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  • 04/01/2022 8:29 AM | Bridget Sebern (Administrator)

    By Jesus Burciaga, CP&M (Community Preservation & Management, Inc.) 

    Grading and drainage are critical aspects of both multifamily and single-family residential development that are often overlooked despite the importance of proper grading and drainage. Parking areas or common areas of multifamily developments sometimes are not adequately graded, resulting in damages ranging from shortened parking lot life to catastrophic building damage, even liability hazards such as:


    • Heaving concrete
    • Poor common area drainage
    • Foundation damage
    • Abnormal sloping toward a building
    • Rear and side swales of building holding water
    • Unsuitable high grading around the building


    Poor grading/drainage is not always evident. When walking the property, the following can be a red flag that there are underlying issues: 


    • Unstable soil is caused by water absorption into the ground. The more water the ground takes on, the less stable the ground will be. The ground surface may look as it should but walking through the landscape may bring the waiting water to the surface.
    • Landscape Drainage Issues – water will run towards the parts of the lowest and least protected landscape areas. 
    • Puddles/ponds indicate where your landscape fails to drain. 
    • Dying grass or landscape can rot plant roots due to excessive water. 
    • Mosquitoes – standing water is a breeding zone for mosquitoes. 


    A moderate amount of time is needed to address poor/negative grades to avoid significant property damage. Drainage corrections can consist of numerous solutions defined by specific grading and drainage issues. 


    • Xeriscape concepts help solve drainage problems, save water, and improve aesthetics. 
    • Laser leveling technique to grade
    • Grass/Cobble/Surface drainage swales
    • French Drain/underground pipes and area drain.
    • Custom built chase or grate system protect drainage systems and drive water away from  buildings and down into a rock-filled area. These rock areas blend in with landscaping and protect the buildings compromising landscape design. 
    • Concrete pans  
    • Infrared patching, crack sealing and seal coat to fix less damaged areas.
    • Gutters and downspouts should be free of obstructions to stop pooling around the perimeter of the building. 
    • Waterproofing your foundation can keep water away from goods.


    While doing annual walks to inspect exterior aspects of a community are an industry standard, grading and drainage are often overlooked during these inspections. Grading and drainage issues are not evident to the naked eye. Ensuring that someone is looking out for the above issues can help extend the life of your community and buildings and avoid costly damages created by negative grading and drainage. 


    Jesus Burciaga has been with CP&M (Community Preservation & Management, Inc.) and its many entities for over three years. Being part of the growth of CP&M, a full-service General Contractor along with its in-house roofing division, R3NG, has been a fantastic journey. CP&M specializes in providing solutions for Commercial Property Managers, HOA-managed multi-family & single-family communities, REO rehabilitation, apartment industries, and government housing entities.  

  • 02/01/2022 8:26 AM | Bridget Sebern (Administrator)

    By Jamie Cotter And Jacob Hollars, Spencer Fane

    The short answer is because the distinctions between Metro Districts and HOAs are murky to say the least.  Additionally, people who are not integrally involved with Metro Districts often don’t use precise language.  All of this leads to understandable confusion around the similarities and differences between Metro Districts and HOAs.

    Metro Districts v. HOAs – How each are created.

    Putting aside all of the legalese that we lawyers are famous for, the decision to create a Metro District or an HOA usually goes something like this:  

    A developer buys a vacant piece of property where it intends to develop a new residential community.  The developer has two choices at this early stage.  First, the developer can fund the costs associated with constructing all of the infrastructure and then build those costs into the price of every new home, resulting in a higher price for the new homes.  This option also usually involves the creation of an HOA that is initially controlled by the developer. The HOA usually funds maintenance and improvements on HOA property.  That is, while the infrastructure is usually dedicated to either a city or town, the HOA remains responsible for maintaining community resources (open space, parks, etc.).  HOAs also routinely adopt covenants that the HOA then enforces through a board of homeowners.  Homeowners pay for the maintenance and covenant enforcement through dues and special assessments.   

    The second option is to create a Metro District.  A Metro District is created by the approval of a “Service Plan” by the local municipality (usually a city, town, or county).  The Service Plan outlines the guideposts for the development.  The Service Plan recites what powers the Metro District has, how much debt the Metro District can incur, and whether the Metro District will continue after such time as the development is built and the debt is paid off.  Once the locality approves the Service Plan, a court must create the Metro District as a quasi-governmental entity and an election is held to determine who will serve on the board of directors.    

    Now comes the “cool” part (and yes, I recognize that the bar for what constitutes “cool” according to we lawyers is VERY low): the Metro District can sell tax-exempt bonds to fund the infrastructure costs.  Because the bonds are tax-exempt, the cost to fund the infrastructure is less than if the developer had to obtain private financing to construct the infrastructure.  When the Metro District sells tax-exempt bonds, a mil levy is assessed against the property in the Metro District.  The mil levies are paid as taxes by the residents based on the assessed value of their property.  And in most circumstances, a homeowner’s payment of their annual property taxes is tax deductible. This arrangement results in a lower home price because the developer does not have to recoup the costs of a private loan.  Once the bonds have been repaid (i.e. the costs of the infrastructure have been satisfied), the Metro District must decide whether to dissolve or continue in order to maintain the community and undertake covenant control.  When a Metro District continues to provide maintenance and covenant control, it fills the role of a typical HOA, resulting in confusion.

