By Damien M. Bielli, VF Law
For the past several years, the homeowner association (HOA) space has seen and continues to see many changes in regulation, including legislation around renewable energy options. Various states have taken a more proactive stance on the installation of solar panels, explicitly targeting HOAs that enforce restrictions on these devices. According to HOA-USA, there are 370,000 HOA-run communities in the U.S., with 53% of all homeowners living in an HOA community. An HOA's ability to regulate solar panel installation requests on an owner's property will be significantly impacted as legislation continues to develop throughout the country. However, HOA communities will still have the ability to restrict or prohibit solar panels in an association's common area. To ensure fair governance, it is crucial that HOAs stay up to date with changing regulations, understand the caveats that come with new laws, and adjust their governing documents accordingly.
Colorado alone has an estimated 10,410 HOA-run communities, with roughly 2.35 million people living in them, equaling approximately 40% of the state's population. Colorado House Bill (HB) 21-1229, which passed in 2021, increased protections for property owners within HOA-guided communities. Specifically, the bill keeps HOAs from prohibiting the installation of various home additions, including renewable energy-generating devices such as solar panels. However, HOAs can still enforce "reasonable" restrictions on installing solar panels. A "reasonable" restriction pertains to aesthetics and safety concerns that do not significantly increase the cost of the device or significantly decrease its efficiency. HB 1229 clarifies "significantly" to mean no more than 10%. Any rule imposed by an HOA that increases the cost of a solar device by more than 10% or decreases its efficiency by more than 10% is not reasonable.
This still allows HOA-run communities to enforce restrictions and standards on solar panel installations, but careful regulation is required. With that in mind, here are some key points to ensure your community regulates solar panels fairly and correctly.
Review Governing Documents
Boards must review their governing documents concerning restrictions or requirements for solar panel installation. If your documents outright prohibit the installation on an owner's property, it is time to amend them to adhere to current law—outright prohibition cannot be enforced. Additionally, any restrictions already included in governing documents must be scrutinized to ensure they are "reasonable." As each situation can vary, bringing in a seasoned HOA law attorney can make this process easier and legally sound, ensuring compliance with the law.
Keep the 10% rule in mind when adopting restrictions for solar panel installations. Ensure any rules implemented do not explicitly prohibit solar panels from being installed on roofs and require them on the ground. This could effectively prevent owners from installing solar panels outright, making it unlawful and unenforceable. Instead, create rules that specify preferred locations for solar panels; require the solar panels to be painted or otherwise screened from view; limit the total amount of roof space utilized; or establish a preferred distance for solar panels above roof tiles. These rules must ensure they do not reach the 10% threshold. By accomplishing this, HOAs can still establish a uniform policy that all homeowners can follow for solar installations, thus maintaining the desired aesthetics of their communities.
Timely Review of Applications
Another facet of HB 1229 is the requirement that all fully submitted solar installation applications in an HOA be approved or denied within 60 days of submission. While the timeline for approval cannot be extended, it can be truncated if the associations governing documents provide a shorter time for review and approval of architectural submissions. If an HOA fails to take action on a solar application, it is automatically deemed approved after the expiration of the 60 days by state law. HOAs should establish a cohesive, streamlined review process to avoid delays, confusion, or enforceable denials.
Lastly, once an HOA board decides they want to enforce restrictions on solar panel installations, it is crucial to establish guidelines and formal agreements for homeowners to follow. Suppose a homeowner wishes to install solar panels on a Townhome roof that is maintained by the Association. In that case, a maintenance and repair agreement can stipulate reasonable restrictions that the homeowner agrees to, address situations such as the removal of solar panels should a homeowner choose to do so, and the homeowner's responsibility to maintain and ensure their solar panels and the portion of the roof affected by their installation. Additionally, specific enforcement mechanisms, unique to each installation, may be addressed in the agreement should a homeowner breach the contract.
As the U.S. continues to shift away from traditional fossil fuel-driven energy sources, HOAs must keep a compliant mindset concerning renewable energy options that homeowners want to install on their properties. Establishing reasonable, unified, and cohesive guidelines for these kinds of installations will better protect HOAs and homeowners from litigation arising due to disputes or outdated governing documents. The legal landscape continues to evolve around renewable energy, so it is important to stay informed about requirements and have trusted legal counsel to advise and protect from litigation.
