Wednesday, August 18, 2010

Who regulates HOAs?

We receive many questions about Homeowners Associations at the Division of Housing, although we do not in any way track, register or regulate these associations.

However, since the passage of House Bill 10-1278, homeowners associations must register annually with the Colorado Division of Real Estate. The bill also creates the HOA Information and Resource Center which is housed at the Department of Regulatory Agencies.

Today, The law firm Otten, Johnson (et al) issued an advisory on the new law, which in part reads:

HB 1278 also creates the HOA Information and Resource Center which is to be headed by the "HOA Information Officer" appointed by the Executive Director of the Department of Regulatory Agencies, which appointment is expected to occur in the late fall or early winter of 2010. The HOA Information and Resource Center is to (a) serve as a clearing house for information concerning the basic rights and duties of unit owners, developers, and unit owners' associations under CCIOA, and (b) track and report inquiries and complaints regarding HOAs to the Division of Real Estate.

HB 1278 grants the Director of the Division of Real Estate the power to adopt rules as necessary to implement HB 1278. Because HB 1278 speaks in fairly general terms, the operations and impacts of the HOA Information and Resource Center and the HOA registration requirements will likely be determined by the scope of the adopted rules. Given that this is the Division of Real Estate's first real involvement with HOA operations, it will be interesting to see how far the Division will extend its oversight over the formation and operation of HOAs through future regulations.

Otten Johnson's interpretation is also that HB 10-1278 "applies not just to what are common called HOA's but also apply to all property owners' associations under the Colorado Common Interest Ownership Act (CCIOA)."