    With that background, let’s dive into a couple of topics where the powers and responsibilities of Metro Districts and HOAs differ.  For purposes of this discussion, let’s assume that the community is managed and maintained by either a Metro District or an HOA.  It is common for a community to have both a Metro District and an HOA, but for simplicity we are going to consider an either/or situation.  

    Ownership and Maintenance of “Common Areas”

    The main difference between Metro Districts and HOAs with respect to common areas relates to how those services are paid for and the tax advantages available to Metro Districts as owners of property.  If a Metro District owns and/or maintains property within its service area, it can charge the homeowners who benefit from that ownership/maintenance for the resulting costs.  This can be done either by the imposition of an operations and management mil levy or fees.  If these costs are paid by an O&M mil levy, those costs are typically tax deductible to the homeowners.  If the costs are paid through the imposition of fees, those fees would be treated similarly to HOA dues.  A Metro District can impose fees for services that are rationally related to the costs of providing those services.  The Metro District must set its fees through a resolution adopted at a public meeting.  However, there is no formal “vote” of the homeowners at an election. Conversely, HOAs can impose fees and assessments in accordance with their declaration and covenants and the provisions of CCOIA.   

    Building Additional Infrastructure or Public Improvements

    After the development has been completed and the community is operational, it is possible for the community to need to obtain additional property for new infrastructure or public improvements.  For example, this can happen when a community grows to such an extent that it needs a new rec center or park.  In that instance, if the community is managed by a Metro District, Metro Districts have the power of eminent domain.  That means that a Metro District can take private property without an owner’s consent.  The Metro District must pay just compensation for the property, but it does not need the owner’s cooperation to obtain the property.  Conversely, HOAs do not have the power of eminent domain.  Therefore, the HOA would have to find private property to purchase.  Any purchase would have to be done voluntarily.  The ability to condemn property for a public purpose is a major benefit inuring to Metro Districts but not to HOAs.

    Collection of Fees

    Both Metro Districts and HOAs can engage in covenant control and can impose fees related to those covenants.    When a Metro District assesses a fee for services and that fee is not paid, the outstanding fees automatically become a perpetual, statutory lien against the property served.  That is, the Metro District obtains a lien against the property by operation of law.  That lien is also considered a tax lien and is superior to all prior liens except prior tax liens.  When an HOA assesses a fee for services and that fee is not paid, the HOA can also obtain a lien against the property served.  While a portion of the HOA lien may have priority over prior-recorded interests, like mortgages, it is junior to any tax lien, any Metro District lien, and any liens recorded before the recording of the declaration.  The portion of an HOA lien that is superior to a first mortgage on the property is limited to the extent of six months’ worth of common expense assessments that would have become due before the filing of a foreclosure lawsuit.  In short, Metro District liens are “easier” to foreclose given their priority.

    Conclusion

    Metro Districts and HOAs are responsible for maintaining numerous residential developments in Colorado.  They both serve important purposes and often work together rather than the “either or” situation discussed in this article.  While Metro Districts and HOAs are similar, they have key differences of which developers and homeowners should be aware.  


    Jamie Cotter, Esq. and Jacob Hollars, Esq.  Jamie and Jacob are both litigators at Spencer Fane.  They specialize in helping municipalities, special districts, and other quasi-governmental entities that are facing litigation by advising them on how to pursue or defend against claims so that they can move through the litigation process as efficiently and successfully as possible. They have a keen understanding of the specific laws affecting these entities and represents them in the district court and appellate court level.

  • 02/01/2022 8:24 AM | Bridget Sebern (Administrator)

    By Connor B. Wilden, Orten Cavanagh Holmes & Hunt, LLC

    In theory it sounds great: “Annual assessments may not be increased by more than the increase prescribed by the Consumer Price Index.” No unexpected assessment increases! No ability for a board of directors to arbitrarily choose to increase dues for some vanity project! What more could a homeowner ask for? 

    The reality, though, is that fixed annual assessment increases present far more issues than potential solutions. While a fixed annual assessment increase may cause a wide multitude of problems, those problems generally stem from one singular issue: an underfunded community. When a community becomes underfunded due to restrictions imposed by a fixed annual assessment increase, its obligations do not go away. 

    To best show potential downfalls and solutions for when a community becomes underfunded due to a fixed annual assessment increase, let’s look at an example which may be familiar to many communities throughout the Front Range. 

    There is a hypothetical community somewhere south of Denver, but north of Colorado Springs. It has a provision in its declaration which caps the annual assessment increase to no more than a 3% increase each year. This hypothetical community (“HOA”) consists of twenty townhomes and was founded in the late 1980s. It has not regularly increased its assessments since its creation. 

    In the past decade, the area in which this HOA exists was hit by multiple catastrophic hailstorms. Fortunately, the HOA has not been directly impacted by any of the hailstorms. However, this does not mean the HOA has escaped unscathed, as many of its neighbors have been hit and damaged by the hailstorms. As such, insurance premiums across the entire Front Range have substantially increased so that insurance carriers may meet their increased obligations due to the higher-than-average amount of significant hailstorms. 

