SIDE STREETS: Small HOAs seek relief from big-government mandates

When Jan Doran joined the Discovery neighborhood Homeowners Association board in 1995, she found the volunteer job to be relatively simple. The board collected $30 annual dues from each of its 329 homeowners and enforced covenants governing landscaping, house colors and other life in the Rockrimmon neighborhood.

“Things ran pretty smooth,” Doran said.

Things are much more complicated now. Today, her administrative duties include producing tedius meeting minutes, financial records and budget data on a moment’s notice for residents or real estate agents.

There is a Web site to maintain with the bylaws, covenants and budgets.

Rules were rewritten to comply with state mandates on political signs, roofing materials, solar equipment, clotheslines and more.

And Discovery, like all HOAs, has squirreled away money to protect itself against huge legal bills that threaten all HOAs after a 2005 change by the Colorado General Assembly left the boards vulnerable.

All on revenue of less than $10,000 a year. That $30 in dues only goes so far.

“It boils down to fairness to the small HOAs,” Doran said. “These laws were designed for large condominiums and townhouses. Not small HOAs. I think we’re looking for a little less-rigorous governmental involvement.”

Doran and other small HOA officials are trying to do something about what they call unreasonable, big-government mandates. On Tuesday, Doran, HOA attorney Lenard Rioth and others will testify before the House Local Government Committee in favor of a bill to exempt small HOAs from many of the mandates.

Rioth said the bill, sponsored by Rep. Amy Stephens, a Monument Republican, simply gives small HOAs that existed prior to 1992 the same rights as those created after 1992.

That was the year lawmakers enacted the Colorado Common Interest Ownership Act. Small HOAs built after 1992 were exempt from it. Not older HOAs.

“I think it was just an oversight,” said Rioth, who represents more than 100 HOAs in the region.

Stephens’ bill would give small HOAs the option of exempting themselves from CCIOA. To qualify, an HOA must have 20 units or fewer, or collect $400 or less in annual dues or take in gross revenue less than $250,000.

The HOAs would still hold annual elections and they’d be required to meet and keep records. But they would not be liable for massive awards of attorneys fees, Rioth said. He noted that an HOA in Vail recently was ordered to pay $500,000 in attorneys fees for a dispute that dragged on for years over a $5,000 window repair.

“It seems pretty common sense to me,” Stephens said. “These are small boards and volunteers. They don’t have the resources of larger HOAs. Sometimes you can regulate these things to death.”

—

Read my blog updates at
 gazette.com/blogs/sidestreets