Blog
By Jeff Kerrane, Kerrane Storz, P.C.
An HOA receives an engineer’s report warning that a retaining wall on the property is on the brink of failure. The board, focused on other issues and keeping dues low, decides to put the report on the back burner. After all, the wall looks fine from a distance, right? Fast forward a few months, and a heavy rainstorm triggers a collapse, flooding several units. The HOA now faces costly damage claims, lawsuits, and increased insurance premiums. The expert report, neglected due to budget concerns, becomes a major liability.
The Role of Third-Party Reports and Recommendations
Expert reports and recommendations may come from a variety of sources, including engineers, architects, community association managers, accountants, attorneys, and even committees and board members. These recommendations can address a wide variety of issues, including maintenance, fiscal management, legal issues, or safety concerns.
Expert reports can be valuable tools for HOA boards, offering professional insights and helping them make informed decisions. However, these reports also introduce potential liabilities if not handled with due diligence.
Legal Liability of HOAs and Board Members
The Colorado Common Interest Ownership Act (CCIOA) offers legal protections for HOA board members. Under C.R.S. § 38-33.3-303(2)(b), board members are generally not liable for decisions made in good faith, with due care, and within their authority—unless the actions are willfully negligent. This “Business Judgment Rule” safeguards decisions made by the board, provided those decisions are made on an informed basis, in good faith, with due care, and within the scope of their authority. To invoke the protections of the business judgment rule, board members must inform themselves of all material information reasonably available to them before making a business decision and act with due care. If the board ignores an expert report without a reasonable basis, it could be argued that they did not act with due care, potentially exposing both the HOA and individual board members to liability.
Conflicting Expert Recommendations
Even the most diligent board can face trouble when it receives conflicting advice from its experts. For example, an HOA’s roof maintenance contractor advises the board that unless an expensive repair is performed, a portion of the roof could collapse. The board hires a structural engineer to investigate, and the structural engineer tells the board there is no significant structural problem, and that only an inexpensive repair is necessary.
If the board decides to make only the inexpensive repair, could the board be subject to liability if the roof collapses? In this case, a court would consider whether the board’s decision was reasonable under the circumstances, fully informed, and in good faith. To avoid second-guessing, the HOA may consider seeking clarification or a third opinion from a neutral expert.
Proper Implementation of Expert Recommendations
Another potential area of liability arises when an HOA relies on a third-party recommendation but implements it poorly or incorrectly. Even though the recommendation comes from a qualified expert, the HOA still bears responsibility to ensure that the work is done correctly.
For example, an HOA receiving a recommendation to replace roofing, might hire an unqualified contractor to do the work. If the contractor installs the new roof improperly, leading to further damage, the HOA could face liability due to its failure to ensure proper oversight and execution of the third-party recommendation.
To avoid poor implementation, HOA boards should ensure that contractors are qualified and reputable and should require periodic inspections during the project. If possible, they should hire an experienced project manager or owner’s representative to oversee the work and ensure it meets the expert's recommendations.
The Impact of Colorado's Two-Year Statute of Limitations
Neglecting expert recommendations can also trigger issues with Colorado’s Two-year statute of limitations for construction-related claims.
Under Colorado law, construction defect claims generally must be brought within two years of the date the physical manifestation of the defect is discovered or should have been discovered. If the HOA board delays acting on expert recommendations or does not address potential issues promptly, they may inadvertently jeopardize their ability to seek legal recourse within the allowed timeframe.
For instance, if the board ignores an engineer’s recommended foundation repairs, and the foundation fails years later, the HOA may miss the opportunity to file a claim for damages. This could leave the HOA with no legal remedy, further compounding the financial burden.
Insurance Considerations
HOAs should also consider their insurance coverage. Many HOAs carry liability insurance to protect against claims related to property damage, personal injury, or negligence. It is important for HOA boards to review their insurance policies regularly to ensure that they are adequately covered in case a third-party recommendation is not implemented correctly or if something goes wrong.
