Homeowner's Associations

Given that approximately 2 million people in Colorado belong to a homeowners association – there are 8,000 such associations active in Colorado, a low number, in my view -  it is not surprising that the uneven, often poor performance by homeowners’ associations continues to make the news.  A front page article of the Denver Post February 13, 2012 edition reads “HOA house may get put in order.”  According to the article, the legislature is once again pondering how to make homeowners associations function more efficiently and reliably.  In 2010, the General Assembly created a Homeowners Association Information Center within the Colorado Division of Real Estate.  Starting in 2011, HOAs are required to register with the division.  The registration is good for one year.  In 2011, the state received several hundred complaints, many of them focused on HOA management.  Other complaints were centered on failure to supply or make records accessible, failure to listen to the concerns of homeowners, lack of proper maintenance, harassment and retaliation, and selective enforcement of association covenants.

            The Rocky Mountain Chapter of the Community Associations Institute is proposing that managers become licensed by the state.  According to the Denver Post, nine states and the District of Columbia either license or regulate managers of HOAs. Licensing of managers would involve training in the basic areas of responsibility of an HOA, such as the collection of dues, preparation of budgets for submission to the board of directors, maintenance and repairs of the building(s) and association grounds, enforcement of the covenants, just to mention some.  Licensing will generate costs, some of which would have to be borne by the association.

            The proposal for licensing of managers may be meritorious.  But unless the members of the association take an active part in the governance and management of their association properties, the problems which have given rise to frustration and complaints will not go away. This is especially true of older condo projects – those which were built 25 years ago.  Without a vigilant oversight of the manager by the board of directors of the association, the potential for problems and well-grounded complaints will remain.  Hence, unless the individual association members are willing to participate in the tedious task of governing of their community,  are prepared to serve on governing boards and committees, and are able to maintain  a good working relationship with the manager and her staff, there is no reason to think that licensing of the manager will improve the situation and reward the owners with a well-run, desirable community in which theyhave chosen to live and have invested a substantial amount of money.