    When the HOA received its insurance renewal notice this year, its insurance premiums had increased nearly 50%! In developing the proposed budget for the next year, the Board of Directors quickly concluded that there was no way the HOA would be able to meet all its obligations when, as per the Declaration’s assessment cap, it can only increase the annual dues of its members by 3% each year. 

    This HOA must come up with a creative solution in order to meet the obligations set forth in its Declaration, while also accommodating the challenge of insurance premium increases. 

    Often, communities in Colorado which have fixed annual assessments increases will also have provisions in the assessment section that states if more than the fixed increase is desired, such an increase may take effect if approved by a certain portion of the community. Unfortunately, this HOA lacks any language in its documents that permits its owners to approve an annual assessment more than 3%. 

    Without that authority, the HOA has a few choices of how it may proceed: 

    • The HOA could seek a special assessment to cover the increase of costs from insurance. This may be a practical way to address a budgetary shortfall within one calendar year, but where insurance premiums have increased significantly, it is highly improbable that the premiums will decrease the following year. A special assessment may be a good stopgap but is certainly more of a band-aid than a real solution.
    • The HOA could seek to amend its Declaration to remove any caps on the annual increase in assessments. Depending on the Declaration amendment approval requirements, approval of the proposed amendment will take the affirmative vote or agreement to which more than 50% of the votes in the HOA are allocated or any larger percentage, not to exceed 67%, the Declaration specifies.  Depending on the level of community involvement or support for the amendment, this may be difficult. While amending the Declaration to remove the cap is a potentially long and expensive process, it is essentially the only permanent solution to address the underfunding issues brought on by fixed increase assessments. 

    Having a reasonable and balanced budget is vital to a healthy common interest community. Although it is difficult to forecast factors such as significant insurance increases, one tool a community has to ensure an adequate budget for major expenditures while keeping an eye out for its owners’ pocketbooks is to make sure it has an up-to-date reserve study. Having an up-to-date reserve study allows a community to have a great understanding of what community elements may need replacement soon, or what may need replacing in ten or twenty years. This allows a community to adequately plan and save for large projects. 

    While fixed increase annual assessments may present challenges for your community, these challenges are not without solutions. Unfortunately, these solutions may not be straightforward or easy to implement. As such, if your community is currently facing any problems due to fixed increase annual assessments, you should contact your community association attorney. 

    Please note, this article, while attempting to be general in nature, is not reflective or indicative of any specific community and may not apply to your community. 

    Connor B. Wilden is an attorney at Orten Cavanagh Holmes & Hunt, LLC.  He provides general counsel and transactional services to community associations throughout Colorado. 


  • 02/01/2022 8:21 AM | Bridget Sebern (Administrator)

    By Damien M Bielli, Vial Fotheringham, LLP

    The Colorado Common Interest Ownership Act prohibits an association from selectively enforcing declarations, articles, and bylaws. The statute commands that, “[d]ecisions concerning the approval or denial of a unit owner's application for architectural or landscaping changes shall be made in accordance with standards and procedures set forth in the declaration or in duly adopted rules and regulations or bylaws of the association, and shall not be made arbitrarily or capriciously.” C.R.S. 38-33.3-302(3)(b).

    Selective enforcement by an HOA is a failure to uniformly apply the HOA’s rules and regulations to all owners. This can occur in architectural requests, collection of unpaid assessments and most commonly in enforcing rules and regulations. Simply, the HOA is guilty of selective enforcement when it picks and chooses how enforcement is carried out and against whom the rules are enforced. This can occur intentionally or by oversight and is problematic when the Association faces judicial scrutiny.  

    Selective enforcement is like selective hearing. As a husband and father, I have been accused of selective hearing. Some may believe this is intentional. More often than not it is merely a failure to pay attention. In the same way, selective enforcement is viewed by many as an intentional act of the association. This leads to animosity between owners and board members and can lead to claims of discrimination. Most significantly, it is an affirmative defense to enforcement actions against owners. Most of the time, however, selective enforcement arises from benign causes and is preventable. 

    Many selective enforcement concerns can be alleviated by instituting and following comprehensive and specific policies. These policies should be clear and concise and provide a timeline of enforcement from inception to conclusion which can be followed by owners and board members. Strict adherence to policies removes subjective decision making which may be viewed as “selective” and ensures that each violation follows the same path to conclusion. 

    In evaluating an owner’s claim of selective enforcement, courts in Colorado will evaluate the enforcement process of the association as well as its history of enforcement: 

    “It appears from the log of the Plaintiff that it has consistently looked into possible violations as set forth in Plaintiff's Exhibit 27. As an example, it appears that a total of 125 violations were issued in the 13 months period between April 2007 and May 2008. There were also 57 [Design Review Requests] processed between January 2006 and May 2008. That does not require that every violation be sustained or even pursued upon proper investigation but it does indicate that there is no selective enforcement going on here.” 

    Weatherspoon v. Provincetowne Master Owners Association 2010 WL 3522559.

    It is important that the association keep detailed records of its enforcement actions not only to provide supporting documentation for individual violations, but also as evidence of its uniform enforcement throughout the community.  