In some cases, the HOA’s insurance policy may also include coverage for errors and omissions, which could protect board members in the event that a decision based on a third-party report leads to a lawsuit.
Conclusion
In Colorado, as in other states, homeowners’ associations have a fiduciary duty to protect and manage their communities responsibly. To mitigate risk, HOA boards should thoroughly review and act upon expert advice with due diligence. By taking expert advice seriously, HOA boards can not only avoid immediate financial pitfalls but also safeguard the community's future.
Jeff Kerrane is a shareholder with the construction defect law firm Kerrane Storz, P.C. and can be contacted at 720-898-9680 or jkerrane@kerranestorz.com.
By Tony Smith, SJJ Law
Accessory Dwelling Units (ADUs), affectionately known as granny flats, in-law suites, or backyard cottages, are the talk of Colorado – because, really, who wouldn't want their backyard to double as a thriving metropolis?
As the state wrestles with an affordable housing crisis, ADUs are strutting onto the scene like knights in shining (albeit slightly cramped) armor, promising to expand housing options. However, recent legislative changes aimed at making ADUs more common are causing quite a stir, especially among homeowners associations (HOAs), which generally prefer to keep their neighborhoods as uniform as a closet full of freshly pressed khakis.
What Are ADUs, and Why Are They Important?
ADUs are secondary housing units that cozy up to the original home. They come in various forms, from detached structures to surprisingly stylish converted garages or basement apartments. ADUs serve up a smorgasbord of benefits – they allow homeowners to earn rental income and keep family members close (regardless of whether you may want them there).
Recognizing these perks, Colorado passed new laws to make ADU construction easier. These laws sweep aside certain local zoning restrictions that previously treated ADUs like second class citizens, thereby signaling the state's commitment to tackling housing shortages, one backyard at a time.
Key Provisions of the New ADU Laws
Thanks to the new laws, which go into effect June 30, 2025, municipalities and counties must now roll out the welcome mat for ADUs in most residential zones. While local governments can still insist on aesthetic niceties and parking requirements, outright bans are as outdated as disco. Moreover, the legislation turns the permit approval process from a nail-biting saga into a more reasonable one-act play and chops excessive fees, which were previously about as welcome as a surprise tax audit.
How Do These Changes Affect HOAs?
The new law applies to HOA communities consisting of “Single-Unit Detached Dwellings,” which is defined as “a detached building with a single dwelling on a single lot.” So, it does not apply to condominium buildings or townhome communities with party walls.
Traditionally, many HOAs in Colorado have taken a hard stance against ADUs, citing potential risks like heightened traffic, parking Armageddon, and the terrifying threat of fluctuating property values. Yet now, the new laws render ineffectual provisions in the HOA governing documents and rules that looks ADUs in the eye and say "not in my backyard!" These changes, however, are not universal throughout Colorado and instead apply only in “subject jurisdictions” as defined in HB24-1152.
Most notably, these laws yank some of the power from HOAs to veto ADUs. This change has raised eyebrows and voices among HOA communities, as it could potentially disrupt the uniformity these associations aim to preserve.
For HOAs subject to the new ADU law, this means breaking out their governing documents (perhaps dusting off some cobwebs) and making sure they align with state law. While HOAs can still insist on rules that are reasonable, like ensuring new structures don't resemble UFO landing pads, they can no longer simply deny requests to build ADUs.
Challenges and Opportunities for HOAs
The legislative shake-up brings both headaches and hallelujahs for HOAs. On one hand, balancing homeowners' desires for ADUs with neighborhood harmony might feel like juggling flaming torches while riding a unicycle. On the other, seeing ADUs as partners in solving the housing crisis could polish a community's image.
To ride this wave, HOAs subject to the law should consider drafting policies that are the Goldilocks of guidelines – neither too strict nor too lenient, but just right. This entails setting parameters for ADU placements, insisting that they resemble the existing homes, and managing the nitty-gritty of shared utilities. Open communication with homeowners about these rules is crucial—after all, no one likes feeling like they're playing a game where someone changed the rules and didn't tell them.