As a partner in Vial Fotheringham LLP, Damien M. Bielli has a unique background in HOA Law, trial advocacy, insurance defense, professional liability, coverage disputes, labor law, employment law, construction, commercial litigation, and contracts. He may be reached at Damien.Bielli@vf-law.com.
By Ashley Douglas, Reconstruction Experts, Inc.
As our communities age, one of the major capital expenditures that needs to be planned for is the exterior façade of your building envelope assembly. The simple definition of building envelopes is the assemblies that separate the interior from the exterior of the home. These assemblies include things like doors & windows, roofs, floors, foundation, insulation, and the exterior façade. In this article, we will be primarily discussing exterior façade which includes stucco, metal, stone, and siding products.
If the exterior facade of your home isn’t properly maintained, you will begin to see signs of serious damage that will result in costly repairs. Some of these signs include:
Ideally, you’ve already looked in your CAI Membership Directory and hired a reserve study company to plan and budget for your community’s long-term maintenance. If you’re behind in the financial aspect of that plan, you can also consult with one of the qualified banking partners in our industry to inquire about a loan to fund an upcoming project.
Once your plan for funding is established and you begin to look at ways to make efficient use of your community’s money, we want to highlight a product that we believe is a good investment to make into your exterior façade.
LP is a manufacturer of various building envelope products and their Smart Siding line is something we recommend to communities often when they’re considering an upgrade. The LP Smart Siding products are manufactured using their proprietary Smartguard process which produces one of the most durable lines on the market. This durability allows them to provide an upgraded warranty, along with the cost benefit of a longer-lasting product that won’t need to be replaced as often.
Along with functionality, LP Smart Siding comes in 16 different pre-finished colors so you don’t need to paint with installation. There are also various styles available that mimic a cedar look giving a great aesthetic.
Lastly, and the main reason we recommend this to our clients, LP Smart Siding is easier to install providing efficiency in cost to you as the customer. The siding comes in longer pieces resulting in less time cutting and integrating seams. Furthermore, with less seams comes less waste factor leading to less overall materials costs for the installation of the product. When installing any product, there is a certain factor given to “waste” during install. This waste is a result of breakage during installation, and with a more durable product requiring less seams, the cost savings are tangible for you as the homeowner.
There are many different products to be considered so we recommend doing your research and talking to a trusted contractor to see which is best for your specific needs, but if you’re looking to make upgrades to a building or even a single elevation or side of one building at a time, we love this product for our clients.
Colorado Regional Vice President
Reconstruction Experts, Inc.
By Karen McClain, CMCA, AMS, PCAM, Associa Colorado
Receiving credentials is especially important if you have chosen community management as your career. Designation sets you apart from others for several reasons: (1) It shows your dedication to the industry; (2) It demonstrates to others that you’re willing to go the extra mile to better yourself professionally; (3) It lets others know that they can come to you for your expertise when needed; and (4) It allows you to become the professional you want to be and opens many new opportunities for you.
This credentialing process can be difficult to manage while working full-time and keeping up with personal obligations. Obtaining the PCAM designation has always been a goal of mine, one that I set my sights on within my first six months of being in the industry. Although it was 10 years before I made the decision to go for it, I knew that to get where I wanted to go career-wise, I would need this designation.
Setting the goal was one thing but completing that goal was going to be a challenge. The PCAM Case Study - how can two words give such anxiety? As 2020 began, I decided December would be my best option. As the year progressed, more and more things began to be postponed or outright canceled. I watched as CAI National canceled each case study location. I became concerned that I would not be able to meet my self-imposed goal.
CAI announced this new format of a “Virtual PCAM Case Study”. Participants were required to watch a prerequisite community video and login to two days of Zoom seminars. At first, I was very hesitant to enroll, but I felt there was no other option if I wanted to remain on track. There were so many questions I had. How will we do an adequate site visit? What if I miss something? Will I be able to interact and participate? What if my internet crashed? Then the unthinkable happened - my laptop crashed the week of the case study and I scrambled to purchase a new computer.
On day one, everyone was eager and ready to go. Manager after manager logged into the meeting, chatting about where they were from and how long they’ve been in the industry. It was great to see so many of us united on this unique journey. We were officially participating in the first virtual PCAM case study. Not only will it be an amazing accomplishment to attain this designation, but to do it virtually! The first stop was an introduction from the instructors, and then we were welcomed by the manager. They gave us an overview of what to expect, and we moved on with meeting the attorney, the insurance agent, the CPA, and many other professionals related to the community.
