Enforcement of SB 05-100 in Colorado

CharlesW, your are correct. This is a violation of CRS 38-33.3-303. The penalty depends on whether anyone chose to enforce and in what manner. The Board members can be advised in writting of this rule. They can be individually held responsible. Their actions can warrant removal from the Board. And if anyone persues legal action each board member will probably have to pay all legal costs for both parties out of their individual pockets. Insurance would not cover acts not done "in good faith".

That's correct CharlesW. It is up to the members of the association. There is not a phone number, they rely on compliance. They did not set up a mechanism, as far as I know, to enforce.

RogerB

I just attended a Town Hall meeting with a CO State Representative this AM, and I asked him that very question. Answer is as RogerB stated, No way to enforce at this time. Your Board is the enforcemnt entity. A new Bill is on the table and it is to help clear up some of the SB100 problems that they created. I also informed him that in my opinion that the SB100 should have gone further and included the voluntary catagories that should be adopted, such as ethics and etc. in with the required catagories.

He stated, "that this started out as a very clean straight forward bill, but there were over a 100 ammendments to it". It probably is the States first attempt at putting some rules on the HOA's as far as governing everyday activitites going for the protection of the members from dictorial Boards, but they did help the Boards in areas of collection and other rule enforcemnt policies.

I feel that this was long over due, and I hope that bad board members get a rude awakening in the near future. One of the things that HOA's members and their Boards can not get through their heads is that a Board is the same entity as your local City government. They have the power to write, make and enforce rules and assessments, according to their legal documents and procedures. A lot of power sits on that Board, and you should not put anyone there that you do not know their ethics level, knowledge, and honesty.

Question for CharlesW
When does your normal annual meeting happen?
If it is within 90 days of the adoption of the budget, perhaps there is no reason to have a special meeting just for the budget. But thanks for spotlighting that. We (my HOA) might have missed it in the hassle of trying to comply with other provisions.
And BTW, have you looked at the changes SB 06-089 will probably make in SB-100?

We recommend using the following procedures for approval of budgets:

1. Our Agreements state we will provide a draft of the annual budgets to the Board at least 60 days prior to the annual meeting.
2. The Board reviews, changes as desired, and approves the annual operating and reserve budgets.
3. The Board approved budgets are sent to the owners with the notice, agenda, and proxy for the annual meeting.
4. The annual meeting is usually scheduled in January (after January 2, when year end financials are available).
5. The owners vote to ratify the budgets during the annual meeting. If the budgets are not ratified then the previous year's budgets remain in effect until such time as the Board approves and presents a budget which is ratified by the owners.

RogerB

Tom, from your experience what are the chances that D&O insurance or indemnification would cover Board members when they act in bad faith by knowingly disobeying the law and ignoring a direct request of homeowners and probably their bylaws?

Thanks for your input,

RogerB

One other question: Don't corporate rules apply at some point if there is not a rule otherwise?
EdR

This web site covers all states.  If you mean for statues, have a look here.  Once you click the link, then search for Horizontal Property Act.