HOAs would be wise to consult legal counsel to retouch their documents to avoid potential clashes with newly minted state laws. Boards should be ready for an avalanche of inquiries regarding homeowners' newfound ADU rights and be poised with answers that don’t start with "um."
Colorado’s new ADU laws are shaking up housing policy like a snow globe, promoting flexibility and inclusivity in zoning that scoffs at boundaries. For HOAs subject to the new laws, these shifts serve up a cocktail of challenges with a side of opportunities, both of which must be gulped down to adapt and evolve. Proactively tackling the law's implications enables HOAs to maintain community standards while jumping on the state’s bandwagon toward alleviating housing woes.
As these regulations set root, ongoing tête-à-tête among HOAs, homeowners, and local authorities will be crucial for a smooth transition, like a well-oiled machine or a perfectly executed dance routine. With careful planning and a sprinkle of cooperation, HOAs can effectively integrate ADUs into their communities while keeping their respective essences (whatever those might be) that make them desirable places to live.
Tony Smith is one of the founding partners of SJJ Law and the chair of its Community Association practice group. Tony and SJJ Law are proud to provide a wide range of legal services to HOA clients throughout Colorado.
Whether you are an experienced manager or a brand-new board member, navigating the ever-growing world of HOAs can be challenging. It is a challenge because each year there are new laws and regulations to follow, updated budgets to stay on top of, and codes to be aware of.
However, did you know that there are many resources available to you? Here is a list of websites and online resources (and one in-person suggestion) to take advantage of when you need the information at your fingertips.
More information can be found here - https://dre.colorado.gov/hoa-center
By Shannon Torgerson, Goodwin & Company
How do you chart your course? For me, an annual calendar serves as a roadmap of tasks that need to happen each week, month and year. It helps in tracking deadlines and knowing when something is supposed to happen (hello, pool opening!), while providing the Board with insight into my activities as their manager.
Including specific dates for proposals, landscape items and meetings not only helps the Board and I stay organized and focused on community goals, but also provides a framework for accountability and evaluation. The accountability and evaluation process helps us assess progress, identify successful strategies, and recognize areas that need improvement. It further assists in better communication, enhanced collaboration and problem solving.
The Annual Calendar is the broad picture and helps dictate the day to day. If you know your insurance is going to renew in 60 days, you can put a note on the calendar “start insurance renewal discussions” at 2 months before the renewal. At 1 month before the renewal, you may but a note “confirm receipt of renewal proposal,” for example.
Items to include on the calendar can be:
January
February
March
April
May
June
July
August
September
October
November
December
I provide the Annual Calendar to the Board each month as part of their monthly Board packet and update it as needed.
Shannon Torgerson is the Director of Metro Districts at Goodwin & Company. She has been building community and advising Managers, Boards and Residents for 22 years.
By Rebecca Ruiz, Highlands Ranch Community Association
At the Highlands Ranch Community Association (HRCA), our mission and vision serve as the guiding principles behind everything we do. HRCA was honored to have been named CAI-RMC’s Association of the Year to have HRCA’s General Manager, Mike Bailey, appointed Community Manager Excellence in Service in 2024. With over 30,000 residential homes and 1,500 commercial properties, HRCA stands as a model of community-building, bringing people together with a shared sense of purpose and identity. Our mission is more than just words—it’s a clear reflection of our commitment to enhancing property values while providing an unparalleled quality of life for all residents.
A community mission and vision statement are not merely statements of intention—they are vital roadmaps that define who we are, what we strive for, and how we operate. At HRCA, these statements provide focus, clarity, and a shared sense of responsibility among residents, staff, and volunteers.
Why a Mission Statement Matters
A mission statement offers a concise explanation of why an organization exists and what it aims to achieve. For HRCA, our mission is to create and maintain an exceptional living environment for our residents. This means going beyond basic property management to foster a community where everyone can thrive. Whether we’re maintaining our four state-of-the-art recreation centers, enforcing architectural standards, or offering hundreds of fitness classes, everything we do ties back to this core mission.