One thing that I did notice was that many of the participants were at home, but some appeared to be in their office. How amazing - you can just shut your door and take three hours out of your day to participate in the most important event of your career. As the sessions wrapped up over two days, they opened it up to discussion from the participants. One of the major questions from all the candidates was whether we were missing out on the in-person opportunity to view the property. All the instructors and the staff at CAI National reassured the participants that we are not missing out on any instruction time. One of the major bonuses to attending virtually was that all of the recordings were available for us for the 30-day duration until the paper was due.
As I reflect on the changes to technology over the recent years and changes that CAI National made in its approach on continuing education, I wouldn’t have done it any other way. Part of the reason I waited was the adjustments I would’ve had to make to my schedule in order to fly to a location outside of my city; the time needed would have been unattainable. Attending virtually was both logistically and financially a more productive use of time. As we look to the future, and we find new ways to learn, I would recommend that you strongly consider the virtual options.
By Matt DeWolf, FRONTSTEPS
In the community management industry, we're entering an era where homeowners and board members, the core stakeholders of every community, are becoming the new focal point. While the industry has long prioritized back-office efficiency, a new emphasis on putting technology directly into the hands of homeowners and board members is emerging. By enabling the homeowner and board member, management companies benefit from fewer questions and tickets generated. This streamlines operations and costs for the management company while improving homeowner satisfaction through instant responses and complete transparency.
There's a simultaneous recognition of the rising significance of community managers who play a vital role in enhancing community happiness and productivity, thereby fueling industry engagement and prosperity. In this article, we'll explore these transformative trends, bridging the gap between technology and the end-users who define the essence of community living, and spotlighting the community manager as the linchpin of this exciting evolution in association management software. Welcome to a future where innovation empowers stronger, more vibrant communities.
1. Mobile Accessibility and User-Friendly Interfaces
Homeowner engagement is paramount, and to achieve it, we must meet homeowners where they want to be – on their mobile devices. They crave intuitive, easy-to-use mobile experiences that seamlessly integrate with their daily lives. Simultaneously, community managers are seeking tools that provide speed, convenience, and safety, enabling them to excel in their roles and tackle more significant responsibilities.
However, it's not merely about making the experience mobile; it's about proactively engaging homeowners when action is required. Homeowners will not go searching for information; they need immediate alerts on their mobile devices, informing them of new events, invoices, or tasks that require their attention.Push notifications are a crucial component of a mobile app that meets market expectations.
In this era, community engagement and transparency are the lifeblood of our industry. Their absence can lead to ongoing grievances about HOA overreach. However, we have the power to evolve and return to the original vision upon which the HOA industry was built – thriving communities marked by happiness, health, and prosperity.
2. Enhanced Data Security and Privacy
As community management continues its digital transformation, the need for uncompromising data security and privacy takes center stage. In an environment where cyber threats continually grow in sophistication, community manager software must advance to safeguard sensitive information effectively. In the future, we can expect to see advanced encryption techniques, robust authentication protocols, and multi-factor authentication becoming standard features in software.
An example of improved security requirements can be seen with recent transitions away from NACHA files. These files, the long-time industry standard in community management, also represent a potential vulnerability in the realm of cybersecurity. Transitioning to modern and secure payment solutions instead helps prevent these security risks from occurring.
By taking proactive steps, as in this case with NACHA files, our industry can ensure the trust and confidence of homeowners and clients alike. In doing so, we are on the path to achieving the vision of a community management landscape where data security is synonymous with peace of mind.
3. Cloud-Based Solutions for Scalability
Scalability is a vital consideration for community managers as they grow their portfolios. Cloud-based software solutions offer the flexibility and scalability needed to accommodate an expanding property management business. With cloud-based software, management companies can easily add new properties, users, and features without the need for significant infrastructure investments.
Furthermore, cloud-based solutions provide real-time data access from anywhere, facilitating collaboration among community managers, maintenance teams, and tenants. This accessibility is crucial for agile decision-making and efficient community management.
In conclusion, the future of management company software brims with potential. A commitment to innovation in technology will empower community managers to inspire homeowner associations to evolve and thrive. We envision that technology will act as the catalyst for HOAs to achieve their original and highest aspiration - fostering transparent, safe, and collaborative communities that enrich the lives of all.
