New law aims to ease friction between homeowners, HOAs

By Debi Brazzale
La Junta Tribune-Democrat
Jul 15, 2010
http://www.lajuntatribunedemocrat.com/news/business/x680547003/Home-Owner-Association

Homeowners caught up in legal wrangling and unsettled questions, and some lawmakers, are hoping the wild, wild, west of HOAs will be slightly more tame next year when a new state law kicks in – creating a clearing house of information that homeowners and HOAs can go to before heading to court.

When House Bill 1278 was introduced earlier this year, it provided for an ombudsman to advocate on behalf of homeowners to mediate disputes, and to function as a clearing house for issues arising out of Home Owner Associations (HOAs).  However, the bill, sponsored by Rep. Sue Ryden, D-Aurora, and Sen. Morgan Carroll, D-Aurora, was subsequently amended, leaving only the clearing-house portion of the bill with an information officer overseeing the information.

Rep. Joe Rice, D-Littleton, who presided over the committee hearings for HB1278 and supported the measure, said that he saw the need for a state-run HOA clearing house and is hopeful it will have a positive impact when it is put in place in January of 2011.

"Clearly there are some problems out there," said Rice.  "There are things that both homeowners and HOAs don’t understand and they don’t know how to resolve it without an attorney and incurring legal costs. My hope is that this (the clearing house) will be a place where issues can be resolved before going any further."

While most HOAs are now formed when a new development is built and membership is part of the deed to the property, some older associations are voluntary in nature, much like a club or co-op and the bylaws and covenants are not binding on homeowners that choose not to join.

Attorney Bob Hoban, who represents homeowners against what he characterizes as "HOA’s gone wild," said that he is seeing a trend that he finds disturbing where law firms are seeking out voluntary homeowners associations and shaping them into more powerful entities — and he has a theory as to why the trend is occurring.

"Local governments are trying to see that HOAs increase in power and funding ability so that they can parcel out their responsibilities on the HOA,  i.e., trash collection, etc.," said Hoban.  "They welcome the expansion of these so-called voluntary HOAs.  The law firms recognize this and go out seeking these associations perpetuating more powerful HOAs thereby expanding their client base and making a pile of money."

Hoban said he also believes that the clearing house will be beneficial in the long run.

"From what I see in dealing with property owners and home owners associations, I don’t see any other way to stop this slippery slope of what we’re seeing here unless there is some sort of government oversight," Hoban contended.  "The creation of this office is well-intentioned and a very good thing – if it remains a clearing house of information and doesn’t become just another government bureaucracy."

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