SECOND CCIOA BILL INTRODUCED–Revoking the Lien Rights of Small and Limited Expense Communities

David A. Firmin | Tuesday, January 28, 2014 | State Legislation

In what has been a slow start to the HOA legislative season, a second bill was introduced in the Senate yesterday.  SB 14-140, as drafted, proposes revoking the lien rights of Small or Limited Expense planned communities unless these communities amend the declaration and “opt in” to all of the Colorado Common Interest Ownership Act. 

Currently Section 116 of CCIOA contains exceptions for small non-residential associations as well as associations with limited expenses.   As these types of associations are exempted from almost all provisions of CCIOA, they have not had to adopt any of the SB 100 good governance policies, including the HB 13-1276 collection policy.  This bill amends Section 116 by removing any lien rights the association may have, unless the declaration provides that all of CCIOA is applicable.  Since small and limited expense associations have not had to comply with the requirement of adopting good governance policies, this bill seems to be geared at trying to bring these types of associations into CCIOA, to give the owners in the community more protections.  If a small or limited expense association chooses not to amend its declaration to have all of CCIOA apply, SB 14-140 will have a drastic impact on the association’s ability to collect assessments in the future.

We will keep you apprised as this bill moves through the system.

Comments

Are they trying to bankrupt these communities? Who is sponsoring this bill? I manage 2 limited expense communities and both have adopted ALL SB 100 policies, including HB 13-1276 as they are good business policies and the Association's wish to follow CCIOA as close as possible. It is not an easy task to get votes to amend the declaration to now be subject to CCIOA in order to file liens and collect past due assessments, especially when the community is 400+homes and requires 67% to vote in favor. Come on! Focus on important issues the HOAs are facing!

This is ridiculous. Most small or limited expense communities don't have these problems. As usual, government wants ridiculous, not thought out solutions, for a few bad apples. And why subject all of CCIOA? If they want owners subject to the collections/lien bill, then amend CCIOA to subject small our limited expense communities to be subject just to that. The three HOAs I'm in have no problems at all.

Has this been a problem? If so, I was not aware of it. I would need to hear all the arguments, but my initial feeling is that this is a heavy-handed "solution" to a "problem" that doesn't exist. You know, a solution looking for a problem. What group or groups is or are behind this? Amending the declaration will be a boon for attorneys, I can tell you that, as most will view this as an opportunity to perform a complete re-write for the communities they represent, at a cost of thousands of dollars, and then, the amended document would still have to be approved by 2/3 of the owners. Wouldn't it be easier to pass a law saying that all CICs are governed by CCIOA, without singling out any particular ones, and without threatening them? Any way, this whole CCIOA thing has gotten 'way out-of-hand, with annual amendments by every Tom, Dick and Harry who knows little or nothing about the operation of CICs. And without enforcement provisions or penalties, the entire body of law is followed only by attorneys, as the common homeowner is virtually shut-out from invoking its provisions, unless he or she wishes to spend thousands of dollars and years of time pursuing it.

This bill is devistating for the small HOA. There are 42 homes in our HOA and we have been functioning very well for 20 years. We do not have any paid administrators. We do not have an attorney on retainer. While collecting dues has not been a problem to date, this bill would hinder our ability to collect past due bills. The costs associated with this bill could wipe out our reserves.

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