About the Author:
Matt DeWolf is the CEO of FRONTSTEPS, a leading provider of community management software solutions. With a background in technology and a passion for improving the community management industry, Matt is dedicated to helping management companies leverage innovative software to enhance their operations and deliver exceptional service to their communities.
By Jeff Kerrane, Esq., Kerrane Storz P.C.
Following the tragic collapse of the Champlain Towers South in Surfside, Florida, Fannie Mae took a significant step to modernize lending requirements. These new requirements place a greater emphasis on the property condition and the strength of the community’s reserves. In response to growing concerns about aging infrastructure and extensive deferred maintenance in certain buildings, Fannie Mae introduced a series of measures that will have a profound impact on the condominium market.
In 2021, Fannie Mae unveiled the Temporary Requirements for Condo and Co-Op Projects, a set of guidelines that reshaped the landscape of mortgages in condominium associations. Earlier this year, Fannie Mae amended the temporary requirements, and made them a permanent part of their underwriting standards. The new permanent rules are effective as of September 18, 2023.
Seventy percent of home mortgages are supported by Fannie Mae or Freddie Mac. Fannie Mae and Freddie Mac are private corporations created by Congress to provide liquidity in the mortgage market. Fannie Mae and Freddie Mac buy mortgages from lenders and package them into mortgage-backed securities that may be sold. Fannie Mae and Freddie Mac have thousands of pages of regulations that provide the standards by which mortgages can be approved. Mortgages that qualify under these regulations are often referred to as “conforming” or “conventional” loans.
The first step in determining which Fannie Mae underwriting rules apply to your community association is to know which level of review will apply under the Fannie Mae guidelines:
New Condo Project
Established Condo Project (with a high loan to value ratio)
2-4 Unit Condo Project
Detached Condo Project
Manufactured Home Project
Under the Fannie Mae rules, a condo project includes associations where the owners each own an undivided interest in the common area. A PUD is an association in which the HOA owns the common property. PUDs would include most single-family home and townhome communities.
FULL OR LIMITED REVIEW
For projects subject to a full review, the new Fannie Mae requirements will exclude from financing eligibility any of the following:
These disqualifications allow for a few exceptions where projects may still be eligible for financing, such as projects where the damage or deferred maintenance is isolated to just one or a few units, and does not affect the overall safety, soundness, structural integrity or habitability of the project. The new rules also will not exclude projects in need of only routine repairs that are preventative in nature and are accomplished through the HOA’s normal operating budget or through special assessments that are within guidelines.
In addition, Fannie Mae will now look at an HOA’s reserve funds to ensure that the HOA is budgeting at least 10% of its assessment income to reserves. Alternatively, the reserve funds will be deemed acceptable if the HOA has adequate funded reserves that meet or exceed the recommendations included in the HOA’s reserve study.
The new requirements will now strongly advise lenders to review, at a minimum, the following documents:
Fannie Mae’s guidelines also extend to special assessments. Lenders must review current or planned special assessments, seeking documentation to ensure they don't negatively impact the project's financial stability, viability, condition, or marketability. In the case of assessments related to safety, soundness, structural integrity, or habitability, Fannie Mae requires that all repairs be fully completed.
Fortunately for owners in PUD projects, these new Fannie Mae requirements will not apply. PUDs need only meet the normal Fannie Mae underwriting requirements.
The collective impact of these new modern lending standards is expected to render many condominiums ineligible for loans, potentially affecting the ability to buy and sell condominiums and, ultimately, property values. HOA boards and community association managers will need to become familiar with the new rules and adapt their reserve and maintenance practices to ensure their future viability and safeguard their property values.
Jeff Kerrane is a shareholder with Kerrane Storz, PC, which exclusively represents property owners and community associations in construction defect litigation. Jeff can be reached at firstname.lastname@example.org or at 720-277-2076.
By Adam Thompson
Have you heard of the recent “Xeriscape Bill” [SB 23-178] that was signed into law at the end of May? This new bill overrides pre-existing HOA guidelines that restricted residents from installing xeriscape, artificial turf, and vegetable gardens in their yards. The intent of the bill is to promote water-wise landscapes. Some fear this bill will bring a reduced home values and aesthetic appeal to their neighborhoods. Others see the bill as an opportunity for communities to develop their own unique look, rather than the ‘cookie cutter’ manicured turf landscapes and shrub beds that are common in most residential developments.
