Representative Paul Rosenthal introduced House Bill 18-1126 (HB 1126) which would make it impossible for HOAs in Colorado to prohibit dogs based upon breed, weight or size. However, as originally drafted, the bill seems to permit associations to regulate the number of dogs by rule and to enforce covenants contained in a declaration relating to dog or owner behavior, nuisance barking, picking up poop and the like.  For what it's worth, typically these types of regulations are contained in rules and not in covenants.

The House Committee on Local Government held a hearing today on HB 1126.  Many folks testified in support of the bill and a few folks testified against the bill arguing that HOAs have the contractual right to regulate dogs and the drafting of the bill needs some serious work. Representative Rosenthal proposed an amendment to HB 1126, which was approved, that took out of the language in his bill relating to regulating the number of dogs by rule and enforcing covenants on dog and owner behavior, nuisance barking, picking up poop, etc.    

On a vote of 9 to 4, the House Committee on Local Government reported this bill out of Committee as amended to the floor of the House with a favorable recommendation.  The language of the bill is now limited to providing that an association shall not prohibit "The keeping of certain types of dogs based solely on a breed, weight, or size classification."  

Stay tuned to this blog for updates on HB 1126 as it is considered by the full House.  

HB 1175 would (1) extend the community association manager licensure program for an additional five years; (2) amend the definitions of "community association management" and "community association manager;" (2) amend the supervision requirements for the apprentice license; (4) repeal references to private professional credentials; and (5) enhance the due process protections of a cease and desist order.  

Following industry stakeholders reaching consensus, it is expected that amendments will be offered on the floor of the House to dispose of the requirement that management companies have a "designated manager" who is responsible for all of the management related activities in the company.  Based upon testimony by industry representatives in a hearing before the House Business Affairs and Labor Committee to determine whether HB 1175 would be introduced, this move seems to be in response to a designated manager being disciplined in 2017 for financial actions taken by an unlicensed president and an unlicensed CEO of a management company.  Since the designated manager was a subordinate of the president and CEO of the management company, she had no hope of regulating or controlling their actions.  As a result, it seems fundamentally unfair that she was disciplined for their unlicensed activity.  

I look forward to seeing whether CAI's Colorado Legislative Action Committee will take any action on addressing better screening of complaints brought against managers prior to the Division of Real Estate launching a full blown investigation into the complaint.  I have personally seen a handful of complaints brought against community association managers that had nothing at all to do with their management and instead related to decisions made by the board of directors of the HOAs they manage.  It's simply wrong to subject managers to a full blown investigation on issues that are not management related and should be disposed of through an initial review of the complaint.  

As I mentioned in my January 30th blog posting, the House Business Affairs and Labor Committee approved introduction of the HB 1175 which would extend the community association manager licensure program for an additional five years.  With the exception of a recommendation from DORA that the Director of the Division of Real Estate be authorized to establish renewal fees for management companies, the Committee directed that all of the other recommendations from the DORA Sunset Review be included in the bill.  Those recommendations include:

1.  Continue the CAM licensure program for five years, until 2023;

2.  Amend the definitions of "community association management" and "Community Association Manager," and authorize the Director of the Division of Real Estate to promulgate rules clarifying the supervision requirements for support staff who are providing clerical, ministerial, accounting or maintenance functions to a licensee and specify any activities that would trigger support staff to be licensed; 

3.  Amend the supervision requirements for the Apprentice License and require the Director of the Division of Real Estate to define by rule the appropriate level of supervision related to specific activities of an Apprentice and detail any supervision requirements that are necessary to protect the public;

4.  Repeal any references to private, professional credentials and authorize the Director of the Division of Real Estate to approve, by rule, any credentials, examinations or education deemed equivalent or superior to the education and examination otherwise required by the Director; and

5.  Enhance the due process protections of a cease and desist order.  

HB 1175 has not yet been scheduled for a hearing before the House Business Affairs and Labor Committee.  However, since that very Committee approved introduction of the legislation, it is expected the hearing will simply be a formality.

All expectations are that HB 1175 will enjoy bipartisan support in both the House and Senate and the community association manager licensure program will be renewed for another 5 years.  

Based upon the testimony presented and questions answered by the Director of the Division of Real Estate, the Committee overwhelmingly approved the introduction of a bill reflecting all but one of the recommendations of DORA.  The recommendation that was deleted from the bill is the recommendation that the Director of the Division of Real Estate be authorized to establish renewal fees for management companies.

The bill will be formally introduced tomorrow and I will post that bill on this blog as soon as it becomes available.  

