Be it enacted by the General Assembly of the State of Colorado:
1. SECTION 38-33.3-103, Colorado Revised
Statutes, is amended BY THE ADDITION OF THE FOLLOWING NEW SUBSECTIONS to read:
38-33.3-103. Definitions. As used in the
declaration and bylaws of an association, unless specifically provided
otherwise or unless the context otherwise requires, and in this article:
(20.5) "Mixed-use
development" means a common interest community that contains two or more
of the following elements: Residential, commercial, business, retail, office,
agricultural, recreational, or industrial.
(21.5) "Phased
community" means a common interest community in which the declarant
retains development rights.
2. SECTION 38-33.3-106.5 (1) (c),
(1) (d) (II), and (1) (d) (IV), Colorado Revised Statutes, are amended to read:
38-33.3-106.5. Prohibitions contrary to
public policy - patriotic and political expression - emergency vehicles - fire prevention
- definitions. (1) Notwithstanding any provision in the declaration,
bylaws, or rules and regulations of the association to the contrary, an
association shall not prohibit any of the following:
(c) (I) The display of a political sign by a
unit owner on that unit owner's property or in a window of the unit owner's
residence; except that:
(A) An association may prohibit the display of
political signs earlier than forty-five days before the day of an election and
later than seven days after an election day; and
(B) An association may regulate the size and
number of political signs that may be placed on a unit owner's property if
the association's regulation is no more restrictive than any applicable city,
town, or county ordinance that regulates the size and number of political signs
on residential property. If the city, town, or county in which the property is
located does not regulate the size and number of political signs on residential
property in accordance with
subparagraph (II) of this paragraph (c).
(II) The association shall permit at least one
political sign per political office or ballot issue that is contested in a
pending election. with The maximum dimensions of each sign may be limited to the lesser of the following:
(A) The maximum
size allowed by any applicable city, town, or county ordinance that regulates
the size of political signs on residential property; or
(B) Thirty-six inches by forty-eight inches. on
a unit owner's property.
(II) (III) As used in this paragraph (c),
"political sign" means a sign that carries a message intended to
influence the outcome of an election, including supporting or opposing the
election of a candidate, the recall of a public official, or the passage of a
ballot issue.
(d) The parking of a motor vehicle by the occupant of a unit owner on
a street, driveway, or guest parking area in the common interest community if
the vehicle is required to be available at designated periods at the unit
owner's such occupant's
residence as a condition of the unit owner's occupant's employment and all of the following criteria are
met:
(II) The unit owner occupant is a bona fide member of a
volunteer fire department or is employed by an emergency service provider,
as defined in section 29-11-101 (1.6), C.R.S. a primary provider of emergency fire fighting, law enforcement,
ambulance, or emergency medical services;
(IV) Parking of the vehicle can be accomplished
without obstructing emergency access or interfering with the reasonable needs
of other unit owners or occupants
to use streets, and driveways, and
guest parking spaces within the common interest community.
3. SECTION 38-33.3-117 (1) (g), (1.5) (a), and
(1.5) (e), Colorado Revised Statutes, are amended to read:
This is the first suggested change that needs to be
removed from this Bill.
38-33.3-117. Applicability to
preexisting common interest communities. (1) Except as provided in
section 38-33.3-119, the following sections shall apply to all common interest
communities created within this state before July 1, 1992, with respect to
events and circumstances occurring on or after July 1, 1992:
(g) 38-33.3-122 and 38-33.3-123; (2);
(1.5) Except as provided in section
38-33.3-119, the following sections shall apply to all common interest communities
created within this state before July 1, 1992, with respect to events and
circumstances occurring on or after January 1, 2006:
(a) 38-33.3-123 (1);
(e) 38-33.3-223;
There are many HOAs that were formed before July 1992.1999.
These HOAs can vote to join the CCIOA, which will bring in the changes of SB
100 and also whatever is left of this SB 06-89. It is totally improper to pass
new rules and laws that effect HOAs who consider themselves not under
the control (EXCEMPT FROM) of the rules of CCIOA. They can vote to
come under the rules of CCIOA and that’s fine, but don’t pass laws they are not
aware of that will cover their HOA, because this bill was not advertised as
effecting HOAs who to date, are not covered by the CCIOA.
4. SECTION 38-33.3-123
(1) (c), Colorado Revised Statutes, is amended to read:
Please read the following changes to this paragraph
and ask yourself why the CAI lined-out the words that they did. None of these changes are needed, and in fact,
remove the collection of legal fees by a Homeowner if he is part of a
counterclaim, cross-claim and third party. If the CAI lawyer knows legal fees
will not be collected if he loses on these claims, it’s a free ride in a
lawsuit, even if he loses to a Homeowner. Remove all lined-out words to its
original reading, do not let this change go through.