Across the front range, steady population growth is bringing in new developments that are putting increased demands on our water supply. Water costs make up a significant portion of an HOA’s budget and we are seeing spikes in water prices as demand makes this resource scarcer.
So what is Xeriscape and what do each of the new changes mean?
Xeriscape (not “zero-scape”) is an approach to landscaping that is mindful of water usage to grow and maintain a landscape. It is not the elimination of water needed to maintain the landscape. Xeriscapes can, and do, include plants and even turf - although many experts would limit turf to areas where it will serve a purpose.
Three pre-approved designs are required for every community which will enable residents and boards to start xeriscape implementation without overburdening the ARCs. Many free designs are available at https://plantselect.org/design/downloadable-designs/ or residents can submit their own water-wise designs for approval. It may be preferable for a community to work with a landscape designer to create a proprietary set of designs and work to establish a common theme.
While there might be a strong push for people to convert their yards to drought tolerant design, several considerations should be made before committing to a yard renovation:
How ever you choose to implement these new rules, I hope you see it as an opportunity to improve the beauty of your yard and your neighborhood.
Adam Thompson holds a B.S. Degree in Landscape Design & Management and has worked in the landscape industry since 2007 working in construction and maintenance between single family homes to resort properties.
By Kevin McAlister and Rachel Schmidt, Higgins & Associates
For any homeowner, the prospect of a flood is a daunting one. With Colorado seeing over five inches of rain in both May and June of this year, breaking a hundred-year record, the likelihood of experiencing a flood has been significantly higher than in a ‘normal’ year. While a flood can be equally as devastating as a housefire, flood mitigation precautions are often overlooked due to the arid environment in which we live. While installing smoke alarms and removing potential fuel sources such as pine needles and leaves are fire mitigation measures routinely undertaken by HOAs, there are some equally simple mitigation measures than can be taken to significantly reduce the likelihood of a water intrusion event.
The principal goal of any flood mitigation activity is to direct water away from structures. This is often easier to achieve in single family communities where buildings are further apart than in multi-family communities where the proximity of buildings creates greater challenges to managing water flow. The second objective of flood mitigation is to prevent water from entering a structure if it does get to the property façade. However, as the adage goes, “an ounce of prevention is worth a pound of cure” so keeping water away from structures in the beginning is far more effective than trying to keep it out once it gets there.
Gutters are used to capture the discharge from roof surfaces. During heavy rainfall, this can result in a significant demand being placed on these drainage systems. If the gutters are insufficiently sized for the roof area or not periodically cleared of debris, the water can spill over the sides and may no longer be directed as intended. It is especially important not just to clear the gutter paths, but to also ensure the flow continues unobstructed through the downspout.
Downspouts are critical in flood prevention as their job is to collect concentrated water flow and move it away from the building and protects the building’s foundation. As the flow from downspouts is concentrated, it can cause soil erosion at the point of discharge which will ultimately cause more issues. Downspouts need to be extended to discharge at least 5-feet from any foundation. Every foot beyond that provides a bonus level of flood prevention. At the point of discharge, downspout extensions need a splash block, cobbles, or some other means to dissipate the water without causing erosion. Finally, it is good practice to require that landscapers reposition downspout extensions that are often lifted-up during mowing or other landscaping activities.
Window wells are a common feature of Colorado properties with basements and should include a curb or other enclosure to prevent water from flowing into the well openings. Window well enclosures that have sunk below grade or do not form a continuous barrier with the foundation wall should be modified to ensure that water cannot enter the well from the surrounding grade.
Overwatering and Sprinkler Maintenance
With our dry climate, many communities benefit from irrigation systems to sustain plants and lawns. However, overwatering, especially during wet weather, can result in oversaturation of surrounding soils. This can create excessive run-off, erosion issues, elevated water tables, and significant underground hydrostatic pressure on foundation walls, thus increasing the likelihood of basement water intrusion. Be sure to turn off sprinklers during wet weather and conduct regular maintenance on water lines to prevent leaks damaging nearby foundations. Being knowledgeable about landscaping and areas where communities can opt for more water conscious planting and landscaping also helps prevent overwatering.
Maintaining Grading Slope
Maintaining adequate grading slope away from a building is one of the more important counter-flood measures. The International Building Code requires that a minimum 5-percent slope is maintained away from structures for the first 10-feet to ensure that water is discharged away from foundations. Flat ground or ground that slopes towards a building is one of the most common issues we encounter at buildings with persistent water intrusion issues. Site regrading and ensuring there is an uninterrupted route to discharge water off a site or to a suitable outlet point is often the only way to address this issue.