    Equally important to a uniform and neutral enforcement policy is uniformity and consistency in reporting violations. Associations that rely on management to observe and report violations can look to the management contract for frequency and depth of inspections. This reduces the likelihood that an owner will be successful on a claim for selective enforcement. Associations that are self-managed should adopt guidelines for inspections and reporting violations. The guidelines should identify the depth and frequency of inspections in order to remove any subjectivity. This reduces inconsistency in the inspection and reporting process and serves to further neutralize allegations of selective enforcement.  

    Finally, associations who have been more relaxed in enforcing the Declaration may find themselves in a precarious position once the Board decides to pursue violations. One Colorado Court stated:

    “In Colorado, a homeowners' association is estopped from enforcing a covenant against a particular owner where (1) the association had full knowledge of the facts, (2) unreasonably delayed in asserting an available remedy and (3) there is intervening reliance to the detriment of the lot owner. Woodmoor Improvement Assoc. v. Brenner, 919 P.2d 928, 931 (Colo. App. 1996); Holiday, Acres Property Owners Assoc., Inc. v. Wise, 998 P.2d 1106 (Colo. App. 2000) (homeowners association estopped from enforcing a covenant upon a lot owner). See Cole v. Colorado Springs, Co., 381 P.2d 13 (Colo. 1963) (corporation waived right to enforce a restriction when in the past it acquiesced and refrained from enforcing it against others).”

    Schneider v. Eglantine Condominium Association Inc. 2009 WL 2626287 (Colo.Dist.Ct.) (Trial Order). 

    While the Court concluded that the association waived its right to enforce the documents in this particular case, the decision was based upon the association choosing when to enforce its governing documents. 

    While some Board members may be sympathetic to certain homeowners or consider certain violations as more or less significant, the association, through its board, has a duty to uniformly and consistently apply the rules and regulations to every owner. Failure to do so will likely result in frustration of enforcement efforts and financial consequences.  


    Damien M Bielli, is a Partner with Vial Fotheringham LLP. Damien has an extensive background in Homeowners’ Association Law, Non-Profit Corporate Governance, trial advocacy, insurance defense, professional liability, coverage disputes, employment law, construction, commercial litigation, and contracts.

  • 02/01/2022 8:19 AM | Bridget Sebern (Administrator)

    By Ashley Nichols, CAI-RMC Editorial Committee Chair

    The recent Marshall fire that ravaged Boulder County destroyed nearly 1,000 homes.  In the face of the most destructive fire in Colorado history, many of those affected are now dealing with what to do in the aftermath.  Rebuilding their homes (and their lives after loss) takes a community.  It also isn’t something that will, or can, happen overnight.  One of the questions that we are already facing is that of what happens to assessments for those owners in affected community associations that lost their homes, or where common area amenities were destroyed.  And it’s a tough one – but it is important to remember that owners’ assessments go to pay for common expenses of an association, which continue even during the rebuilding process.  

    Associations are non-profit corporations with Boards that have a fiduciary duty to protect, preserve, and enhance the property values in the community.  Part of the duty is to ensure that the governing documents for the Association are followed, and in the case where disaster affects a community, such as with the Marshall fire, while it may be hard to see right now through the tragedy, continuing to ensure that assessments are paid will help communities rebuild.

    While not the same type of tragedy, in 2020 (and ongoing) the COVID pandemic posed a similar question of how to deal with assessments for impacted owners due to something out of their control.  Incomes of many homeowners in communities were likely significantly reduced and/or eliminated.  And the best advice during that time remains the same here, for owners who lost homes and/or parts of their communities due to the fire – to be compassionate.  Each community board will have to make difficult decisions based on the different circumstances of each of their owners, which means considering the hardships that their residents may be experiencing and be willing to work with residents to ensure that homeowners and their associations are both able to meet their needs to support their families and communities.  

    The Rocky Mountain Chapter of Community Association Institute is here to support our communities during this difficult time as well.  Donations from business partners, management companies, and homeowner leaders totaling over $7,500 have been received and distributed to partners in order to help those affected by the fire.  We will continue to use the resources that we can to help these communities rebuild, better and stronger.

  • 02/01/2022 8:18 AM | Bridget Sebern (Administrator)

    By Deborah Wilson, Springman, Braden, Wilson & Pontius

    In addition to the myriad of COVID-19-related moratoria and executive orders since March of 2020, the Colorado legislature also implemented a number of new laws affecting the Landlord/Tenant relationship in 2021. Most of those changes are related to residential leases so it is important that those living and renting units in covenant-controlled communities know and understand these new changes, and for Community Association Boards to understand what restrictions they may impose on homeowners who rent out their units. A Board must also manage its expectations of how quickly a Landlord/Homeowner is able to resolve lease or rule violations by a Tenant within the community in today’s legal climate.

    HB 21-1121: House Bill 21-1121 became effective 6/25/21. Among other things, (1) the bill restricts a residential Landlord’s right to raise the rent more than once in a 12-month period after the first year, regardless of the term of the lease, (2) the bill prohibits a sheriff from executing on a residential writ of restitution for at least 10 days after the judgment for possession enters, and  (3) if no written agreement exists between the residential landlord and the tenant, the landlord must give at least 60 days written notice of rent increase and may not serve a Non-Renewal Notice of oral lease where the primary purpose is to increase the tenant’s rent more than once a year. As a practical matter, Community Association Boards should require all Landlords to have and provide a copy of a written lease agreement and understand that a Homeowner as Landlord may face delays in the eviction process under this new law.

