Introduced Legislation May Adversely Impact HOAs

Aaron J. Goodlock – February 8, 2022

On January 12, 2022, the Colorado legislative session commenced.  Lawmakers introduced several bills that, if enacted, would directly affect HOAs. Certain aspects of these bills may adversely impact common interest community homeowners, boards of directors, managers, and other stakeholders. A summary of HOA legislation introduced so far follows:

legal docs SB 22-060 To Limit Assessment Increases (Senator J. Bridges)

  • The intent of this bill is to limit assessment increases to 10% per year.
  • This could substantially harm communities that face unexpected, unforeseen, and unbudgeted expenses (e.g., payment of a wind/hail deductible). The same is true for communities with historically underfunded reserves.

HB 22-1040 Homeowners’ Access to Common Areas (Reps. E. Hooton and J. Rich)

  • The bill substantially limits the ability of associations to close any portion of the common elements or common areas, including on a temporary basis (e.g., closing pools, fitness centers, and other facilities as many communities did during the pandemic for the health and safety of residents, and to limit the risk of liability).
  • The bill states that associations may restrict access to portions of the common elements only to the extent and for the length of time necessary to (a) protect the safety of any individuals during the performance of the maintenance, repair, replacement, or modification of the common element, or (b) to preserve the structural integrity or condition of a repair, replacement, or modification.
  • If an association must restrict or prohibit unit owners’ access to one or more common elements for more than 24 hours, the association must provide notice to each unit owner. Additionally, they must post a visible, clearly legible notice at each physical access point to the common element. This must include specific information regarding the reason for the closure.
  • This bill may be problematic as it exposes associations to greater risks of liability if facilities must remain open regardless of potential health and safety risks.
  • To the extent the association must close any portion of the common elements, it would be expensive and time-consuming to satisfy the notice and other requirements required by the bill.

SB 22-059 Limitations on Use of Proxies (Senator C. Holbert and Reps. E. Hooton and K. Ranson)

  • The bill limits the duration of a proxy to 11 months. It also requires that the proxy state the specific association meeting and specific matters for which it is granted.
  • For the proxy holder to vote at a different meeting or on different matters than the ones stated in the proxy, the proxy holder must seek further authorization.
  • The bill also requires that for associations with 50 or more units, a proxy holder cannot hold proxies representing more than 5% of the units unless proxies representing more than 5% of the units are granted solely for the purpose of establishing a quorum for an association meeting.
  • This bill may adversely impact the ability of associations to obtain sufficient participation to vote on matters that are critical to the community. It limits the ability of owners to participate and vote in meetings by granting a proxy to an individual of their choice to cast their vote.
  • Certain proxies may not be counted if it is determined that a single individual was granted more than 5% of the proxies. In these cases, the associations may incur additional time and expense to conduct additional meetings and hold additional votes.

Lawmakers drafted additional HOA legislation but have not yet introduced the bills. Interested or concerned homeowners, board members, managers, management companies, and others can seek to support or oppose proposed legislation by contacting your state senator and/or representative. Find your legislator here.

Learn More About HOA Legislation

Your voice is important on behalf of yourself and your community. You may influence reform, including support for amendments to improve or kill the proposed bills.

To view the proposed HOA legislation as introduced, click the links below:
SB 22-060
HB 22-1040
SB 22-059

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