Through regular inspection and maintenance, homeowners’ associations can reduce the incidence of flooding issues and avoid the resultant property damage and distress of a water intrusion event. If in doubt, we advise that a professional architect, engineer, or licensed contractor be consulted prior to undertaking any work to ensure compliance with code and that any future repairs fully resolve any identified deficiencies.
About the Authors:
Kevin McAlister leads the Construction Consulting group at Higgins & Associates. He has over 30 years of experience as both a contractor and a construction consultant addressing issues in the built environment, especially within the tight confines of multi-family communities. Kevin advises HOAs on suitable property rehabilitation and maintenance approaches including drainage, roofing and grading issues and consults on the cost requirements of these activities.
Rachel leads the Civil Engineering department at Higgins & Associates. She has devoted her career to working with homeowners to assist them in assessing and resolving their civil and structural engineering problems. Rachel has helped many HOAs and property managers to manage the process from determining the cause of an issue, to designing, implementing, and validating the repair. She has experience with all property types from single-family homes to extensive multi-family home developments.
By Joshua Flanagan, Blue Frog Roofing
With the continued growth and modernization of urban areas comes the human response to energy efficiency and health. Surprisingly, roofing systems can play a large factor in this response. Energy efficiency in regard to roofing is not a new idea; however, it only truly began to gain traction in the United States in the early 2000s when California changed their energy code to use cool roofing for commercial buildings. A cool roofing system is typically when a lighter color roof is installed in areas of high heat to reflect sunlight thus reducing energy costs. Energy efficient roofing has since taken further steps with solar panels and green roofing systems.
The City of Denver passed an initiative in January of 2018 that originally required all new commercial buildings over 25,000 square feet to install a green roof. Green roofs, also known as vegetative roofs or living roofs, by definition are “ballasted roofs consisting of a waterproofing membrane, growing medium (soil) and vegetation (plants) overlying a traditional roof” (U.S GSA). Denver and its voters cheered as this initiative passed, but when it came time to discuss implementation, “it wasn’t looking feasible,” wrote Alicita Rodriguez in the CU Denver News. Rodriquez received some insight from Austin Troy, PhD, chair of urban and regional planning department at CU Denver’s College of Architecture and Planning on why it wasn’t looking feasible. Troy explained how green roofs are extremely expensive because of the structural support needed for the soil as well as the very high irrigation and drainage costs. Troy adds that if you force everyone to build a green roof, then investors are forced to pay a lot of money for something that may not get much use and potentially forgo low-cost green landscaping to save money. It’s important to consider that adding vegetation around buildings and using energy-saving materials can be more cost effective than green roofs while still being environmentally effective.
After half a year, and nine meetings, the Green Roofs Review Task Force changed the initiative to the Green Building Ordinance, effective on Nov. 2, 2018. So, instead of this one size fits all approach, the ordinance changed, permitting “new buildings over 25,000 feet to choose from a series of nine green-energy options in these areas: green roofs/green space, solar/renewable energy, energy efficiency, green building certifications (third-party programs), payment to the Green Building Fund, and the Energy Program (for roof replacement)”(Rodriquez). This gives developers, investors, and contractors a wider range of options while still participating in the modernization of energy efficiency. The following year construction results were a wide range of all nine options, with the most popular being cool roofs only, enrolling in the energy program, and on-site green spaces. Green roofs are still being proposed in Denver, but now a more selective plan can be addressed for those who choose that system.
There are quite a few benefits to these energy efficient roofing systems. Cool roofs and green spaces are known to reduce the Urban heat island with cool roofing systems also saving around 10 to 15 percent in energy costs. Green spaces/roofs are also known to help with stormwater run-off management. Solar panels can reduce operating costs and attract tenants. Cool roofs are probably the most popular of these options listed since it is a simple and less expensive option than the others with choosing the right roof material and color. “Cool roofs achieve the greatest cooling savings in hot climates but can increase energy costs in colder climates if the annual heating penalty exceeds the annual cooling savings” (Energy.gov). In Denver, we typically have more warming days than cooling days, so installing a cool roof can reflect 60 to 90 percent of sunlight. Common materials for low slope (flat) roofs are TPO (thermoplastic polyolefin) which is white in color, PVC (polyvinyl chloride) which can be made with most colors, and light-colored metal roofing (standing seam or exposed fastener metal). However, in parts of the mountains at higher elevations with more cooling days, a cool roof system could be black EPDM roofing materials or dark colored metal roofing systems to retain more heat inside the building. For steep sloped buildings, any lighter colored materials including asphalt shingles can make a big difference in energy efficiency. Metal roofing types including Stone Coated Steel are also known to further energy efficiency. Synthetic materials like Brava or Di Vinci can achieve this as well. There are many other roofing materials, but these are some of the most popular.