    SB 21-173: This 15-page bill became effective 10/1/21 and makes sweeping changes to the laws governing residential leases in Colorado, particularly in the area of late fees, the wording of residential leases, and the eviction process. With regard to the residential eviction process, a residential tenant now has up until entry of judgment for possession to pay all amounts stated on the demand (including any HOA fines listed) plus any subsequently accrued rent to the Landlord or to the Court. The Court shall set the trial for a date 7-10 days after the answer is filed; however, except in cases arising from substantial violation of lease/law, the court may delay the trial date where good cause exists, or a delay is justified. As a practical matter, Landlords often face long delays in the eviction process right now. The law governing the warranty of habitability have been expanded to increase defenses for tenants, which in turn create legal problems for Community Associations who should increase response time for repairs and treatment for infestation of pests and rodents in the community common areas. The bill imposes new substantial damages upon a Landlord who removes/excludes a tenant from a residential home without resorting to court process, except where abandonment is clear. 

    HB 20-1332: House Bill 20-1332 became effective 1/1/21. It adds discrimination based on source of income as a type of unfair housing practice. A residential Landlord may not refuse to rent or show a rental unit, or accept an offer to rent, or make a unit unavailable because of someone’s “source of income.” The Landlord may not advertise in a discriminatory way and must now accept public housing INCLUDING SECTION 8 VOUCHERS if the applicant otherwise qualifies, so long as the initial payment to Landlord is made timely. There are two exceptions in the bill: (1) Landlord who owns or manages 3 or fewer residential units is exempt for the entire bill and (2) a Landlord who owns 5 or fewer rental units is required to comply with this bill, except that the small Landlord is not required to accept Section 8 vouchers for any single-family rental units they may own. Community Association Boards should not prohibit Homeowners from renting to Section 8 tenants or otherwise discriminate based on the tenant’s source of income. 

    SB 20-108: Senate Bill 20-108became effective 1/1/21 and creates a private right of action for violation of civil rights against a Residential Landlord who discriminates based on an Applicant’s or Tenant’s actual or perceived immigration status. Housing providers may not inquire about, request, or disclose information regarding immigration status, may not harass or intimidate a tenant because of immigration status, and may not refuse to rent to them if they otherwise qualify. Community Associations may not prohibit a Homeowner from renting to tenants who are not lawfully present in the U.S. or require a homeowner to demand social security numbers for their tenants.

    In addition to compliance with the above new laws, Landlords and Community Associations should be aware of existing Colorado laws on Application fees, rent receipts, gas appliances, carbon monoxide detectors, habitability, Fair Housing, screening restrictions as well as governmental restrictions based on protected classes, assistance animals, restrictions on occupancy standards and unrelated tenants. Landlords leasing to tenants governed by Community Associations should always incorporate by reference the Community governing documents into their leases, require tenants to read and abide by Community Rules and Regulations, and be subject to any damages or fines assessed by the Association for failure to comply.

    Deborah Wilson is an attorney and managing shareholder at Springman, Braden, Wilson & Pontius, PC.  Springman, Braden, Wilson & Pontius has been assisting Community Association Boards, Landlords and Property Managers for over 30 years in their collections, evictions, Fair Housing, and general counsel needs.  

  • 02/01/2022 8:14 AM | Bridget Sebern (Administrator)

    By Penny Manship, Burg Simpson Eldredge Hersh Jardine, P.C.

    Within days of the tragic partial collapse of the 12-story beachfront condominium at Champlain Tower South in Surfside, Florida, on June 24, 2021, the leadership of Community Associations Institute (CAI) met and began outreach to other organizations with a goal of providing policy recommendations to ensure such a catastrophe never happens again. 

    In October 2021, CAI published the Condominium Safety Public Policy Report: Reserve Studies and Funding, Maintenance, and Structural Integrity (Report). The Report was the result of more than three-months of investigation by three task forces and over 600 volunteers, engaged in meetings, conversations, surveys, research, interviews, and identification of clear recommendations. It provides policy positions adopted and approved by CAI regarding “Reserve Study and Funding” and “Building Maintenance and Structural Integrity.”

    Reserve Study and Funding Policy Positions:

    CAI recommends state laws that mandate reserve studies and funding for all community associations. The Report contains recommendations for public policies to be adopted into state laws, including but not limited to: 

    • mandatory reserve studies at transition/turnover from declarant to homeowner control and at a periodic basis thereafter; 
    • mandatory reserve funding for all community associations; and 
    • mandatory disclosures to new buyers. 

    While the Report acknowledges that it is unknown if updated standards in this area would have prevented the collapse at Champlain Towers South, the authors noted that “80% of community managers, board members, and contractors in community associations surveyed across the U.S. felt it was critical that their association have adequate reserves in the event of a major infrastructure failure or construction need.” Clearly, education regarding the purpose of reserve studies and funding is necessary because, while they are important planning tools for budgeting for replacement and repairs based upon normal life cycles, they are not intended to deal with existing building conditions or defective original construction.

