Governor Ritter Signs HOA Ombudsman Bill

Colorado Governor Bill Ritter recently signed into law House Bill 1278, commonly referred to as the HOA Ombudsman Bill. The new law establishes an HOA Information and Resource Center within the Division of Real Estate and creates the position of HOA Information Officer, the purposes of which are discussed below. Of particular note to all HOA representatives is a new annual registration requirement for all unit owner associations, together with an obligation to pay a yearly registration fee, and serious consequences for any failure to register.

The law becomes effective January 1, 2011, at which time all unit owner associations must register with the Colorado Division of Real Estate and pay an annual registry fee. The amount of the fee will be set by the Division of Real Estate, based on the estimated cost to run the new Center, but is capped at $50 per association per year. It is estimated that the fee will be closer to $20 per year. Any association with annual revenues of $5,000 or less will not be subject to the annual fee. No information is currently available as to the specific procedures for registering; however, an association's failure to register or to keep a registration current renders it ineligible to impose or enforce an assessment lien or to enforce certain covenant violations until the registration is made current. Unregistered associations, should they prevail in litigation, also will not be eligible to recover attorneys' fees. A lapse in registration will not, however, extinguish a previously filed lien.

The stated purposes of the Center and its Information Officer as recited in the Bill are to act as a clearinghouse for information governing the basic rights and duties of owners, declarants and associations, to track HOA inquiries and complaints and to produce an annual report to the Director of the Division of Real Estate as to these inquiries and complaints. However, the Bill is generally viewed as an introductory stage in the creation of an ombudsman's office similar to those established in Nevada and Florida, which offices involve themselves more directly in the resolution of disputes between associations and their members. Rep. Su Ryden (D-Aurora), co-sponsor of the Bill, gives insight into the ultimate purpose of the Bill by stating: "This is an important first step in gathering information about the depth and breadth of problems so we can determine if existing remedies are sufficient." Current Colorado law encourages the mediation of disputes by requiring associations to adopt dispute resolution guidelines, but no formal requirement for mediation exists. While the HOA Information and Resource Center is not currently empowered to mediate disputes on behalf of unit owners, it may quickly evolve into the "ombudsman" role that the new law's informal title suggests.

We intend to provide follow-up communications to you as further information becomes available.

If you have any questions regarding this article or its possible impact on your activities and operations, please contact your Sherman & Howard attorney or one of the attorneys in our Real Estate Group.

Sherman & Howard has prepared this advisory to provide general information on recent legal developments that may be of interest. This advisory does not provide legal advice for any specific situation. This does not create an attorney-client relationship between any reader and the Firm. If you want legal advice on a specific situation, you must speak with one of our lawyers and reach an express agreement for legal representation.

	Contact Us Services Attorneys News and Events Publications About the Firm Inclusiveness Careers In the Media Events and Registration Press Releases Speaking Engagements Articles Client Advisories Subscriptions History Offices Pro Bono Interlaw Contact Us Culture Legal Opportunities Support Staff Publications Client Advisories Home > Publications > Client Advisories > View Governor Ritter Signs HOA Ombudsman Bill Colorado Governor Bill Ritter recently signed into law House Bill 1278, commonly referred to as the HOA Ombudsman Bill. The new law establishes an HOA Information and Resource Center within the Division of Real Estate and creates the position of HOA Information Officer, the purposes of which are discussed below. Of particular note to all HOA representatives is a new annual registration requirement for all unit owner associations, together with an obligation to pay a yearly registration fee, and serious consequences for any failure to register. The law becomes effective January 1, 2011, at which time all unit owner associations must register with the Colorado Division of Real Estate and pay an annual registry fee. The amount of the fee will be set by the Division of Real Estate, based on the estimated cost to run the new Center, but is capped at $50 per association per year. It is estimated that the fee will be closer to $20 per year. Any association with annual revenues of $5,000 or less will not be subject to the annual fee. No information is currently available as to the specific procedures for registering; however, an association's failure to register or to keep a registration current renders it ineligible to impose or enforce an assessment lien or to enforce certain covenant violations until the registration is made current. Unregistered associations, should they prevail in litigation, also will not be eligible to recover attorneys' fees. A lapse in registration will not, however, extinguish a previously filed lien. The stated purposes of the Center and its Information Officer as recited in the Bill are to act as a clearinghouse for information governing the basic rights and duties of owners, declarants and associations, to track HOA inquiries and complaints and to produce an annual report to the Director of the Division of Real Estate as to these inquiries and complaints. However, the Bill is generally viewed as an introductory stage in the creation of an ombudsman's office similar to those established in Nevada and Florida, which offices involve themselves more directly in the resolution of disputes between associations and their members. Rep. Su Ryden (D-Aurora), co-sponsor of the Bill, gives insight into the ultimate purpose of the Bill by stating: "This is an important first step in gathering information about the depth and breadth of problems so we can determine if existing remedies are sufficient." Current Colorado law encourages the mediation of disputes by requiring associations to adopt dispute resolution guidelines, but no formal requirement for mediation exists. While the HOA Information and Resource Center is not currently empowered to mediate disputes on behalf of unit owners, it may quickly evolve into the "ombudsman" role that the new law's informal title suggests. We intend to provide follow-up communications to you as further information becomes available. If you have any questions regarding this article or its possible impact on your activities and operations, please contact your Sherman & Howard attorney or one of the attorneys in our Real Estate Group. Sherman & Howard has prepared this advisory to provide general information on recent legal developments that may be of interest. This advisory does not provide legal advice for any specific situation. This does not create an attorney-client relationship between any reader and the Firm. If you want legal advice on a specific situation, you must speak with one of our lawyers and reach an express agreement for legal representation. © 2010 Sherman & Howard L.L.C. June 30, 2010 Copyright 2000-2012 Sherman & Howard L.L.C. All rights reserved. Privacy Policy \| Terms of Use