Colorado SB100 - Educational Requirements

Started by WoodyB • 5 replies • 2409 views

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WoodyB (Colorado)
Posts: 9

Posted:

My question concerns the Colorado SB-05-100 bill 38-33.3-209.7.OWNER EDUCATION...which states:

"THE ASSOCIATION SHALL PROVIDE, OR CAUSE TO BE PROVIDED, EDUCATION TO OWNERS AT NO COST ON AT LEAST AN ANNUAL BASIS AS TO THE GENERAL OPERATIONS OF THE ASSOCIATION AND THE RIGHTS AND RESPONSIBILITES OF OWNERS, THE ASSOCIATION, AND ITS EXECUTIVE BOARD UNDER COLORADO LAW. THE CRITERIA FOR COMPLIANCE WITH THIS SECTION SHALL BE DETERMINED BY THE EXCUTIVE BOARD."

Well the majority of this provision seems fairly straight forward. It's the last sentence that throws an ambiguous wrench into the works. Regardless it would seem that the board must set up a formal meeting that would allow any owner(s) to ask questions about their rights and HOA responsibilites and to receive informative insights from a legal professional.

However, our board has been dodging this question ever since we first learned of the bill last summer. Now they say that they are going to provide information during monthly meetings (which only a handfull attend) or in a newsletter. They also mention that they would provide information at the annual meetings. Well the problem with that is that we never have enough time to talk about the budget and elect (the same) BOD members much less dealing with educational requirements.

Anyone have a suggestion as to how their homeowners have dealt with getting the board to act properly concerning this matter? After all, knowledge is power.

Thanks....woody b

RogerB (Colorado)
Posts: 5,067

Posted:

WoodyB, the board is not required to set up a formal meeting. The means of providing the education is not defined. It could be by any one or more of several means including newsletter, mail out, seminar, meeting, posting on web site, etc.

RogerB

WoodyB (Colorado)
Posts: 9

Posted:

Thanks Roger....but it still seems that the purpose of this requirement was set up to give the owners a real chance at having their numerous questions about the board's conduct answered without fear of reprisal or intimidation at the regular board meetings.

Thanks again, woody b

EdR (Texas)
Posts: 170

Posted:

WoodyB:
From what I've been able to determine (in TX) is there are two things a board of directors can be sued for--fiduciary malfeasance, and not enforcing the restrictions set out by the CCRs and Bylaws. If sued for the fiduciary irresponsibility, and it is done in bad faith, they are personally responsible. This is a good thing because the security of D&O insurance is why they all flounder around aimlessly thinking they can get by with everything anyway, plus the fact the the MCs (in TX) are indemnified thru board's insurance and they have no responsibility either--I call it a circle jerk. So, although a threat of a lawsuit might not be very sweet, you can put together a list of questions for the board to answer, that will let them know exactly where you are headed if you do not get financial information and/or the deed restrictions are not enforced. Our members are working on a class action right now, and there are some directors sitting up and taking notice AND worrying about their spend-thrifty attitudes with others' monies (based on our letter with specific questions). In fact, good directors are resigning based on ,not so much having done anything illegal, but because they don't want to be part of the ones who have. This is also one way to purge a board of conflicts of interest, etc., and other problems and it's working for us.
EdR

WoodyB (Colorado)
Posts: 9

Posted:

Thanks Ed...keep'em coming folks. Need all the help we can get on this matter.

KathleenF (Illinois)
Posts: 19

Posted:

Hi-- Does this new Colorado law set forth any enforcement mechanisms? For example, does it provide for free or low cost arbitration or mediation? If so, you may be in good shape, since this provision ORDERS the board to set up training and they have not done so. A warning or reprimand from some outside authority figure could do wonders.

Or are you just left with the usual right to sue the board for breach of fiduciary duty? If so, then this is another example of rights which are nearly impossible to enforce if the board wants to blow them off. Why? Because even if you win, the remedy is going to be a court order telling the board to do its duty and probably would include little or no money damages. Who can afford to bring that kind of lawsuit?

See earlier posting on "Rogue Boards and Guerilla Shareholders."

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