exists to govern the community and certain rights and duties are incumbent upon the member who must, as a condition of ownership in the community, belong to the association. More and more of us live in such communities.In Colorado, many, but not all, common interest communities are subject to CCIOA (pronounced Kiowa, like the American Indian tribe) which is an acronym which stands for the Colorado Common Interest Ownership Act. CCIOA establishes a comprehensive and uniform framework for the creation and operation of common interest communities. It is a lengthy piece of work which encompasses both the establishment of common interest communities and their governance. With a few exceptions, CCIOA is applicable to all common interest communities created within the state of Colorado after July 1, 1992. The exceptions apply to small (originally, fewer than 10 units, now fewer than 20) common interest communities. For the most part, SB 100 modifies certain provisions of CCIOA including imposition of its changes on all common interest communities formed before 1992 with respect to events and circumstances occurring on or after January 1, 2006. In other words, unless the community is exempt from CCIOA, it must adopt seven mandatory responsible governance policies by January 1, 2006.An association must adopt written policies, procedures, and rules and regulations regarding: 1) collection of unpaid assessments; 2) handling board member conflicts of interest; 3) conduct of meetings; 4) covenant and rule enforcement, including notice and hearing procedures and fine schedules; 5) inspection and copying of association records by unit owners; 6) investment of reserve funds; and 7) the adoption and amendment of policies, procedures and rules.While the new act itself does not impose any penalties for failure to meet its requirements, CCIOA provides for the mandatory award of attorney fees to a prevailing party in any action brought to enforce its provisions, in addition to any damages that might be proved. While damages are dependent on the specific facts and circumstances involved in an action, it is likely that a reviewing court would require an association to adopt the requisite policies, and would also award attorneys fees to the party bringing an action to require the association to comply with the statutory requirements. In addition to the foregoing, the new act provides, among other things, for the following: the elimination of rules or covenants banning or limiting xeriscaping; the elimination of rules or regulations prohibiting the display of the American flag (or service flags where an immediate family member is on active duty or military reserve) by a unit owner on his or her own property; elimination of rules and regulations prohibiting political signs in a manner more restrictive than local ordinances; the elimination of rules prohibiting emergency vehicles parking on the association’s streets or in a unit owner’s driveway; the elimination of rules prohibiting unit owners from removing vegetation near their homes for purposes of fire mitigation; the elimination of rules and covenants prohibiting unit owners from replacing flammable roofing material with non-flammable materials; secret ballots when votes are taken at annual meetings for board members; and a host of other changes, affecting both policies and governance of the association.In light of the significant changes imposed by adoption of SB100 as law, all associations are encouraged to review their governance documents in order to insure compliance with the new provisions. The failure to do so, and to timely amend and update association documents, may effect unwanted repercussions, particularly if a savvy homeowner (say one who sues the association to enforce his or her right to xeriscape or to replace his or her roofing materials) determines to take the association to task for its failure to comply. Rohn K. Robbins is an attorney licensed before the bars of Colorado and California who practices in the Vail Valley. He is a member of the Colorado State Bar Association Legal Ethics Committee and is a former adjunct professor of law. Robbins lectures for Continuing Legal Education for attorneys in the areas of real estate, business law and legal ethics. He can be heard on Wednesdays at 7 p.m. on KZYR radio (97.7 FM) as host of “Community Focus.” He can be reached at 926-4461 or at firstname.lastname@example.org.