Exemptions gone under new law for HOA registration

All homeowner associations in Colorado must register with the state under a new law that went into effect this month, including those previously exempted.

In a reminder notice sent to HOAs on Wednesday, the Colorado Department of Regulatory Agencies said its 2012 ruling, which exempted from registration associations formed before 1992 that elected not to be under the Colorado Common Interest Ownership Act, is no longer valid, thanks to a law that went into effect Aug. 7.

Last year, the Colorado Legislature approved a new law that required larger HOAs to register with the state.

This year, however, state lawmakers went one step further under HB1134. That new law requires that all HOAs, regardless of when they were formed, register with the Colorado Division of Real Estate each year. The law, however, does exempt HOAs that collect less than $5,000 in annual dues from having to pay the $16 registration fee.

The new law is one of several passed in recent years designed to crack down on HOAs after a spat of complaints the department has received about how they operate. State officials had said they could do little about the largely unregulated quasi-governmental groups. Complaints included overzealous management to questionable debt-collection techniques.

As a result, not only do HOAs have to register, but their managers must be licensed, too.

That new requirement, mandated under HB1277 and also enacted by the Colorado Legislature earlier this year, requires managers to be at least 18, have a high school degree, pass a competency test, undergo a criminal history check and obtain professional malpractice insurance.

The Legislature this year also passed a new law limiting how associations can collect debt from unpaid dues and fines.

Under that new law, associations are prohibited from referring debt to a collection agency until they first notify the homeowner of the total amount due, explaining how the debt was incurred; allow homeowners to enter into a payment plan; and explain other ways to pay off the debt, including going through foreclosure proceedings.

Last year, the Legislature also required associations to create and store documents just like other government entities. Now, they must maintain meeting minutes, construction defects records, written communications and a record of votes cast by HOA board members.

Before the law was enacted, several associations would deny access to documents — even to their members — unless they could state a “proper purpose” for wanting to see them.

The law requires the records to be maintained for as little as one year for such things as voting records to as many as seven years for tax returns. The associations are allowed to withhold from public view such things as communications with legal counsel and the names, addresses and other personal information of their homeowners.


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