Back in December 2010, we issued a Client Alert detailing Colorado’s new HOA registration requirements. In that alert, we noted three issues in particular with the new law:
- Our analysis indicated that the registration requirements were subject to some unintended exemptions, most notably applicable to those HOAs formed before July 1, 1992.
- Considering that the Colorado Common Interest Ownership Act was intended in part to promote solvent home owner associations, the penalty for failing to register – the loss of assessment enforcement rights – seemed a bit excessive.
- The information required to make the registration, which included the reception number or book and page for the declaration creating the common interest community, appeared somewhat unnecessary for this type of information filing.
After going through one filing period, it appears that our concerns were shared by others:
Pre-1992 HOAs ARE Exempt
After consulting its legal counsel, the Colorado Division of Real Estate issued a Position Statement on the HOA registration requirement on March 1 (notably after the revised 2011 filing deadline set by emergency rule). The Position Statement provides that home owner associations:
not formed prior to [July 1, 1992] are exempt from the jurisdiction of the Colorado Common Interest Ownership Act (the “CCIOA-Exempt”) . . . Therefore, it is the position of the Director of the Division of Real Estate that homeowners’ associations formed prior to July 1, 1992, that have not elected treatment under CCIOA, are not required to comply with the [HOA registration requirement].
Clean Up Bill Fails
Without referencing the Policy Statement, SB 253 was introduced in the final days of this Colorado legislative session. This clean-up bill would have: (i) clarified that the failure-to-file penalty operated as a “suspension,” not invalidation, of HOA assessment rights; (ii) eliminated the unintentional pre-1992 exemption; and (iii) rationalized the information required to make the registration.
Although the bill passed the Colorado Senate and was unanimously referred out of the House committee with a favorable recommendation, SB 253 was killed in a procedural move, reportedly based upon a single constituent concern.
As the next HOA registration filing period concludes before the 2012 Colorado legislative sessions begins, HOAs should follow the same filing procedures as they did in 2011. Unless special circumstances apply, outside legal assistance is most likely unnecessary in making the 2012 filing. For more information on the filing requirements, see these FAQs published by the Colorado Division of Real Estate.