SIDE STREETS: Lawmakers want to regulate HOAs gone wild

April 28, 2010
BILL VOGRIN
THE GAZETTE
http://www.gazette.com/news/vogrin-97841-colorado-springs.html

They are out there. Perhaps 12,000 strong. Nobody knows for sure.

We see evidence of them: tales of secret meetings, hidden financial documents, mishandling of money. Oh, and the petty wars they engage in for power.

I'm talking about Colorado homeowners associations, of course. And if Sen. Morgan Carroll and Rep. Su Ryden get their way, we'll soon have a much better handle on HOAs and problems associated with them.

Carroll and Ryden are a pair of Aurora Democrats who are sponsoring a bill in the General Assembly to create a new state office to educate residents of HOAs about their rights and responsibilities.

A two-person HOA Information and Resource Center would be housed within the Division of Real Estate. It would gather information about the growing number of HOAs, track complaints about HOA abuses and issue reports to lawmakers. It would be funded by a $15 to $20 fee paid annually by each of Colorado's estimated 12,000 HOAs.

The bill cleared the House and won approval from a Senate committee. It has another committee to clear before it reaches the full Senate for consideration.

Originally, the bill created an HOA ombudsman to advocate for the estimated 1.6 million people who live in state HOAs – neighborhood, townhome, condominium and timeshare.

Nevada pioneered the concept in 1997 to help people resolve HOA disputes besides suing in civil court. Today its ombudsman has a $1.5 million budget and a staff of 15.

The Colorado ombudsman would have mediated disputes and investigated allegations such as open meetings violations, arbitrary covenant enforcement and HOA dues theft.

But the bill was amended after lobbying by homebuilders and HOA industry groups who viewed it as unleashing a state regulatory agency to interfere in private contractual agreements between homeowners.

The HOA clearinghouse is a more modest approach.

"We've definitely had an unbelievable volume of problems but no public resources to help people with these issues," Carroll said. "We don't track HOAs. We don't even know how many we have in the state now. This will give us a registry to know who they are, where they are and track complaints. This will give us some data to better understand what's happening."

Carroll is well-known in HOA circles as the co-sponsor of the Homeowners Bill of Rights in 2005. That law ordered HOAs to open their meetings, financial records and operations to residents. It also voided many covenants regulating the display of American flags, landscaping, yard signs and parking. But HOA issues persist.

"We've heard from a lot of homeowners associations who are glad we are doing something," Ryden said. "This will help us get a grip on the issues and see how deep they really are. It will be a start."

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