Blue Frog Roofing is a premium Roofing company servicing all of Colorado and Southern Wyoming taking an educational, consultative, and preventative maintenance approach. We specialize in Multifamily and commercial roofing and large loss while having a strong service/repair team.
By Connie Van Dorn, CAI-RMC Homeowner Leader
As one of the five stakeholders who brought HB22-1137 to the General Assembly for consideration, I read with relief David’s conclusion that I am, we are, well-intentioned, decent, reasonable people.
Since last fall, I am also now a newly minted CAI RMC member, RMC Homeowner Leader Committee member, and RMC BOD Member at Large in a Homeowner Leader seat. I am here to work from the inside to move that pendulum David mentioned to a reasonable place.
The passage of HB22-1137 had a number of intended and achieved consequences including eliminating industry “insider” purchase of HOA foreclosures, opening up small claims court for some disputes, and others. Most importantly, it did prevent hundreds of what could only be called predatory foreclosures.
David pointed out some of the unintended consequences of that legislation. He didn’t mention, however, that there are some things that were in the bill’s language, that the original stakeholders didn’t bring to the table either. Some of the things that “didn’t work,” will no doubt be addressed in the 2024 legislative session.
If we want community associations in Colorado to thrive, there are other things we can do together, to address some of the challenges we all know exist. Meaningful reform can happen without legislation or with shared stakeholder legislation. For example, I’ve been inspired by CAI's 2020 and Beyond Governance Panel Report and changes its authors contemplated. Transformational Homeowner Leader Education and Training is another opportunity.
While the “costs” of 1137’s implementation are challenging to quantify, perhaps there’s also an opportunity here to work together in innovative ways to strengthen communities, community associations, and the homeowner experience. In recognition of CAI’s 50th anniversary, I like to think that’s what the founders had in mind.
Connie is a retired Human Capital Consultant who enjoyed a career in human resource solutions for distinguished companies and organizations. In addition to being a proud Mom of two amazing adult children and a lifelong volunteer, Connie is a Student of Common Interest Communities and on a mission to strength Colorado HOAs via Homeowner Advocacy.
By David Graf, Moeller Graf, P.C.
HB 22-1137 (“1137”) was the most impactful community association legislation since CCIOA was adopted in 1992. CCIOA’s legislative declaration, at C.R.S § 38-33.3-102(b), states that the “continuation of the economic prosperity of Colorado is dependent upon the strengthening of homeowner associations in common interest communities financially to the setting of budget guidelines, the creation of statutory assessment liens, the granting of six months’ lien priority, the facilitation of borrowing, and more certain powers in the Association to sue on behalf of the owners enter enhancing the financial stability of associations by increasing the Association’s powers to collect delinquent assessments, late charges, fines, and enforcement costs…”
Little more than a dozen years later, SB 100, effective in 2006, was adopted as a “homeowners’ protection act” to protect owners from their associations in certain respects. Fast-forward to 2022, 1137 passes through the legislature to provide additional owner protections with respect to assessment collections and covenant enforcement, largely as a result of negative homeowner experiences in two communities within the state.
I’ve gotten to know some of the stakeholders who were behind 1137, and without exception, I have found them to be well-intentioned, decent, and reasonable people. I’ve also had conversations with some of the legislators who brought forth 1137 and I have found them to be sincere in their efforts to address what they see as the primary issues affecting community association collections and covenant enforcement here in Colorado. I don’t personally believe that any of these individuals are actively trying to destroy communities, nor are they anarchists, or opposed to holding owners to their responsibilities to their neighbors by virtue of living in a common interest community.
