Colorado laws regarding HOA contract

For HOAs and condominiums, the main Colorado statute appears to be the Colorado Common Interest Ownership Act (CCIOA). The part of this statute pertaining to records viewing appears at https://law.justia.com/codes/colorado/2016/title-38/real-property/article-33.3/part-3/section-38-33.3-317 . It appears that as long as the management contract is not currently under negotiation, you have a right to view the contract under Colorado state law.

Here is a master list of the state laws for HOA's and condos in Colorado: https://www.colorado.gov/pacific/dora/node/92911

A few of the regulars here are Colorado HOA members. They may chime in with more suggestions. Check back.

Welcome to the Forum, Tuta.

Nice that Augustin gave you so much useful info!

Your own HOA documents like your CC&Rs or Bylaws also might give you the right to review executed contracts. Some states seem to require that you provide a reason for wanting them. If so, I'd just say "I wan t to review this to see what part of my dues is paying for."

Make sure your request is in writing and is addressed to the right person(s).

Augustin, thank you very much for this information. I might have more questions after checking out the information you provided to me. Thank you again.

Quick update. I received via email a copy of the contract between our HOA and MC. I read it, and I do have some questions. One of the paragraph is confusingly worded.
Here we go:

"Indemnification
The Association agrees to indemnify, defend and hold the Management Agent harmless from all claims, demands, suits, damages, costs and expenses 9 including reasonable attorneys fees) relating directly or indirectly to the property and from liability for damage to property and injuries to or death of any employee or other persons whosoever, other than caused by the willful negligent conduct of Management or its agents. The association also agrees to carry at its own expense public liability insurance naming the Management Agent as an additional insured, and to furnish the management Agent certificates evidencing the existence of such insurance."

Can somebody please explain this to me in plain English?

Does this paragraph from the contract gives the owner of MC the right to act like a dictator and not be held accountable for anything?

If that is the case, does the contract need to be amended or changed?

The situation we are dealing with in our subdivision is this: Some of the common areas are not well kept (mowing, trees growing over fences etc)there is no quality control evidenced. The MC appears to be poorly staffed, there is no transparency. The owner of the MC is insulting and officious. The HOA board members are not getting involved with anything. They just go along, and enjoy their retirement. We are trying to figure out what to do.

Thank you very much for your help. I really appreciate it.

We have a very similar indemnification clause with our Mgt. Co. (MC)

But Douglas is right: It's entirely up to the Board to make sure the MC lives up to the terms of the contract. The contract should state what the MC's responsibilities are. Orus for example stats that the General mgr. (GM) who works for the MC supervises all vendors on the premises, e.g., landscapers. So...get a copy of the HOA contract with th landscapers.

If that vendor is not adhering to the contract the Gen. Mgr. should enforce the contract. If the GM just lets the landscaper do whatever they want and not adhere to the contract, it's the Board that should lean on the GM to fulfill their contract--supervising vendors.

Is your manager certified? How many hours do they spend on your premises? What size is your HOA?

Douglas thank you, I am starting to learn so much! What a good thing to discover this HOATalk website. I'll keep bringing on my questions. Thank you in advance!

This does bring up a good point, if the management company is certified, can that certification be taken away if they have been negligent in their contractual duties?

Or is "certified" just a advertisement gimmick?

I need to clarify, the reviews refer to the MC.

Sheila, I went back and read the contract again. You are right - the board is at fault to begin with. I cannot believe that the President of the board signed the contract. It is so obvious that the contract was written by the MC's attorney, and it has many flaws. The contract does not even have a detailed list of the day-to -day duties that need to be performed by MC. No wonder we are dealing with difficult to address consequences.

I am not giving up, I am doing a little bit more research here on this AWSOME forum, and then prepare a letter for the board.

Thank you again for all this advice. Keep it coming..... I love learning new things!

Hi Kerry, thank you for your input. Very useful!
That's my concern. How do you prove: "The willful conduct of Management or its agents" if you have to go to court for this? You we'll need to pay a fortune to pay all the fees.

Here is what the contract say about the property inspections:

"Regular Property Inspections - A detailed inspection checklist shall be developed by the board to meet the Association's requirements. MC will officially inspect the property regularly for purposes of reviewing common element upkeep requirements. Other informal inspections will occur more frequently depending on outstanding concerns."

The contract does not say anything about "how many hours" they should be on our premises. Is this a flaw?
Is it possible to contact CAI and ask if this MC and their owner who is also the General manager are certified?

Thank you again for all your help!

Hi Kerry, I have additional questions. Thank you for your time.

What does CAM mean?
Only the Property managers ( I assume the manager that comes out on our premises ) need to be certified, or the MC itself as well?

Thank you again for your help.

-- I agree with the others that the indemnification is usual.

-- I agree with the others that it's the board and only the board the OP should address about problems with the management company.

-- I think management certification is an advertising gimmick.

At $700/ann., Tuta, I would expect very, very little.

There might not be any requirement the Manager is certified in CO, but some states, FL, I think, require it. IN CA managers have to tell HOA board if they're certified.