    The Report also contains a Summary of State Reserve Fund Laws as of October 2021. The table below summarizes those states with mandatory existing reserve study and operating funds requirements.

    Mandatory Requirement

    States Where Adopted

    Reserve studies for condominium associations

    California, Colorado, Delaware, Hawaii, Nevada, Oregon, Utah, Virginia, Washington State

    Reserve studies for developers 

    California, Delaware, Florida, Nevada, and Oregon

    Reserve funding for condominium associations

    Connecticut, Delaware, Florida, Hawaii, Illinois, Massachusetts, Michigan, Minnesota, Nevada, Ohio, and Oregon

    Reserve funding for developers

    Arizona, Delaware, Florida, Nevada, Oregon, and Wisconsin

    Building Maintenance and Structural Integrity Policy Positions:

    CAI recommends laws that impose additional requirements upon developers at turnover and prior thereto, including but not limited to: 

    • providing a complete set of final approved architectural and engineering design drawings; 
    • inspections during construction to ensure general conformance with plans and specifications;  
    • providing preventative maintenance manuals; and 
    • disclosure of future “Building Inspection Requirements.”

    With respect to this last requirement, the Report sets forth CAI’s recommendations for “[m]andatory building inspections of the major structural elements owned or maintained by the community association for all multi-family buildings of concrete, load bearing masonry, steel, or hybrid structural systems such as heavy timber including podium decks.” The inspection recommendations, which apply to new construction and existing buildings, set forth the following timelines and scopes:

    First Inspection:
      • New construction: within 5 years after occupancy
      • Existing buildings (more than 10 years old): within 2 years of passage of statutory requirement
      • Purpose: Baseline for future inspections and identify issues of immediate concern; recommendation for next inspection in accordance with timing set for period inspections below
    Periodic Inspections:
      • Every 10 years for first 20 years since construction and 5 years thereafter, unless prior inspection recommends sooner
      • Purpose: Monitor progressive deterioration and identify issues of immediate concern; recommendation for timing of next inspection
    Immediate Inspection(s):
      • Any time there is a concern about safety or stability of structure
    Scope of Inspections:
      • Protocol set forth in ASCE Standard SEI/ASCE 11-99 (latest edition) Guideline for Structural Condition Assessment of Existing Buildings or other industry standards

    The Report also recommends legislation that empowers a community association’s governing board to impose a special assessment or borrow funds necessary for “emergent life safety repairs” without a vote of the membership, regardless of any provisions in the governing documents to the contrary.

    CAI’s Federal Legislative Action Committee also addressed in the Report “Federal Solutions and Policy Priorities.” The priorities discussed include easing financial burdens on local governments, engaging federal housing agencies regarding loan products, and easing financial impacts on homeowners through changes to income tax codes.

    CAI’s Best Practice recommendations are also included in the Report with respect to reserve studies and funding and building maintenance. 

    We should all recognize that this is only the beginning of what is sure to be a long process of changes on the federal, state, local and community levels. Community managers, board members, and homeowners must continue to be involved in educating themselves on how proposed legislation, regulations, and changes to governing documents will impact their communities and keep them safe. 

    Penny Manship is an attorney at Burg Simpson Eldredge Hersh Jardine, P.C. She has over 20 years of experience representing homeowners associations and homeowners in construction defect litigation. She is a member of the CAI-RMC Mountain Conference Committee. 

  • 02/01/2022 8:11 AM | Bridget Sebern (Administrator)

    By Kerry H. Wallace, Goodman & Wallace, P.C. 

    Often in planned communities and rural areas owners purchase adjacent lots which remain undeveloped. The purpose typically is to protect privacy and views for the developed adjacent lot. Merging the lots into one or adding landscaping and improvements can require the community to address development standards and plat amendment legal requirements. Recent legislative changes relative to taxation of adjacent undeveloped lots likely will lead to many communities needing to insure that correct legal processes are adhered too and that the communities’ governing documents are up to speed.  


    Tax Implications 

    The Gallagher Amendment, adopted in 1982, requires the legislature to annually adjust the tax rate for residential real property but set a fixed assessment rate for "all other taxable property" at twenty-nine percent. Because of this requirement, the General Assembly has continually lowered the assessment rate for residential real property, the result being a significantly lower assessment rate for “residential real property.” For example, during the years 2013 to 2015, the assessment rate for residential real property was 7.96 percent. In contrast, the tax rate for vacant land remained at twenty-nine percent. With such a large discrepancy, landowners often seek classification of adjacent undeveloped land as residential land under Section 39-1-102(14.4)(a), C.R.S. (2019) which expressly contemplated the classification of multiple parcels as residential land. In those situations in order to qualify, per the law applicable until now, any undeveloped parcels were required to be: (1) contiguous with residential land; (2) used as a unit with residential land; and (3) under common ownership with residential land. 