We don’t always agree on where the pendulum should fall between vigorous enforcement of community standards and obligations, on the one hand, and a lack of enforcement of community standards and obligations for the benefit of a few to the detriment of the many, on the other hand. For everyone who doesn’t have to pay their assessments, their neighbors have to absorb that debt. For those who take good care of their property, it is of little comfort when they walk out the front door and have to look at the blighted property next to them. The goal of everyone, 1137 stakeholders included, should be to find a balance where people can come back into compliance while the needs of the neighbors are honored for the most part, for most of the time.
On the topic of collections, associations had to adopt a new collection policy and essentially “retool” their collection process, time frames, and form documents based on the requirements of 1137. This created a gap in collection activity, in my experience, of about six months. I have heard reports of accounts receivable balances increasing during this window of time, and while I believe some of it is due to a lack of collection effort, some of it could also be attributed to the softening economy.
The posting of the delinquency notice on the door is an issue that caused a lot of stress to boards and management teams. The concerns were that the cost of the posting, the safety of who was doing the posting, and the potential for a negative owner experience in having a delinquency notice posted on the door early in the collections process. All of those concerns, in my experience, were valid. However, I have heard that the posting on the door has been effective in getting the attention of owners to pay their assessments.
I don’t believe that anyone would dispute that the number of foreclosures filed by associations after the effective date of 1137 has fallen dramatically. There are a number of limitations on association foreclosures imposed by 1137. I’ve discussed this issue with a few stakeholders and other interested parties and they seem to believe that due to the falling number of foreclosures, the bill has worked as intended. I don’t think that the analysis is quite as straightforward. Yes, I think that non-urgent foreclosures being prohibited is a good thing. With that said, there are times when foreclosures may be the only remedy available to a community association.
For example, I’ve experienced board members who were scared to foreclose on an owner notwithstanding the fact that a judgment had already been entered against them, numerous collection remedies had been pursued, and the owner still has not made a payment in several years. If all other remedies have proven ineffective and the owner appears to be intent on not paying and not communicating with their association, foreclosure should be a reasonable remedy.
Additionally, the prohibition on foreclosing on covenant violation fines has left some of our clients without recourse for owners who are unwilling to maintain their properties to a minimum community standard after having been ordered by a court to maintain their properties and failing to do so after many months or even years. In those cases, the association is without recourse to deliver a solution to the community for a covenant problem that a judge has already determined needs to be remedied. This is not so much an economic impact to the association per se, but it is a potential impact on neighboring properties that might be up for sale and it begs the question of who has more rights-- the neighbor contemplating a loss in market value of his or her home or the owner who has steadfastly refused to maintain their property for months or even years?
On the subject of covenant violations, while there are a number of procedural issues with 1137, the financial impact of the $500 maximum fine on a covenant violation not affecting the health and safety of the public stands out. It has been my experience that violation fines can be one of several effective tools to gain compliance. However, for many communities, a $500 maximum fine takes that nonjudicial tool off the table. Said another way, there are some owners who would gladly pay the fine to remain out of compliance. This has the unintended consequence of increasing the possibility that an association would have to pursue a covenant violation lawsuit because the association was prohibited by law from getting the owner’s attention to remedy the violation through violation fines.
From my perspective, much of the hysteria surrounding the adoption of 1137 has not come to pass-at least so far. The burden of complying with 1137 has scared a number of self-managed boards out of being self-managed and has caused management companies, for the most part, to pass on those costs to their clients. I have heard of very few and isolated reports of people abusing the language option contained within 1137. The designated contact for communication has been a positive development. New conversations about how to address community issues amicably and inexpensively have taken place.
The true financial impact of 1137 that I worry about has not yet been felt on a grand scale. Specifically, I’m referring to the eighteen-month payment plan. We’ve had a number of hailstorms throughout Colorado this summer, and there will be deductible apportionments/special assessments as a result. For those owners who have not protected themselves adequately with HO6 loss assessment coverage or otherwise, if they choose to pay the assessment over eighteen months in any appreciable number, associations are going to be strained in funding necessary infrastructure repairs. When that happens, I think that we will understand that the pendulum has swung a little too far out of balance for the health of associations that maintain critical infrastructure.
David Graf has practiced community association law exclusively since 2001. Regarded as one of the most sought-after community association industry speakers in the United States, David has been recognized for several awards, notable CAI’s National Educator of the Year (2015). David has been admitted to the College of Community Association Lawyers (“CCAL” or the “College”). In 2018 and 2020, David was elected by his CCAL peers to the College’s Board of Governors and is the current President of the College.
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