Douglas, thank you for this info. I did ask the Board this question: "Did the Board members provide MC with a detailed list of duties to meet the Association’s requirements? If yes, please provide a copy of that list to us".

I am still waiting for their answer.

Kerry, thank you for this info.

How can I find out if Co. is one of those states that requires to be certified for this type of business? Thank you.

Augustine, Thank you very much!

I am posting this information here for others to see. It is very useful. Again, thank you very much for your help!

"If one does not renew their CAM license or CAM entity license by the upcoming license renewal deadline of July 1, 2018, one cannot operate as a CAM or CAM entity in the State of Colorado. Also, anyone practicing community association management without the required license can be subject to a Cease & Desist Order, and additional penalties as may be determined by the State. Until July 1, 2019, the Division of Real Estate has jurisdiction and authority to regulate and discipline CAM licensees."​

Kerry,$700 a year, and the landscape expense for 2017 is almost $50,000.

I believe you should be looking at the contract the Board signed with the Landscape company. MC's usually don't sign the contracts for the community.

At $700.00 a year, just what else do they do for you? Violation reviews, ARC requests, dues collections, vendor payments? I'm assuming you're a single family residence HOA. How much common area is the landscape company maintaining?
t
For that money you can't expect much. Day to day duties? That amount represents about 12 hours of work a year. Or an hour per month.

According to the contract the MC handles all the contracts with the vendors, and the contracts are not available to the HOA members. Yes, we are a single family residence HOA.
I asked the MC and the Board for a detailed list of all the duties. I am still waiting for a reply. I will have to double check about the common area.

Tuta, your language might be confusing. You wrote: "According to the contract the MC handles all the contracts with the vendors, and the contracts are not available to the HOA members."

This makes it sound like the MC signs contracts for your vendors, but I really doubt that. First, Boards approve contracts, not MCs. And At $700/ann., It seems impossible the MC would "manage" all contracts. But what does that mean??

Please give the exact wording of that language MC "handles contracts" in your contract with the MC.

Here we go:

1 Service Contracting - Shall solicit, analyze and compare bids, and negotiate contracts for any requisite grounds maintenance, landscaping, lighting, security services, audit and legal services and all other services required by the Association. The Agent will be the only authorized point of contact with each of the association vendors.

Contractual and Physical Administration - Agent will supervise the maintenance of the common areas, improvements, and equipment of the Association.

Pat, thank you for this useful information. How can you ask the Board to dissolve to vote a new one? Of course, we can present the issues that are not been properly addressed. The main problem we are dealing with is that some Board members are elderly ( over 80 years old), and they have been in this Board for a long, long time. They are very attached to it, and they are basically good friends with the owner of MC. How can we solve this problem without creating a war?

The other issue we discovered yesterday was that the license of the CAM for this subdivision has expired. We asked questions about this issue, but so far no reply from neither the Board nor the MC. We do not know if the MC or the owner of it are up to date with maintaining their certificates or if they have any. So far, they did not show us anything even though we asked to see their certification. Yesterday I found out that in the state of CO. it is required to have a valid, active CAM certificate in order to do business.

TutaN,

Read your By-Laws. The Board is elected at the Annual Meeting if there is a quorum present. Otherwise they can be appointed and can be unseated by calling a Special Meeting which should also be covered in your By-Laws. It's not an easy task and you'll need enough support from other owners to reach quorum. You'll also need people ready to be voted in.

I am not familiar with Colorado, but to not have proper credentials to operate, the MC may have defaulted on his contract. Not much you can do if the Board won't act. Is there a state agency you can report the lapse to? This is very important if the MC has access to your community funds. The license lapse may void his insurance coverage.

The MC may be friends with the current Board, but for $700 a years he's not raking in big money from you. I'd be looking to see if the MC is getting any monies from the landscape company.

$54,000 a year seems very high for single family in arid CO. We have over 10 acres in NC with lots of grass and our annual is under $30,000. We are a condo community so owner's do not maintain any grounds. Know anyone in the landscape business who can provide you with a general quote to compare?

Unless the member's come forward and cause a ruckus, I'm afraid there's very little that can be done except hire an attorney to bring suit against the HOA which is not recommended because it's like suing yourself.

Pat, thank you for all this information. On Monday I will contact DORA ( https://www.colorado.gov/dora )Colorado Dep. of Regulatory Agencies, and also the Insurance Company.

Your comment about "monies from the landscape company" makes perfect sense.

I need to figure out how to get some quotes from different landscaping companies.

I am not planning an going to court. That's why I am here to learn how to solve the problems without going to court. Thank you again for your time.

Agree with that, $700. a year seems way too low, for that amount you should be lucky if they put stamps on notices let alone replying to emails and complaints.

I would think $700/month.

Also, George is correct, it seems like TutorN is going from one topic to the next without any sense of what is the goal here. Suggest doing a lot more research and then consolidating everything into one letter. Then also make sure you tell them what solutions you have come up with and what solutions are good for the community.