    In 2020 the Colorado Supreme Court decided Mook v. Summit County Board of County Commissioners, 457 P.3d 568 (Colo. 2020), which addressed the standards used to determine if an undeveloped  parcel can be considered residential for tax purposes. The holding lead to an amendment of the portion of the statute that defines Residential Land, with the following being a new key aspect of that defined term: “A parcel of land without a residential improvement located thereon, if the parcel is contiguous to a parcel of residential land that has identical ownership based on the record title and contains a related improvement that is essential to the use of the residential improvement located on the identically owned contiguous residential land. “Related improvement” means a driveway, parking space, or improvement other than a building, or that portion of a building designed for use predominantly as a place of residency by a person, a family, or families.”


    Community Considerations and Approaches

    Depending on how the enforcing governmental agencies apply the new statutory definitions relative to Residential Land, communities may see an increase in requests to merge lots and/or add “Related Improvements”to a contiguous undeveloped lot in order to acquire or maintain the residential classification for tax purposes. Communities can allow for smooth governance on such matters by adopting policies and procedures relative to merging lots, amending building envelopes and constructing improvements on adjacent lots. In the event of a required amendment to a final plat or plat map, it is important to insure that the requirements of the Colorado Common Interest Act at C.R.S. 38-33.3-217 (1) are met, which requires the approval of 67% of the owners to amend a plat (this is lowered to 50% if the Declaration for the community provides for that lower percentage). This means that any plat amendment should receive association approval through the Board, 67% approval by the owners as well as meeting all governmental requirements. A plat amendment that does not meet these requirements is arguably void.


    KERRY H. WALLACE  is a Partner in the law firm Goodman and Wallace, P.C. located in Edwards – 15 miles west of Vail. Kerry’s practice focuses upon resort based common interest communities including governance guidance and compliance with the ever-changing common interest community legal landscape. Kerry served on the Eagle County Planning and Zoning Committee from 2003-2007, is a current Business Partner of CAI-RMC and has been a speaker and panel member at numerous CAI Colorado - Rocky Mountain conferences.

  • 12/01/2021 6:07 AM | Bridget Sebern (Administrator)

    By Sabrina Lopez, CMCA, AMS, Westwind Management Group

    In most associations, it seems that doing that weekly drive to find those owners in non-compliance is the rage lately or has it been for some time now? Do you find that this brings a sense of community to those living in your association when they get this violation letter in the mail? I have come to find that many owners on the other side of those violation letters don’t seem to feel that way. Just think about if you maybe just moved in or bought that fancy lawn ornament and then got a nasty gram in the mail about how it is in violation and must be removed immediately. How would you feel? While I completely agree that the association board has a duty to enforce the governing documents, maybe there is a better way to bring in a sense of community along with such enforcement. Can we stop for just a minute to think about how we would view the association we just moved into or have lived in for some time after reading a violation letter received for that new beloved lawn ornament? What can we possibly do to ease the harsh punishment of a letter arriving in your mail and potentially making you feel that your community is a bunch of lunatics on a path to send letters for every little thing you do and love? 

    I would think that a reminder letter is a great way to begin. Rewording the letter to say “Hello fabulous owner in our loving association, we love your new lawn ornament, but unfortunately such a beauty is not currently allowed in your front yard. While we think it is a great purchase, the documents just don’t allow for it at this time. Maybe you can help us take a look at the documents to see if they need updating. If you are interested in helping us take a look at this, maybe, just maybe, we can allow such lawn décor to be placed in your front yard. They are likely in need of an update anyways and committee volunteers are certainly helpful in getting things as such updated.” WOW! Doesn’t that just come across so much better than “Dear Homeowner, you are in violation of our covenants and your lawn ornament must be immediately removed. If you do not remove it, you will be fined.” YIKES! I would not be too keen on my community if I got that verbiage instead. You see what I mean - the message has to come across differently, otherwise it just seems like harsh punishment as mentioned before. What a better community to live in if the message was a bit softer and more welcoming, right?

    Now I am not suggesting you go out and rewrite every violation letter; what I am saying is maybe we need to be a bit more kind in our message. Form templates are easy and make our work simple by using a standard template letter to send out to all those in violation from our compliance drive but think about the receiver and the tone you will get on the phone call or email received from them after. That gut feeling after one of those doesn’t feel great. A little time and effort to acknowledge their situation and the approach that “we could use your help,” could go a long way. Especially on a first notice.

    Another approach is reminders in your newsletters. I know most associations send out a monthly or quarterly newsletter (and if not, you should). This gives the owners a gentle reminder of the rules of the community. Think about a spring newsletter as we tend to see an increase in violations during the spring and into the summer months. The newsletter could be a great beginning to a better violation year by simply putting in reminders about those common violations we see, potentially reducing the number of violations we have to send out during this busy season. Remind them of items placed in their front yards and on their homes, to look at their homes to see if they may need paint, to maintain their lawns and oh boy those pesky weeds we so often have to send letters out on. Make the newsletter fun and inviting so people want to read it. Mention that these are things that the owner will want to do or to avoid if they don’t want to receive a compliance letter in the mail. I, for one, would read a well written and fun to look at newsletter and try to do whatever I can to avoid those nasty grams in the mail. A sense of community, that is what I think most owners want. Think about how we can bring this to all associations, making it a more peaceful place with less owners upset about how they cannot do certain things in and around their homes. Bring that sense of community to your association today!


