Delays at HOA Information and Resource Center

Otten Johnson Alert December 2010

In August, we informed our clients that a new Colorado law, House Bill 10-1278, will impose registration requirements on owners' associations, effective January 1, 2011. This new law provides that an owners' association ("HOA") that fails to register or keep its registration current will lose its rights under the Colorado Common Interest Ownership Act ("CCIOA") to impose or enforce assessment liens and to collect costs and attorneys' fees expended in enforcing assessment obligations. The law also creates the HOA Information and Resource Center to serve as a resource for HOAs, owners and developers to understand their basic rights and duties.

Although rules have still not been adopted, we have learned more information from the Division of Real Estate (the "Division"). The Division is currently updating its licensing database to provide for online registration of HOAs. While House Bill 10-1278 takes effect on January 1, 2011, it appears from the Division's website that the Division does not expect to have online registration available until after that date. However, once the system is ready, the Division has indicated that HOAs will be given a period of time to register before they would be at risk of losing their rights to impose or enforce assessment liens. The Division has not yet expressed the length of that period of time, but plans to announce when registration is available on its website.

The new HOA Information and Resource Center will be staffed by the HOA Information Officer and one other full-time employee. The Department of Regulatory Agencies is in the process of hiring the HOA Information Officer. Although this person will track complaints and answer inquiries, neither the Division nor the HOA Information Officer will have the authority to investigate complaints or impose sanctions against an association. Rather, the HOA Information Officer will provide an annual report regarding these complaints and inquiries. After the HOA Information Officer is hired, he or she will ensure that the registration process is running smoothly and begin rulemaking. The Division has said that the public can expect rulemaking in the first few months of 2011. The first issues to be addressed will be the ambiguities in the law that have been brought to the Division's attention by the public, such as whether HOAs that were not created under, or are not governed by, CCIOA are exempt from registration. We will continue to keep you informed on the progress of this new law.

Otten Johnson's Real Estate practice group has substantial experience in dealing with CCIOA-related issues. For more information on this Client Alert or on how CCIOA might impact you, please contact any of the attorneys in the Real Estate practice group (for a listing, click here).

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