1.  Continue the CAM licensure program for five years, until 2023;

2.  Authorize the Director of the Division of Real Estate to establish renewal fees for management companies;

3.  Amend the definitions of "community association management" and "Community Association Manager," and authorize the Director of the Division of Real Estate to promulgate rules clarifying the supervision requirements for support staff who are providing clerical, ministerial, accounting or maintenance functions to a licensee and specify any activities that would trigger support staff to be licensed; 

4.  Amend the supervision requirements for the Apprentice License and require the Director of the Division of Real Estate to define by rule the appropriate level of supervision related to specific activities of an Apprentice and detail any supervision requirements that are necessary to protect the public;

5.  Repeal any references to private, professional credentials and authorize the Director of the Division of Real Estate to approve, by rule, any credentials, examinations or education deemed equivalent or superior to the education and examination otherwise required by the Director; and

6.  Enhance the due process protections of a cease and desist order.  

In addition to these recommendations relating to continuing the CAM licensure program for another five years, the Sunset Report also recommends that the Director of the Division of Real Estate should create an advisory committee to assist with drafting rules regarding the use of unlicensed support staff and Licensed Apprentices.

It is expected that the House Business Affairs and Labor Committee will approve the introduction of a bill, which should be introduced within a week or two, consisting of the recommendations outlined above.  Once the bill is introduced and assigned to a committee for hearing, there will be a full vetting in testimony of the recommendations outlined in the Sunrise Report and additionally addressing the need to streamline the complaint and investigation process.  However, all indications are that the House and Senate will approve continuing with the CAM licensure program for an additional five years.

Stay tuned to this blog for more information on the sunset review as it proceeds through the legislative process.  

In addition to payment plans that may be affected by the increase of assessment fees, there are also notification requirements and deadlines the association must comply with for certain owners who have filed for bankruptcy.  Advising the association’s attorney of any change will allow the attorney to take the proper measures to ensure that the association retains the right to collect the new assessment fee.

If you haven’t already notified your attorney that your assessment fees have changed, or will change, for the New Year, pick up the phone or send an email to your attorney – I’m sure he or she would love to hear from you!

The first session, titled "Meetings," will take place Friday, October 27, 2017, from 8:30 am to 12:30 pm. Session topics include the following:

• Everything You Need to Know about Membership Meetings

• Board of Directors Meetings

• Action Plan for Meetings*

• Mock Board Meeting.

Please e-mail Allison Grout at agrout@wlpplaw.com for information about pricing and how to register for all or some of the class sessions. Price increases apply for registrations received after October 23, 2017.

*Submitted for Continuing Education approval.

• The Attorney-Client Privilege
• Fair Housing
• Insurance Claims
• Member and Board Meetings
• The Manager’s Role in Litigation
• Covenant Enforcement
• Collections
• Records

 Please e-mail Allison Grout at agrout@wlpplaw.com to add your name to our interest list.  We plan to provide up to eight hours of education at each class to make it easy to catch up on DORA Continuing Education credits in a single day.  The full-day class will cost $100.  Individual credits for attendance at select one-hour topical sessions are available for $15.

While associations cannot unilaterally change the controlling laws, associations can take proactive steps when contracting for new projects. In particular, associations need to know how the potential for construction defects may affect insurance coverage on projects that associations contract to complete on their own. Did you know that many contractors' insurance policies exclude multi-family housing projects from coverage?

1. Contract for insurance coverage that protects your association. Do not use the bid or the contractor's form contract as the binding agreement between the parties.
2. Make sure the association is named as an additional insured on the contractor's policies. 
3. Ensure that the contractor provides primary, non-contributory coverage and that subcontractors comply with coverage requirements too.
4. Obtain the correct endorsements to insure over the exclusions for multi-family projects. Standard insurance forms are available and offer this coverage for an additional, cost effective price.
5. Require the contractor to submit the policy declaration pages and copies of endorsements, at a minimum. Do not rely on the certificate of insurance as proof of insurance.
6. Negotiate sufficient notice of any policy cancellation. Colorado law only obligates carriers to provide 10 days' notice of cancellation to additional insureds. Association brokers can assist with obtaining a separate endorsement that gives 30 days' notice before coverage ends.
7. Require set coverage amounts for the specific location or project. Some contractors carry blanket coverage, with a single aggregate coverage amount, for multiple job sites, meaning that your community could fail to benefit from coverage if other losses exhaust the coverage limits first.
8. Consider purchasing an owner controlled insurance policy ("OCIP"), also known as a wrap policy, for large projects to guarantee coverage of the contractor and all subcontractors for the entire time that the association may discover defects. Contractors and subs go out of business and change or cancel coverage without having the assets to protect the associations harmed by defective work. An OCIP affords seamless protection for the association and its owners. 

THIS ARTICLE IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT A SUBSTITUTE FOR LEGAL ADVICE. PLEASE CONTACT ONE OF OUR ATTORNEYS FOR ASSISTANCE WITH CONTRACT DRAFTING AND NEGOTIATION.