    As a manager with 14 years in this industry, I think we need to be a little more caring in what we do, and how we approach things. We here at Westwind Management care so much about each other and I think that goes a long way in the job we perform and the love we have for it. 


  • 12/01/2021 6:05 AM | Bridget Sebern (Administrator)

    By Eric Lecky, SageWater

    Innovation is a curious thing.  It happens in fits and starts, leaps and bounds; it is sometimes evolutionary and sometimes revolutionary.  We see it daily, we experience it real-time - in our technology, in our society, and in our lives.

    In many ways, innovation is front and center. In other areas it goes almost unnoticed.  Take piping for instance: the concept of using a tubular vessel to carry water has been around since humans figured out how to make tubular vessels to carry water.  From clay to metal to plastic, the material may have evolved, but the very nature of plumbing remains unchanged, to move water from one place to another.

    So, what are the next innovations that will reshape the future of plumbing?  Is there any better way to actually carry water from one place to another?  Who knows, but as specialists focused on replacing aged and defective plumbing systems, we certainly see some obvious areas for improvement, and are approached every day by the “next big thing” in the industry.  

    But what if we aren’t thinking outside the box as much as we should, or further enough into the future.  What are the real possibilities?  Well, here are some theories:

    Current Technologies That Will Evolve Plumbing in the Next 5 to 20 Years

    Sensors

    From flow monitoring to remote controlled shut-off valves to water intrusion sensors, these technologies already exist, and it’s only a short matter of time before they become commonplace components of every piping system.  Reporting when water is moving too fast, too hot, with too much pressure, or is showing up where it doesn’t belong is easily achievable by installing various sensors in and around your piping system that can report such information.  As soon as you know a problem exists, the sensors can then be programmed to act on that information.  Water is too hot, automatically cool it down; flowing too fast, reduce the pump rates; leaking, shut it off.  Integrating computer technology and control systems into plumbing for both new construction and retrofits is a relatively easy task, and the costs are coming down every day.  We predict it will soon be ubiquitous.

    Materials

    There is an almost infinite array of plastic composites that are available to scientists and inventors today.  As research continues, advancements will be made and newer, better materials will continue to emerge in the marketplace, providing builders and homeowners with choices.  From better insulating options (temperature and sound) to improved connections to fittings, new materials will drive some level of innovation within current piping systems and new piping systems that have yet to be conceived will emerge.  Composites are even starting to appear with metal pipes, pre-lined at the factory with plastic resins to prevent corrosion, already available in the marketplace.

    System Design

    Environmental considerations are a chief driver in this area and looking at more energy efficient and environmentally friendly ways to heat and cool water, and to get it to flow (against gravity) with less energy, will continue to shape and influence how plumbing systems are designed and function.  Advances in centralization, decentralization, thermal conductivity and even material friction will all impact how systems are designed.  Is it better to have decentralized systems with shorter pipe runs, or centralized systems with longer runs but more friction resistant surfaces (e.g. hydrophobic coatings)?  Research, innovation, advanced modeling techniques and even artificial intelligence will all help answer these and other, far more complex, plumbing questions of the future.

    But that’s all relatively predictable.  The harder and more exciting question is what happens next?  What hypothetical improvements will impact plumbing in 100 years or more?

    As biology and technology continue on their march towards “The Singularity” (singularity.com), there is no doubt that new concepts in plumbing will emerge.  Think “smart” pipes that can sense corrosion and deploy an army of nanobots to perform an autonomous repair from inside the pipe.  Or “self-healing” pipes that can adjust their size and wall thickness based on temperature, pressure and velocity to better accommodate changes in behavioral use.  Need bigger, stronger pipes in the morning when everyone in a high-rise apartment building is showering and getting ready for work, but smaller, thinner pipes mid-day when usage is down?  Easy.  How about adaptive, organic pipes that can literally grow new branches to reroute around clogs?  Is it science fiction or could it really happen one day?

    Is there an eventual end to piping?  Who knows, but probably.  Could localized, high-speed “condensators” that quickly pull water out of thin air replace the need for pipes altogether?  Maybe?  How about rapid biodegrading evaporators that dissolve and consume waste and then gasify directly into the atmosphere, eliminating the need for drains?  Science fiction?  Probably.  Or will we look back, 1,000 years from now, and marvel at the true genius of basic tubular plumbing, still going strong even after a millennia of evolutionary changes, simply moving water from one place to another?

    Regardless of what plumbing innovations actually happen, there are three things we know are for sure:  

    1. Water is very important and truly essential to life;  

    2. Waste is bad and harmful if not handled properly (just read about the bubonic plague and plumbing issues during the dark ages;  and 

    3. Until the next big thing comes along, pipes will continue to be used in residential construction, they will continue to age after installation, and when they do get old and start to fail, they will continue to require replacement.  Until the future arrives, we all simply have to deal with that reality.

    Eric Lecky (elecky@sagewater.com) is an Executive Vice President at SageWater, North America’s leading pipe replacement contractor.  SageWater is headquartered in Alexandria, Virginia, with offices nationwide.  Over the past 30 years, they have replaced more than 35 million feet of pipe in over 100,000 occupied residential units.

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