Getting your player ready...
State Sen. Morgan Carroll, D – Aurora, wrote the law on homeowner associations. The bill, passed last year, for the first time requires HOAs to register with the state, and provides an online site with the Department of Regulatory Agencies, where residents of communities can file complaints.
Carroll this week answered some questions regarding HOAs with InsideRealEstateNews.
IREN: Sen. Carroll, have you heard horror stories from HOAs and residents of HOA-communities being hurt because of the record number of foreclosures in recent years? If so, do you think anything can be done to address this problem?
Carroll: Definitely. Liens and foreclosures are increasing. While liens are not an unusual way ensure debt collectors get paid it is unusual that Colorado allows HOAs to foreclose on homes (a) even if current with the mortgage; and (b) there is no de minimus amount or minimum dollar figure necessary to trigger arrears. Colorado could change that law, but given that it was in an earlier version of SB 100, the votes are not there right now to pass it.
IREN: Tell us about the new statute (HB 10-1278) that requires HOAs to be registered with DORA. What is the intent of it? Is it mostly just to get a handle on the number of HOAs in Colorado and create a database?
Carroll: I happen to like it because I authored it. The intent is so we know how many HOAs we have, can get free information out to homeowners and HOAs about FAQ on rights and responsibilities so people don’t have to go to court or spend a lot of many to get good, basic information.
It is also important to create the database to track complaints so people can ascertain the breadth and scope of various problems. Are problems rare and isolated or commonplace? The data will tell.
IREN: Along the same lines, do you see value in allowing people to file complaints with HOAs online through DORA? So far, they have received 160 complaints, according to information I received this morning?
Carroll: Clearly, it is both an important accountability mechanism for HOAs, but also a critical way to help evaluate our public policy in this arena to understand if we are dealing with just a few bad actors or a wide-scale problem.
IREN: Do you think that HOA property managers should be licensed, much like real estate brokers?
Carroll: I think it’s a good idea. But Colorado is an anti-regulatory state, which would make passage unlikely. Few other states do it, and we don’t have the money to pay for it.
IREN: Sen. Carroll, are there any other issues regarding HOAs that you would like to address?
Carroll: I think people should have a right to basic information about their rights and responsibilities without have to litigate or spend money on attorneys to resolve these disputes.
It is the basis not only for the information office I created, but also why I created an HOA mediation program through the judicial department.
Most conflicts can be avoided when HOA board members follow their own rules and realize that they are elected officials that need to serve their homeowner constituencies well and when homeowners read their covenants, declarations and bylaws and pay their dues on time.