38-33.3-123. Enforcement -
limitation. (1) (c) For each claim or defense, including but not
limited to counterclaims, cross-claims, and third-party claims, and except as
otherwise provided in paragraph (d) of this subsection (1), In any legal
proceeding civil action to
enforce or defend the provisions of this article or of the declaration, bylaws,
articles, or rules and regulations, the court shall award to the party
prevailing on such claim the prevailing party's reasonable collection
costs and attorney fees, and costs, incurred in asserting or
defending the claim and costs of
collection to the prevailing party.
5. SECTION 38-33.3-124
(1), Colorado Revised Statutes, is amended to read:
38-33.3-124. Legislative
declaration - alternative dispute resolution encouraged - policy statement
required. (1) (a) The general assembly finds and declares that the cost,
complexity, and delay inherent in court proceedings make litigation a
particularly inefficient means of resolving neighborhood disputes. Therefore,
common interest communities are encouraged to adopt protocols that make use of
mediation or arbitration as alternatives to, or preconditions upon, the filing
of a complaint between a unit owner and association in situations that do not
involve an imminent threat to the peace, health, or safety of the community.
A mandate to adopt a policy to set a procedure for
addressing disputes arising between the association and unit owners is not
solved by this requirement. Addressing disputes
with a written policy doesn’t require all disputes to be submitted to a form of
arbitration or mediation. Our experience with arbitration has been out of 6
required by the court, all 6 failed for lack of final approval by the board,
which was after all parties agreed to sign a settlement agreement from
arbitration and mediation. Each time the board refused to ratify the written
settlement, it cost the membership another year in lost time before getting a court
date.
Another
purpose for this effort of mediation is to get the members and directors to
mediate with a city official, like City of Aurora. In this case the mediator
chosen is not a trained mediator and is easily influenced by the board’s
attorney who will run the entire mediation to his satisfaction. There is no
balance for a level playing field in this mediation. The HOA member will lose
every time, not to the justice of the hearing, but to power of a law license
over a citizen.
(b) Each association shall adopt a written policy
setting forth its procedure for addressing disputes arising between the
association and unit owners. The association shall make a copy of this policy
available to unit owners upon request.
6. SECTION 38-33.3-209.4 (2) (e) and (2)
(f), Colorado Revised Statutes, are amended to read:
38-33.3-209.4.
Public disclosures required - identity of association - agent - manager -
contact information. (2) Within ninety days after assuming control from
the declarant pursuant to section 38-33.3-303 (5), and within ninety days after
the end of each fiscal year thereafter, the association shall make the
following information available to unit owners upon reasonable notice in
accordance with subsection (3) of this section:
Here again read the words lined-out and understand
the purpose of this effort to erase the intent to require “any financial audit
or review for the fiscal year immediately preceding the current annual
disclosure.” With the lined-out words, the property manager, board or
lawyer can submit any audit report two years old, and it will be OK. THIS DOES
NOT HELP PROTECT THE HOA MEMBERS. IT HELPS THE CAI ATTORNEYS.
(e)
The results of any its most
recent available financial audit or review; for the fiscal year
immediately preceding the current annual disclosure;
(f)
A list of all association insurance policies, including, but not limited to,
property, general liability, association director and officer professional
liability, and fidelity policies. Such list shall include the company names,
policy limits, policy deductibles, additional named insureds, and expiration
dates of the policies listed and shall
be accompanied by a disclosure statement in bold-faced type that is clearly
legible and in substantially the following form:
"The association may obtain
property insurance covering certain portions of the common interest community.
Any property insurance maintained by the association may not cover your unit
(or portions of your unit) and may not cover the personal belongings and other
contents of your unit. You should not assume that any property insurance
maintained by the association will protect you against damage to or loss of
your unit and its contents. You should determine what insurance coverage may
be required to protect you against damage to or loss of your unit and its
contents. You should obtain professional advice regarding insurance coverage
of your unit and its contents."
7. SECTION 38-33.3-209.5 (1) (a), (1) (b) (VI), and
(1) (b) (VII), Colorado Revised Statutes, are amended, and the said
38-33.3-209.5 (1) (b) is further amended BY THE ADDITION OF A NEW SUBPARAGRAPH,
to read:
38-33.3-209.5.
