Today in the Colorado Senate Local Government & Housing Committee SB23-178 passed a bipartisan vote unanimously. The bill, which has bipartisan sponsors as well, raised several issues that go beyond the HB21-1229 limits already in place in CCIOA (Colorado Common Interest Ownership Act) that ensure that HOAs no longer ban xeriscaping entirely.
The bill takes a revolutionary step forward in enforcing statutes on HOA Boards who drag their feet on changing their written policies as we saw with the Poudre Overlook HOA Board in response to HB22-1137. While I volunteered for the Board and tried to put revising our policies on the agenda from June of 2022 through January of 2023, Directors Ballweber and Jones obstructed compliance by postponing the deliberation indefinitely with a tabling motion at the 9/13/22 meeting. It was noteworthy that Mr. Flanary, who called HB22-1137 “convoluted” then joined the Board in December of 2022, but yet it still was not a priority – until the Board found it could not enforce a removal of a dog from a home without this compliance.
In the 9/13/22 meeting, I raised the issue that Director Ballweber’s policy, which was not written by a paid HOA attorney (likely her husband or Mr. Flanary, neither of whom are practicing Colorado HOA attorneys), was insufficient for compliance. I insisted that several policies had to be revised, and was treated with ridicule and anger for having asserted that opinion. Yet, in the end, that was what had to be done – per every HOA attorney the Board subsequently interviewed.
SB23-178 recognized that this is a problem in HOA’s across Colorado. Certain homeowners, some of whom are attorneys (or former attorneys) themselves decide that their interpretation of the law becomes the interpretation of the Association – often without an actual consultation with an actual HOA attorney. As a result, SB23-178 makes it legally actionable to give an HOA Board a notice with 45 days to comply with the law – without having to form a quorum with their neighbors, or hire an attorney themselves.
If the Board continues not to comply, then the last resort is that the homeowner, again acting without a need for quorum, petition, or any other bureaucratic steps, may file litigation (even in Small Claims Court) to enforce the new statute upon the Board. If the Board has not revised its policy, there is no need for the homeowner to prove financial damages – there is a $500 statutory penalty.
But, the legislation goes a step further, because in many cases, while a homeowner may win such a case, Colorado judges are reluctant to make HOAs pay the homeowner’s legal fees. SB23-178 automatically awards legal fees to the plaintiff – which eliminates the “When you win, you still lose” status quo for homeowners forced to use the courts to enforce rules on the Board. It is yet to be seen if the Directors who knew or should have known that compliance was necessary could be held individually liable for those legal fees – as the other homeowners should not be forced to foot the bill.
This is not to say that anyone actually wants more litigation. In fact, what this does is gives homeowners who are acting as compliance officers the ability to give notice with a definitive timeline to AVOID having to go to court. Any competent attorney advising the Board (or the Insurance company) would be foolish to advise Directors to dare a homeowner to file litigation. The obvious choice is to simply revise policies to comply with the law in a timely manner.
My testimony to the Committee is copied below.
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TESTIMONY OF ANDREW MOWERY 3/28/23
Thank you Madam Chair for the opportunity to speak on this bill. My name is Andrew Mowery, and I am here representing myself. I live in Poudre Overlook HOA in Fort Collins, and support this bill. My wife and I have been gardeners growing fruits and vegetables in raised bed planters in our side yards for 23 years, and have xeriscaped the rest of our property to be water wise.
This Bill has very important enforcement mechanisms. HOA Boards regularly violate CCIOA, but homeowners who attempt to enforce rules on the Boards are denied access to the agenda, hearings, and Alternative Dispute Resolution. Too frequently, Courts then become the sole remaining option. However, many provisions in CCIOA lack key elements for a homeowner to state a claim upon which relief may be granted, let alone guarantee reimbursement of legal fees.
This bill makes it a violation for an HOA to have a policy that violates these new statutes, not just if they take actions that violate the statute. Many HOA Boards who don’t like new CCIOA statutes simply ignore updating the documents. This addresses that practice squarely, but needs an amendment to put a deadline on updating rules and guilelines to be compliant.
By having statutory penalties and automatic payment of legal fees, deep pocketed Insurance Companies can no longer defend HOA Board scofflaws with Motions to Dismiss. Financial Relief is often hard to define, measure, or prove when the Boards also hide or destroy documents. Furthermore, even if a homeowner can get past a Motion to Dismiss, often they do not get their legal fees paid. So you may win judgement, but you lose financially. This rebalances the playing field so that homeowners have a means of exercising their rights of oversight and compliance on Boards who are scofflaws without risking bankruptcy over legal fees.
The point here is not to win in court, but to stop the practices of being ignored, ridiculed, or threatened in order to get an HOA Board to comply with the law. By having statutory claims and penalties and statutory reimbursement of legal fees, a homeowner has the leverage to overcome HOA Board scofflaws. I feel the Colorado Legislature is finally starting to address this imbalance, and the courts will benefit with less lawsuits.
Please vote Aye on this important bill that protects gardeners like my wife and I from HOA Boards and Managers who think Colorado landscaping needs to look like the Midwest to protect property values.