It’s essential for residents to know and understand this mission because it establishes common goals and expectations. When we all share the same priorities—enhancing property values and promoting community well-being—we can make collective decisions that benefit everyone. This creates a sense of unity and belonging, which is critical for the long-term success of any community.
The Role of a Vision Statement
While a mission statement addresses the present, a vision statement looks to the future. It answers the question: What do we want to become? HRCA’s vision is to continue to build a thriving, engaged, and vibrant community that enriches the lives of all who live and visit here. This vision shapes the decisions we make about everything from recreational programming to the management of the 8,400-acre Backcountry Wilderness Area. It’s the foundation for our cultural, educational, and environmental initiatives, which not only benefit current residents but also ensures that Highlands Ranch remains a desirable place to live for generations to come.
A Unifying Purpose
Having a clear mission and vision gives every resident a sense of purpose and direction. These guiding principles ensure that the services we offer—whether they be fitness programs, educational opportunities, or cultural events—are aligned with the values that make Highlands Ranch a unique and thriving community. When everyone understands and embraces these guiding principles, we create a stronger, more connected community.
In the end, a mission and vision statement are more than just strategic tools—they are the heart of what makes a community like Highlands Ranch not just a place to live, but a place to call home. Together, we’re building something special, and by staying true to our mission and vision, we will continue to grow, thrive, and enrich the lives of all who live here.
Everything we do at HRCA aligns with our mission to create a community that thrives—socially, physically, and culturally. Whether you’re a long-time resident or new to Highlands Ranch, HRCA is here to ensure that you have access to the very best this community has to offer. Together, we’re building not just homes, but a place where people come together, form connections and create lasting memories.
Rebecca Ruiz, a third-generation Denver native, brings extensive expertise in media relations, corporate and marketing communications, and social media to the Highlands Ranch Community Association (HRCA). She has worked with nationally recognized brands in sports, entertainment, indoor and outdoor recreation, and recreation safety. As the Acting Director of Marketing and Communications for HRCA, Rebecca is a key member of the leadership team. She enjoys the passion of the HRCA community, the camaraderie of her co-workers, and the opportunity to creatively tell the story of the association’s resources and impact.
By Derek Brase, EmpireWorks
Fire safety is a critical aspect of homeownership, especially in regions prone to wildfires like Colorado. By selecting fire-resistant m aterials and implementing specific construction techniques, you can significantly increase your home's resilience to fire. Ongoing maintenance and fire hazard awareness are critical to protecting your community from fire hazards. In this article, we’ll explore key strategies and materials that can help you strengthen your home against fire risks.
Key Fire-Hardened Materials and Techniques:
Exterior:
Roofing:
Fire Walls:
Wiring:
Open Attics:
Additional Fire Safety Tips:
While fire-hardening your home can significantly reduce the risk of fire damage, it's important to combine these measures with other fire safety precautions. It is everyone’s responsibility to protect our communities from fire hazards. While wildfires and building material malfunctions do contribute to house fires, the most common causes are cooking and appliances. By working together to implement these strategies, we can create a safer environment for ourselves and future generations.
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Derek is a proficient and experienced construction professional who has served as Vice President of EmpireWorks since 2015. EmpireWorks Reconstruction is a full-service General Contractor specializing in complex exterior HOA projects.
Karla Strader, Associa
Homeowners choose to move into a homeowners’ association for a multitude of reasons. Whether it be maintenance, amenities, social gatherings, or even cost of living. Whatever the reason may be, everyone wants to feel welcomed when they come home. Having a great community feel helps bring new buyers into the community from word of mouth. When homeowners feel a good sense of building community, they attend board meetings just to listen, are very positive, and happy to learn about things going on in the community.
