Small 9-unit Colorado condo HOA- no bylaws, informal governance, no regular elections. Looking for experience and perspective.

Started by EricaA • 3 replies • 25 views

💬 Join us to post & get advice from 50,000 HOA & Condo leaders.

⚡ Takes 30 seconds

Already a member? Log in

EricaA (Colorado)
Posts: 6

Posted:

Hi all- I posted here about a year ago about a refinance fee dispute that was really helpful. I'm back with a broader governance question.

My partner and I have owned a unit in a 9-unit condo HOA in Denver for about two years. The community is governed under Colorado's Common Interest Ownership Act (CCIOA), which is the state's primary HOA statute. For context, CCIOA requires that restrictions on use and governance be contained in recorded governing documents, and that amendments require at minimum a 67% owner vote.

Here's our situation:

No bylaws: The association has a recorded Declaration but no bylaws. Board positions- president, treasurer, secretary- exist and are occupied, but there are no regular elections and no defined term structure. There was an election when a former president stepped down, but beyond that positions appear to be held indefinitely by the same small group of long-term owners, most of whom have been here 10-20 years.

Informal governance: Decisions about vendors, expenditures, and maintenance happen through informal conversations between the de facto board members, without owner notification, competitive bids, or any transparent process. A recent example: we learned through a neighbor that a tree contractor is being brought in, but we were never notified despite having raised our own tree maintenance needs previously.

The refinance fee situation (which I posted about here previously) was what crystallized things for us. The board attempted to impose a fee we believed had no grounding in our Declaration or in CCIOA. We pushed back with documented legal reasoning and ultimately prevailed, but the process revealed how much the board was operating on informal precedent and assumption rather than actual authority.

Reserve funds are also a concern- we're a small community with aging infrastructure and what we believe are inadequate reserves, but without proper governance there's no transparent accounting or long-term planning process.

We're not looking to blow things up or litigate. We're newer owners trying to understand how to advocate constructively for proper governance in a community where the informal structure is deeply entrenched.

Specific questions:

- For those who've navigated adding bylaws to an association that never had them — how did you approach it without triggering defensiveness?

- How do you build the case with other owners that proper governance protects everyone, including the long-timers?

- Are there particular resources or approaches that worked for getting a small, informal HOA to adopt more transparent processes?

Thanks in advance- this community has been genuinely helpful before.

SheliaH (Indiana)
Posts: 6,974

Posted:

For those of you new to HOA life: THIS is why its so important to look at the financials, governing documents and talking to a few people already living in the community BEFORE you buy! Many people, including me, don't always realize what we're getting into, the realtor usually doesn't know or care (the commission's more important) and n d th seller wan5s to n getting the hell l out as quickly as possible. They're not necessarily trying to rip you off, sometimes they really didn't know either and are getting out before anyone sees that pile of briwn stuff on n the fan isnt chocolate ice cream

I get your concerns about defensiveness, but this is your HOME and as an association member, you have every right to know the details on how its run because you help pay assessments that help pay for services such as tree maintenance. If something goes wrong and these longtime homeowners are no longer there, how will you or anyone else know how you got to that point and what will be necessary to fix it?

So don't worry about the defensiveness- either they know and are able to explain themselves truthfully with verifiable evidence (budgets, vendor contracts, and board meeting minutes to start with) or they can't. If they refuse to, that's a problem that results in lawsuits and higher costs for everyone.

If the declaration is all you have, start with that. Pull it out and read it (you and your partner) and make notes on what's in it and what isn't addressed. Yes, it'll be boring, but such n is life. Nthats akso how oeopke get ripped off because they didnt pay attention to details.

The declaration won't have everything- that's why bylaws and CCRs were invented. The bylaws dictate how the community is run (e.g. length of board member terms) and the CCRs dictate how the common areas are used. For example, if you have a parking lot, there could be rules on how resident spots are assigned and what might prompt something to be towed.