Responsible governance policies. (1) To promote responsible governance,
associations shall:
(a)
Maintain accurate and complete
accounting records using generally accepted accounting principles on an accrual, cash, or modified accrual
basis of accounting; and
(b)
Adopt policies, procedures, and rules and regulations concerning: This
doesn’t say what the policies, procedures and rules will be. This becomes the playground of the CAI
attorney who tells the board that what he is writing has been approved by SB
100 and is required by all HOAs. Mr. Rich Johnston’s CAI attorney’s first procedure for the Dam
East HOA was that his legal fees must be paid first, and if there is ANY MONEY
LEFT OVER, IT WILL GO TO PAY THE DELINQUENT FEES OF THE MEMBER. Which is a
perfect collection agency for a lawyer.
ATTACHED TO THIS
REVIEW IS A COPY OF Mr. Rich Johnston’s process and procedures which this
paragraph (b) started.
(VI)
Investment of reserve funds; and
(VII)
Procedures for the adoption and amendment of policies, procedures, and rules; and
(VIII)
Procedures for addressing disputes
arising between the association and unit owners.
8. SECTION 38-33.3-217 (1) and (4), Colorado
Revised Statutes, are amended to read:
38-33.3-217.
Amendment of declaration. (1) (a) (I) Except in cases of
amendments that may be executed by a declarant under section 38-33.3-205 (4)
and (5), 38-33.3-208 (3), 38-33.3-209 (6), 38-33.3-210, or 38-33.3-222, by an
association under section 38-33.3-107, 38-33.3-206 (4), 38-33.3-208 (2),
38-33.3-212, 38-33.3-213, or 38-33.3-218 (11) and (12), or by the district
court for any county that includes all or any portion of a common interest
community under subsection (7) of this section, and except as limited by
subsection (4) of this section, Any time it is suggested that a group of
existing sections this large be lined-out, a detailed explanation must be given
to justify the rational for the removal the existing laws on the books. This
is a great way to remove laws without explaining why and what the result will
be once removed.
as otherwise provided in
subparagraph (II) of this paragraph (a), the declaration, including the plats and
maps, may be amended only by the affirmative vote or agreement of unit owners
of units to which more than fifty percent of the votes in the association are
allocated or any larger percentage, not to exceed sixty-seven percent, that the
declaration specifies. Any provision in the declaration that purports to
specify a percentage larger than sixty-seven percent is hereby declared void as
contrary to public policy, and until amended, such provision shall be deemed to
specify a percentage of sixty-seven percent. The declaration may specify a
smaller percentage than a simple majority only if all of the units are
restricted exclusively to nonresidential use. Nothing in this paragraph (a) shall be construed to prohibit the association from seeking a court
order, in accordance with subsection (7) of this section, to reduce the
required percentage to less than sixty-seven percent. The preceding capitalized
paragraph should not be included in this bill. A change of the voting ratios
must be handled by the membership, not a court of law. Absent this paragraph a
group of an HOA still can petition the court to hear a request to reduce a
voting percentage. This paragraph is intended to intimidate the membership
from stopping an effort to go to court and deny a change for their own good
reasons. THIS CHANGE DOES NOT HELP THE HOA MEMBERSHIP. IT HELPS THE CAI
LAWYER WHO WANTS TO RUN THE HOA FOR HIS OWN PURPOSE.
The following changes must be clearly explained in
detail each section listed, what it means and what and how the changes will
affect the public. There are no committee members who can determine the effect
of this change without an independent lawyers review to protect the public from
changes written by the lobbyist CAI Lawyers.
(II)
This paragraph (a) shall not apply:
(A)
To the extent that its application is
limited by subsection (4) of this section;
(B)
To amendments executed by a declarant
under section 38-33.3-205 (4) and
(5), 38-33.3-208 (3), 38-33.3-209 (6), 38-33.3-210, or 38-33.3-222;
(C)
To amendments executed by an association
under section 38-33.3-107, 38-33.3-206 (4), 38-33.3-208 (2),
38-33.3-212, 38-33.3-213, or
38-33.3-218 (11) and (12);
(D)
To amendments executed by the district
court for any county that includes all or any portion of a common interest
community under subsection (7) of this section; or
(E)
To amendments that affect mixed-use
developments, phased communities, or declarant-controlled communities.
(b)
(I) If the declaration requires first mortgagees to approve or consent to
amendments, but does not set forth a
procedure for registration or notification of first mortgagees, the
association shall may:
(A)
Send a dated, written notice and a copy of any proposed amendment by certified
mail to each first mortgagee at its most recent address as shown on the
recorded deed of trust or recorded assignment thereof; and
(B) In
addition, the association shall Cause the dated notice, together with
information on how to obtain a copy of the proposed amendment, to be printed in
full at least twice, on separate occasions at least one week apart, in a
newspaper of general circulation in the county in which the common interest
community is located.