A few things that have been successful for me in building community over the years are:
Some fun ideas for community events are:
About the Author: Karla Strader has been in Community Management for over 17 years. In her many years of experience Karla has managed condominiums, townhomes, single family homes, master and sub associations over 1,000 homes, mixed-use commercial and residential as well as supervised up to 10 employees at one time. In her current role she is overseeing a team of Community Association Managers for a company she has been with for over 12 years. Karla has obtained her CMCA, AMS and PCAM Certifications. She enjoys assisting associations by offering suggestions on how to improve the community. Karla has also been nominated for several Vision Awards through CAI and serves on the Rocky Mountain Chapter Board of Directors as Secretary. She also enjoys photography, website design and has a passion for training and education especially when it comes to financials and budgets.
By Leslie Ashford, RealManage
When setting goals for the community, it’s helpful to evaluate three aspects: Current Conditions, Budget and Engagement. Turning a crisis or a wishlist into a good goal requires these three important steps. Whether starting with a single goal, or evaluating several goals, follow the steps to create a goal and action plan that is more likely to succeed.
Current Conditions
Evaluate the current conditions around the goal for the community. The repair, replacement or improvement of physical assets may be among the goals a community is considering. An audit of the current condition will set the foundation for a good goal. Understanding the history and useful life of a physical asset can shape the timeline for achieving the goal. Whether the goal is to maintain, repair, or replace a physical asset, the goal is only achievable once the current conditions are established. A Reserve Study completed by a professional reserves analyst can help establish the current condition of existing assets.
Goal setting may also be related to the environment within the community, including the grounds, amenities and shared spaces. An evaluation of the current conditions might include an audit of what shared spaces exist and whether they are still appropriate for the community. An audit of current conditions might also include owner feedback, economic factors, and how a community functions. Goals related to how members of the community interact and whether changes or improvements can be achieved rely on a good evaluation of the current conditions. An informal survey of community members may help establish the current conditions. Other data to establish the current conditions may be amenity usage data, housing prices or current technology.
Once the current conditions are established, to further develop a good goal, it needs a budget.
Budget
Evaluate the existing financial position of the community, the budget for the coming year, and the long-range possibilities for funding a goal. A good goal requires a funding plan created to match the milestones for the goal. Research the costs associated with a goal and implement a budget tied to the goal. Once the funding surrounding a goal is known, it can be inserted into the larger community budget. When there are significant budget constraints, you should look at many funding possibilities including one time special assessments, fundraisers, loans or financing plans. Just be sure the priority and severity of the goal is matched to the type of funding, interest payments or risk.
Remember, not all goals are costly endeavors. A goal related to the environment in the community may be to repurpose existing amenity spaces, start a new community event or create an online chat group. Even when the investment may be small, it is still important to have a funding plan in place.
Engagement
An achievable goal is one that the community agrees is good or important. Engagement in the process of goal setting by members of the community can predetermine whether a goal can be achieved. Board members, owners, vendor partners and Community Association Managers are all important contributors to achieving community goals. Involve community members in the selection of goals for the community. Share ideas for funding the goal. Most importantly, campaign within the community for the goal.
Recruit others to join in the achievement of the goal. Contributions as simple as spreading the word will help a community achieve its goal. Similarly, community members with expertise can shape the path to a goal. Often more human resources can decrease the budget and increase the chances of success. Engage as many advocates as possible to be goal cheerleaders.
When the current conditions are defined, a funding plan is in place, and engagement is high, a good goal has every chance of being reached.
Tips:
-Don’t let past experiences or patterns of behavior stop goal setting before it starts. Most communities have a past project that didn’t get funded or a past goal that never came to fruition. Some communities report less participation. If goal setting seems like a losing proposition, don’t give up. Set a goal that honestly evaluates the current conditions. Create a budget and funding plan. Engage community members in varied ways, including spreading the word. Get that goal accomplished!
-If goal setting still seems overwhelming, separate a goal into short-term (next 12-24 months) and long-term (3-10 years) sections. Breaking a larger goal into a series of smaller goals can increase the chances of success. Success can build momentum.
Whether a community begins with short-term or long-term goals, start with current conditions, create a budget, engage resources, and achieve.