Once you have an idea of what the declaration says, consider the questions you have about how the association should I kd be run and note what isn't happening. Prioritize those questions based on what bugs you the most and that's where you'll begin to quiz the board. You can ask your questions without screaming, but dont back down. State you haven't lived here long and would like more information on whats going on, issues the board's currently working on and how everyone can help, such as looking for companies who could do a reserve study at a decent price.

If they dont know what a reserve study is, do the research for them - Google is fairly decent on n that. You can also look at old conversations on this website about reserves and bring you questions to this conversation for updated information. Better yet, start a new conversation on reserves to keep everything straight.

Wondering what to say as to why reserves are important? Just look at Florida and old conversations on Surfside (anyone remember that?) You may not live there, but trust and belive, there are hundreds of HOASs around the country eith the same problems. Hopefully they won't lead to anyone dying, but they can and will lead to lots of money being spent to fix something that should have been addressed years ago.

This is just one example - rinse and repeat as necessary. If someone pipes up about another issue, that's fine. Let THEM do that research and report back to the homeowners. If everyone does some research, you can all decide what should be done first and go from there. I suggest starting with establishing policies and procedures on things like vendor selection: how to protect against conflicts of interest, when to get three requests for proposals, how to do due diligence like checking if the vendor has the proper license, etc. When everyone operates by the same set of rules, it can make things easier. You can always review tge protocols to add, subtract and amend as usual.

Finally, I always recommend looking at the education materials on the community association institute (CAI) website and buying a few (they arent that expensive). You'll see everything from rules enforcement to establishing financial controls and back to amending documents (or, in your case, establishing a few). Get to work and good luck.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

TimB4 (Tennessee)
Posts: 21,079

Posted:

Keep in mind that you get more flies with honey. An approach of, I would like to help will be more fruitful than an approach of where is the money going.

ElleN (Idaho)
Posts: 1,356

Posted:

For context, CCIOA requires that restrictions on use and governance be contained in recorded governing documents, and that amendments require at minimum a 67% owner vote.

For the declaration (for one), the number I see in the CCIOA is quite different. Do you want help looking this up? Or can you take another look at the CCIOA and see what you missed (or maybe I am missing something)?

Have you contacted the County Clerk to see if there are bylaws recorded with the county? Just because you have not seen them does not mean they do not exist. If your HOA is a corporation, it would be unusual for bylaws to be non-existent.

The CCIOA requires that the bylaws provide for the following:

(a) The number of members of the executive board and the titles of the officers of the

association;

(b) Election by the executive board of a president, a treasurer, a secretary, and any other

officers of the association the bylaws specify;

(c) The qualifications, powers and duties, and terms of office of, and manner of electing

and removing, executive board members and officers and the manner of filling vacancies;

(d) Which, if any, of its powers the executive board or officers may delegate to other

persons or to a managing agent;

(e) Which of its officers may prepare, execute, certify, and record amendments to the

declaration on behalf of the association; and

(f) A method for amending the bylaws.

(2) Subject to the provisions of the declaration, the bylaws may provide for any other

matters the association deems necessary and appropriate.

(3) (a) If an association with thirty or more units delegates powers of the executive board

or officers relating to collection, deposit, transfer, or disbursement of association funds to other

persons or to a managing agent, the bylaws of the association shall require the following:

(I) That the other persons or managing agent maintain fidelity insurance coverage or a

bond in an amount not less than fifty thousand dollars or such higher amount as the executive

board may require;

(II) That the other persons or managing agent maintain all funds and accounts of the

association separate from the funds and accounts of other associations managed by the other

persons or managing agent and maintain all reserve accounts of each association so managed

separate from operational accounts of the association;

(III) That an annual accounting for association funds and a financial statement be

prepared and presented to the association by the managing agent, a public accountant, or a

certified public accountant.

See CCIOA 38-33.3-306. I interpret this section to mean that the CCIOA requires bylaws and that the bylaws have all of the above. The fact that the CCIOA requires the bylaws to say the above is a powerful argument to adopt bylaws IMO.

🎯 You've read this entire discussion

Join the conversation with 50,000 HOA & Condo Leaders:

✓ Ask follow-up questions
✓ Share your experience
✓ Get expert advice
✓ Access 350,000 discussions

Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in here