(II)
A first mortgagee that does not deliver to the association a negative response
within sixty days after the date of the notice specified in subparagraph (I) of this paragraph (b) shall be
deemed to have approved the proposed amendment.
(III)
The notification procedure set forth in this paragraph (b) is not
mandatory. If the consent of first mortgagees is obtained without resort to
this paragraph (b), and otherwise
in accordance with the declaration, the notice to first mortgagees shall be
considered sufficient.
(4)
(a) Except to the extent expressly permitted or required by other provisions
of this article, no amendment may create or increase special declarant rights,
increase the number of units, or change the boundaries of any unit or the
allocated interests of a unit in the absence of a vote or agreement of unit
owners of units to which at least sixty-seven percent of the votes in the
association, including sixty-seven percent of the votes allocated to units not
owned by a declarant, are allocated or any larger percentage the declaration
specifies. The declaration may specify a smaller percentage only if all of the
units are restricted exclusively to nonresidential use.
(b) The sixty-seven-percent maximum percentage
stated in paragraph (a) of
subsection (1) of this section shall not apply to any common interest community
in which one unit owner, by virtue of the declaration, bylaws, or other
governing documents of the association, is allocated more than sixty-seven
percent of the votes in the association.
The followinghere is a
section that is asked to
be repealed. lets look at this “Repealed Section” and find out
what is lost.
38-33.3-223. Sale of unit -
disclosure to buyer.
1.
Statute text
(1) Except in the case of a
foreclosure sale, the seller of a unit in a common interest community shall
mail or deliver to the purchaser, on or before the title deadline, copies of
all of the following in the most current form available:
(a) The bylaws and the rules of the
association;
(b) The declaration;
(c) The covenants;
(d) Any party wall agreements;
(e) Minutes of the most recent
annual unit owners' meeting and of any executive board meetings that occurred
within the six months immediately preceding the title deadline;
(f) The association's operating
budget;
(g) The association's annual income
and expenditures statement; and
(h) The association's annual balance
sheet.
(2) The association shall use its
best efforts to accommodate a request by the seller for documents that are
within the association's control, in accordance with section 38-33.3-317.
(3) Written notice of any
unsatisfactory provision in any of the documents listed in subsection (1) of
this section, which notice is signed by the buyer or on behalf of the buyer and
given to the seller on or before the governing documents objection deadline,
shall be cause for termination of the contract of purchase and sale of the
unit. If the seller does not receive such written notice of objection on or
before the governing documents objection deadline, the buyer shall be deemed to
have accepted the terms of said documents, and the buyer's right to terminate
the contract on this basis is waived.
(4) The time periods specified in
this section may be altered by mutual agreement of the parties.
(5) Notwithstanding section 38-33.3-117
(1) (h.7), this section shall not apply to a unit, or the owner thereof, if the
unit is a time-share unit, as defined in section 38-33-110 (7).
HOW ABOUT THAT... LOOK AT WHAT IS GOING TO BE WITHHELD FROM A
BUYER BY THE CAI ATTORNEY. IS THE REMOVAL OF THIS SECTION HELPFUL TO THE
HOMEOWNERS, AND MOST IMPORTANT THE BUYERS? IT IS HELPFUL TO THE BOARD,
PROPERTY MANAGERS, AND YES THE LAWYERS. KEEP THOSE BUYERS IGNORANT OF THEIR
RIGHTS AND NEW PROFITS CAN BE MADE BY ALL. . THIS ENTIRE SECTION MUST NOT BE REPEALED AND IT SHOULD BE
MADE THE RESPONSIBILITY OF THE BOARD THAT ALL BUYERS RECEIVE COPIES OF ALL
LISTED DOCUMENTS PLUS, PENDING OR IN PROGRESS LAWSUITS AGAINST MEMBERS OR THE
ASSOCIATION.
Annotations
Editor's note: This section is effective January 1, 2006.
SECTION
2. Repeal. 38-33.3-223, Colorado Revised Statutes, is repealed.
SECTION
3. 38-33.3-303
(2), Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW PARAGRAPH
to read:
class=Section9>
The following is miss-titled on purpose. This section
tried to remove the liability for financial results (failure) by the Board of
Directors. Now no one is responsible for the HOAs funds invested in a bank at
3 % interest. The board by the terms of this section can lose all the money
and be protected by the business judgment rule. Without this section, the
board of directors of an HOA has absolutely no liability for their actions. (Private business can’t be run this way) The courts of Colorado will not hold a volunteer director liable for any misconduct as a director, except
for murder. CAI lawyers know this and tell the directors you can get away
everything except murder.
class=Section10>
38-33.3-303.
Executive board members and officers - powers and duties - audit. (2) (c)
Notwithstanding any provision of this
article to the contrary, the officers and members of the executive board shall
not be liable for the financial results of any investment of reserve funds if
the conduct of such officers and members in making such investment was
permissible under the principle of law generally known as the business judgment
rule.
SECTION
4. 38-33.3-303
(4) (b), Colorado Revised Statutes, is amended to read:
38-33.3-303.
Executive board members and officers - powers and duties - audit. (4) (b)
(I) At the discretion of the executive
board or upon request pursuant to subparagraph (II) or (III) of this paragraph
(b) as applicable, the books and
records of the association shall be subject to an audit, using generally
accepted auditing standards, or a review, using statements on standards for
accounting and review services, at least once every two years by a
an independent person
selected by the executive board. With this description of an independent person he could be the
janitor from next door.
Such person need not be
a certified public accountant except in the case of an audit. OK if he is not an accountant how does he
prepare the following review? The audit or review report shall cover the
association's financial statements, which shall be prepared using generally
accepted accounting principles on the accrual basis of accounting or using
another comprehensive basis of accounting.
(II)
An audit shall be required under this paragraph (b) only when both
of the following conditions
are met:
(A)
The association has annual revenues or expenditures of at least two hundred
fifty thousand dollars; and
(B)
An audit is requested by the owners of at least one-third of the units
represented by the association. This is real tricky since most HOAs have less than 10 percent of the
membership that will participate in any actions of their association. So The
CAI has set up an impossible requirement that will stop all future audits of
any HOA and the lawyers and property managers can and will feed on the
membership like a money tree.
(III)
A review shall be required under this
paragraph (b) only when requested
by the owners of at least one-third of the units represented by the
association. One-third
vote will never happen.
(III) (IV) Copies of an audit
or review under this paragraph (b) shall be made available upon request to any
unit owner beginning no later than thirty days after its completion. ALL AUDITS MUST BE
COMPLETED FOR PRESENTATION TO THE MEMBERSHIP AT EVERY ANNUAL MEETING. WITHIN
THE AUDIT THE REPORT OR CPA MUST STATE THAT ALL MONEYS EXPENDED WAS APPROVED BY
A MOTION AND VOTE OF THE BOARD OF DIRCTORS AT A DULY HELD MEETING.
(IV)
(V) Notwithstanding section 38-33.3-117 (1.5) (h), this paragraph (b) shall
not apply to an association that includes time-share units, as defined in
section 38-33-110 (7).
SECTION
5. 38-33.3-308
(1), (2.5) (a), and (2.5) (b), Colorado Revised Statutes, are amended to read:
38-33.3-308.
Meetings. (1) Meetings of the unit owners, as the members of the
association, shall be held at least once each year. Special meetings of the
unit owners may be called by the president, by a majority of the executive
board, or by unit owners having twenty percent, or any lower percentage
specified in the bylaws, of the votes in the association. Not less than ten
nor more than fifty days in advance of any meeting of the unit owners, the
secretary or other officer specified in the bylaws shall cause notice to be
hand delivered or sent prepaid by United States mail to the mailing address of
each unit or to any other mailing address designated in writing by the unit
owner. The notice of any meeting of the
unit owners shall be physically posted in a conspicuous place, to the
extent that such posting is feasible and practicable, in addition to any electronic
posting or electronic mail notices that may be given pursuant to paragraph (b)
of subsection (2) of this section. The notice shall state the time and place
of the meeting and the items on the agenda, including the general nature of any
proposed amendment to the declaration or bylaws, any budget changes, and any
proposal to remove an officer or member of the executive board.
(2.5)
(a) Notwithstanding any provision in the declaration, bylaws, or other
documents to the contrary, all meetings of the association and board of
directors are open to every unit owner of the association, or to any person
designated by a unit owner in writing as the unit owner's representative. and
all unit owners or designated representatives so desiring shall be permitted to
attend, listen, and speak at an appropriate time during the deliberations and
proceedings; except that, for regular and special meetings of the board, unit
owners who are not board members may not participate in any deliberation or
discussion unless expressly so authorized by a vote of the majority of a quorum
of the board. Here
again remove the line-outs above and let this part of SB 100 remain in force.
An addition is needed here. All members and representatives must be allowed
to express their opinion (freedom of speech) on issues that the board will be
voting on at this meeting.
(b) At an appropriate time determined by the
board, but before the board votes on an issue under discussion, unit owners or
their designated representatives shall be permitted to speak regarding that
issue. The board may place reasonable time restrictions on those
persons speaking during the meeting. but shall permit a unit owner or a unit
owner's designated representative to speak before the board takes formal action
on an item under discussion, in addition to any other opportunities to speak.
Remove the line-outs and let
this right of a member continue in SB 100. CAI wants to control all meeting
and prevent a homeowner from criticizing the board. The CAI removed the above line-outs and
didn’t replace it with any homeowner rights.
If more than one person desires to address an issue and there are
opposing views, the board
shall provide for a reasonable number of persons to speak on each side of an
the issue.
SECTION
6. 38-33.3-310
(1) (b) (I), Colorado Revised Statutes, is amended, and the said 38-33.3-310
(1) (b) is further amended BY THE ADDITION OF A NEW SUBPARAGRAPH, to read:
ROBERTS RULES OF ORDER RUNS MOST OF THE HOA
MEETINGS. LAWYERS DON’T LIKE THIS BOOK OF RULES SINCE IT WAS NOT INCLUDED IN LAW SCHOOL. SO THEY ARE ALWAYS TRYING TO WRITE THEIR OWN VERSION OF RULES TO RUN A MEETING,
NOT FOR THE MEMBERSHIP’S RIGHTS, BUT TO GIVE TOTAL CONTROL TO THE BOARD TO SURPRESS
A TOTAL REMOVAL OF THE BOARD. (Hostile takeover by members)
38-33.3-310.
Voting - proxies. (1) (b) (I) Votes for contested
positions on the executive board shall be taken by secret ballot. and At the discretion
of the board or (HAS TO BE
REMOVED). upon the request
of one or more twenty percent of the unit owners who are
present at the meeting or represented by proxy, if a quorum has been achieved,(MUST
BE REMOVED)
ROBERTS RULES OF
ORDER SAY ONE OR MORE UNITS OWNERS, NOT 20 PERCENT.
a vote on any other matter affecting the
common interest community on which all unit owners are entitled to vote shall
be by secret ballot. Ballots shall be counted by a neutral third party or
by a unit owner who is not a candidate, who attends the meeting at which the
vote is held, and who is selected at random from a pool of two or more such
unit owners committee of unit owners
who are not candidates and not board members. The committee shall consist of volunteers selected or appointed at an
open meeting, in a fair manner, by the chair of the board or another person
presiding during that portion of the meeting. The results of the
a vote taken by secret ballot shall be reported without reference to
names, addresses, or other identifying information.
(III)
This paragraph (b) shall not apply to an association whose
governing documents provide for election of positions on the executive board by
delegates on behalf of the unit owners.
SECTION
7. 38-33.3-310.5, Colorado
Revised Statutes, is REPEALED AND REENACTED, WITH AMENDMENTS, to read: This repeal effort is a
farce. This existing section protects the membership from any director having
a conflict interest in the operation of the HOA.
This entire amendment is a “weasel clause” to allow
all the conflicts of interests committed by directors, so long as the board
approves the conflict. This is a way to approve a conflict after it is
discovery
class=Section11>
This
committee must reject this amendment in its entirety.
38-33.3-310.5.
Executive board - definitions - conflicting interest transactions. (1) As
used in this section:
(a) "Conflicting interest transaction"
means a contract, transaction, or other financial relationship between the
association and a director, or between the association and a party related to a
director, or between the association and an entity in which a director of the
association is a director or officer or has a financial interest.
(b) "Director" means a member of the
association's executive board.
(c) "Party related to a director" shall
mean a spouse, a descendant, an ancestor, a sibling, the spouse or descendant
of a sibling, an estate or trust in which the director or a party related to a
director has a beneficial interest, or an entity in which a party related to a
director is a director or officer or has a financial interest.
(2) No loans shall be made by the association to
its directors or officers. Any director or officer who assents to or
participates in the making of any such loan shall be liable to the association
for the amount of the loan until the loan is repaid.
(3) No conflicting interest transaction shall be
void or voidable or be enjoined, set aside, or give rise to an award of damages
or other sanctions in a proceeding by a unit owner or by or in the right of the
association solely because the conflicting interest transaction involves a
director, a party related to a director, or an entity in which a director of
the association is a director or officer or has a financial interest; solely
because the director is present at or participates in the meeting of the executive
board or of the committee of the board that authorizes, approves, or ratifies
the conflicting interest transaction; or solely because the director's vote is
counted for such purpose, if:
(a) The material facts as to the director's
relationship or interest and as to the conflicting interest transaction are
disclosed or are known to the executive board or the committee, and the
executive board or committee in good faith authorizes, approves, or ratifies
the conflicting interest transaction by the affirmative vote of a majority of
the disinterested directors, even though the disinterested directors are less
than a quorum;
(b) The material facts as to the director's
relationship or interest and as to the conflicting interest transaction are
disclosed or are known to the unit owners entitled to vote on the issue, and
the conflicting interest transaction is specifically authorized, approved, or
ratified in good faith by a vote of the unit owners entitled to vote on the
issue; or
(c) The conflicting interest transaction is fair
as to the association.
(4) Common or interested directors may be counted
in determining the presence of a quorum at a meeting of the executive board or
of a committee that authorizes, approves, or ratifies the conflicting interest
transaction.
SECTION
8. 38-35.7-102,
Colorado Revised Statutes, is REPEALED AND REENACTED, WITH AMENDMENTS, to read:
When a section
is to be deleted and amended it should be shown in it’s entirety for the
committee to read what is being asked to be erased from the law. So I have
copied the entire sections 38-35.7 -102 for you to read.
38-35.7-102. Disclosure - common
interest community - requirement for architectural approval.
Statute text
(1) In every purchase and sale of
residential real property in a common interest community:
(a) The seller shall cause to be
furnished to the buyer, at the seller's expense, all documents required by
section 38-33.3-223 at least ten days before closing in the case of a sale by
owner or within the time limits set forth in section 38-33.3-223 in the case of
a brokered transaction.
(b) (I) The seller shall provide the
buyer with a disclosure statement in bold-faced type that is clearly legible
and in substantially the following form:
"THE BUYER HEREBY
ACKNOWLEDGES THAT THE BUYER HAS RECEIVED COPIES OF THE DECLARATION, COVENANTS,
BYLAWS, AND RULES AND REGULATIONS OF THE HOMEOWNERS' ASSOCIATION OF THE [NAME
OF COMMON INTEREST COMMUNITY], IN WHICH THE PROPERTY IS LOCATED, AND THE BUYER
UNDERSTANDS THAT THESE DOCUMENTS CONSTITUTE AN AGREEMENT BETWEEN THE
ASSOCIATION AND THE BUYER. BY SIGNING THIS STATEMENT, THE BUYER ACKNOWLEDGES
THAT THE BUYER HAS READ AND UNDERSTANDS THE ASSOCIATION'S DECLARATION,
COVENANTS, BYLAWS, AND RULES AND REGULATIONS. THE BUYER ALSO UNDERSTANDS THAT
BY COMPLETING THIS PURCHASE, THE BUYER IS RESPONSIBLE FOR PAYING ASSESSMENTS TO
THE ASSOCIATION. IF THE BUYER DOES NOT PAY THESE ASSESSMENTS, THE ASSOCIATION
COULD PLACE A LIEN ON THE PROPERTY AND POSSIBLY SELL IT TO COLLECT THE DEBT.
THE BUYER ALSO UNDERSTANDS THAT ANY CHANGE TO THE EXTERIOR OF THE PROPERTY MAY
BE SUBJECT TO ARCHITECTURAL REVIEW AND APPROVAL. FAILURE TO SECURE SUCH REVIEW
AND APPROVAL COULD BE A VIOLATION OF THE DECLARATION AND COULD RESULT IN
REMEDIAL ACTION BEING TAKEN BY THE ASSOCIATION."
(II) It shall be the responsibility
of the seller to obtain from the purchaser a signed acknowledgment of receipt
of the information and disclosure statement described in this section, whether
such acknowledgment is incorporated in the contract of purchase and sale or
otherwise, at the time of closing and to deliver such signed acknowledgment to
the association as soon as is practicable thereafter. In the event of the
failure by the seller to provide such information and disclosure statement, the
purchaser shall have a claim for relief against the seller for all damages to
the purchaser resulting from such failure plus court costs; except that, to the
extent that the buyer's damages resulted from the association's failure or
refusal, without legal justification, to provide documents within its control
to the seller despite the good faith efforts of the seller to obtain them, or
because the association did not maintain records as required by section
38-33.3-317, the seller shall not be liable.
(2) This section shall not apply to
the sale of a unit that is a time-share unit, as defined in section 38-33-110
(7).
Annotations
Editor's note: This section is effective January 1, 2006.
What
is wrong with the above section that it has to be deleted? There is nothing
wrong except for the responsibility of passing on to the buyer documents
claiming that the seller is the only one responsible. Here the board, property
manager and CAI lawyer shirk the responsibility of getting the right documents
to a buyer who might be around for 20 years.
The
amendment that is to replace this one above is worse. It issues in bold type,
a threat to the buyer of what is going to happen if you step over the line one
inch and then we will sic our lawyers on you and you can lose your home through
foreclosure, which we know how to win. This shows the arrogance of the CAI and
the sponsors of this bill. We don’ care how ugly our demands are and we don’t
care of we kill property sales, you will never cross us once you are dumb
enough to move into this covenant controlled subdivision.
38-35.7-102.
Disclosure - common interest community - obligation to pay assessments -
requirement for architectural approval. (1) Every contract for the purchase and sale of residential real
property in a common interest community shall contain a disclosure statement in
bold-faced type that is clearly legible and in substantially the following
form:
"THE PROPERTY IS LOCATED WITHIN A COMMON INTEREST
COMMUNITY AND IS SUBJECT TO THE DECLARATION FOR SUCH COMMUNITY. THE OWNER OF
THE PROPERTY WILL BE REQUIRED TO BE A MEMBER OF THE OWNER'S ASSOCIATION FOR THE
COMMUNITY AND WILL BE SUBJECT TO THE BYLAWS AND RULES AND REGULATIONS OF THE
ASSOCIATION. THE DECLARATION, BYLAWS, AND RULES AND REGULATIONS WILL IMPOSE
FINANCIAL OBLIGATIONS UPON THE OWNER OF THE PROPERTY, INCLUDING AN OBLIGATION
TO PAY ASSESSMENTS OF THE ASSOCIATION. IF THE OWNER DOES NOT PAY THESE
ASSESSMENTS, THE ASSOCIATION COULD PLACE A LIEN ON THE PROPERTY AND POSSIBLY
SELL IT TO PAY THE DEBT. THE DECLARATION, BYLAWS, AND RULES AND REGULATIONS OF
THE COMMUNITY MAY PROHIBIT THE OWNER FROM MAKING CHANGES TO THE PROPERTY
WITHOUT AN ARCHITECTURAL REVIEW BY THE ASSOCIATION (OR A COMMITTEE OF THE
ASSOCIATION) AND THE APPROVAL OF THE ASSOCIATION. PURCHASERS OF PROPERTY
WITHIN THE COMMON INTEREST COMMUNITY SHOULD INVESTIGATE THE FINANCIAL
OBLIGATIONS OF MEMBERS OF THE ASSOCIATION. PURCHASERS SHOULD CAREFULLY READ
THE DECLARATION FOR THE COMMUNITY AND THE BYLAWS AND RULES AND REGULATIONS OF
THE ASSOCIATION."
(2)
(a) The obligation to provide the
disclosure set forth in subsection (1) of this section shall be upon the
seller, and, in the event of the failure by the seller to provide the written
disclosure described in subsection (1) of this section, the purchaser shall
have a claim for relief against the seller for actual damages directly and
proximately caused by such failure plus court costs. It shall be an
affirmative defense to any claim for damages brought under this section that
the purchaser had actual or constructive knowledge of the facts and information
required to be disclosed.
(b)
Notwithstanding paragraph (a) of this subsection (2), contracts for the
purchase and sale of residential real property prepared by a licensed real
estate broker shall not be required to contain the disclosure set forth in
subsection (1) of this section until the real estate commission has promulgated
a form of purchase and sale contract, or addendum thereto, that contains such
disclosure, and, until such form has been promulgated, sellers represented by a
licensed real estate broker shall not be liable for failing to provide such
disclosure.
None of the
above paragraphs mean anything. The buyer will have to hire an attorney for
$20,000 to enforce this section and that’s if he can find the seller. ENFORCEMENT OF THIS SB 06-89, SB 100, AND
THE CCIOA IS TOTALLY AT THE COST OF A HOMEOWNER.
(3)
This section shall not apply to the sale of a unit that is a time share unit, as defined in section 38-33-110 (7).
SECTION
1. 10-4-110.8
(5), Colorado Revised Statutes, is amended to read:
10-4-110.8.
Homeowner's insurance - prohibited practices - definitions. (5) (a) In a
common interest community, as defined in section 38-33.3-103 (8), C.R.S., a
unit owner may file a claim against the policy of the unit owner's association
to the same extent, and with the same effect, as if the unit owner were an
additional a named insured if the following conditions are met:
(I) The unit owner has contacted the executive
board or the association's managing agent in writing, and in accordance with
any applicable association policies or procedures for owner-initiated insurance
claims, regarding the subject matter of the claim;
(II)
The unit owner has given the association
at least fifteen days to respond in writing, and, if so requested, has given
the association's agent a reasonable opportunity to inspect the damage; and
(III)
The subject matter of the claim falls
within the association's insurance responsibilities as defined by the
declaration or in an insurance policy listed pursuant to section
38-33.3-209.4 (2) (f), C.R.S.
(b) The association's insurer, when determining
premiums to be charged to the association, shall not take into account any
request by a unit owner for a clarification of coverage.
SECTION
2. Safety clause. The general assembly hereby finds,
determines, and declares that this act is necessary for the immediate
preservation of the public peace, health, and safety.