About the Author: Leslie Ashford has been a member of CAI-RMC for eight years and holds her CMCA and AMS Designations. She lives and works in Northern Colorado, managing Common Interest Communities across the Front Range, Boulder West, and I-25 corridor. Her love of Colorado is steeped in the diversity of clients and communities across her region. RealManage provides professional Community Association Management across the State and across the Nation.
By Matt Egan, RowCal
Big changes are underway at Arvada Gardens, a community in Colorado that is undergoing a major transformation! This multimillion-dollar renovation project has been in the works since RowCal took on the management of the property in the spring of 2022. With a focus on addressing significant structural issues and enhancing the overall appeal of the community, we’re excited to share the details of this ambitious project.
Addressing Challenges Head-On
When we first began working with the Arvada Gardens Board of Directors, the community faced substantial challenges, particularly concerning water infiltration and rot damage that had compromised entry staircases and decks. Residents were understandably concerned, and the situation required immediate attention.
In October 2022, a special assessment meeting was held where homeowners had the opportunity to vote for a major exterior overhaul, setting the stage for the significant changes to come. The comprehensive renovation plan, estimated at $4.5 million, includes crucial updates such as new front and rear decks, modern entry staircases made from durable steel with concrete steps, and refreshed siding. The scope of work not only focuses on aesthetics but also prioritizes the safety and longevity of the community’s structures.
A Collaborative Approach
Collaboration has been at the heart of the project. RowCal worked closely with the Arvada Gardens Board, the contractor ASR, and local city officials to create a detailed plan for the renovation.
One of the key factors in this partnership has been effective communication. We understood that keeping residents informed and involved was vital to the success of the project. Regular updates and open channels for feedback have helped maintain transparency and foster a sense of community ownership throughout the process.
The groundbreaking ceremony, held in the fall of 2023, marked a significant milestone in this journey. Since then, the project has made remarkable progress, with new entry stairs and decking taking shape. With construction teams diligently working on-site, residents have been able to see the transformation unfold before their eyes.
Embracing Modern Design
The design choices made for this renovation reflect a commitment to modern aesthetics and functionality. The new decks will feature contemporary materials, including composite decking that promises durability and low maintenance. Additionally, the installation of powder-coated aluminum railings and steel stringers not only enhances safety but also adds a sleek, modern touch to the community’s look.
As we near the completion of the project, we are excited to report that there have been minimal challenges along the way, aside from typical construction hurdles. Our team has remained focused and dedicated, ensuring that the work progresses efficiently. As we put the finishing touches on the final buildings, we look forward to seeing the enhanced property values and revitalized spirit of the Arvada Gardens community.
Looking Ahead
With an estimated completion date by the end of 2024, residents can anticipate enjoying their newly renovated spaces in no time.
This project is not just about physical improvements though. It’s about creating a safer, more inviting community that residents can take pride in. The enhancements made at Arvada Gardens represent a significant step toward a brighter future, where homeowners can feel confident in the safety and beauty of their homes.
About the Author: Matt Egan has been in the HOA industry for over 15 years in the Colorado market. For ten of those years, Matt owned and operated his own management company primarily serving low-rise and mid-rise condominium communities. Matt has been part of the RowCal team for over 3 years. When he isn’t helping RowCal clients, he is usually doing something hockey related, either driving his daughter or watching her play, or standing between the pipes in a late night beer league game. Learn more about RowCal at www.rowcal.com or https://www.linkedin.com/company/rowcal/.
By Bryan Farley, Association Reserves
In the community association world, there are many acronyms to remember: HOA, PUD, CAI, RS, etc…
One acronym you should be aware of when planning for 2025 is CLAC. CLAC is the Colorado Legislative Action Committee. This committee includes a diverse group of industry professionals who volunteer their time to monitor legislation, educate lawmakers, and protect the interests of those living and working in community associations.
CLAC comprises homeowner leaders, community managers, and representatives from community association business partners who volunteer their time to work with legislators and lobbyists to protect the interests of community members.
How can you stay involved with upcoming legislation that may impact you?
There are a few ways to stay on top of any upcoming legislative bills that may impact your community:
