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  • 02/01/2018 1:35 PM | CAI Rocky Mountain Chapter (Administrator)

    By Lindsay Smith, Winzenburg, Leff, Purvis & Payne LLP


    This article is written by an attorney, but is not intended to be legal advice. It is general in nature.  This article is intended to provide you with a broad understanding of the declaration amendment process and highlight some common problematic provisions so you can better discuss with community members, but it is not an in depth analysis.  Every situation differs, and you should consult with your association’s attorney before undertaking a declaration amendment.  


    The declaration creates the community.  C.R.S. § 38-33.3-103(13).  It is common for attorneys and developers to work closely together to ensure that the declaration that is created properly reflects the community that is created, but this doesn’t happen in every instance.  Sometimes, a declarant “saves money” by copying from another community’s declaration.  Other times, miscommunications between attorney and client result in a declaration that reflects what the attorney understood to be the declarant’s intent, which actually has nothing to do with the declarant’s intent.


    The difficulty in creating a declaration that properly governs a particular community can be exacerbated by the passage of time.  Communities created before the adoption of the Colorado Common Interest Ownership Act (“CCIOA”) are not required to have the same declaration provisions as communities formed on or after July 1, 1992.  These older declarations may have definitions that aren’t aligned with CCIOA, missing assessment and maintenance provisions, or provisions that are now contrary to public policy.  While many of these provisions are superseded by CCIOA, their presence in your declaration can make governance and management an expensive headache.  When your declaration does not allow the association to properly govern or function without constant legal opinions, you need an amendment.


    Common Problematic Provisions


    We see a lot of common problems in declarations.  Some provisions that may need to be amended out, either by a limited amendment or by an amended and restated declaration, follow.

    • Errors in allocated interests.  When a declarant annexes in properties by phase or at the time of conveyance, they often record a supplemental declaration that revises allocated interests to reflect the addition.  Sometimes these documents are recorded without appropriate legal oversight, and the allocated interests are not properly reallocated.  Other times, a phased development results in allocated interests that do not total 100% (or one) as required by CCIOA.  When this happens, the only option is a declaration amendment.
    • Incomplete definitions.  You will see declarations that treat certain words as defined terms, but never actually define the term.  
    • Unreasonable restraints on Board power.  Some Declarations prohibit all assessment increases, restrict Boards from adopting reasonable rules, and hamstring normal operations.  
    • Assessment ambiguities.  Some declarations and bylaws will both speak to assessments and collections, but their provisions (e.g., late fees, interest, due dates) will conflict.
    • Other assessment problems.  Assessment limits tied to the CPI and assessment caps can prevent an association from performing necessary maintenance.  
    • Obsolete or inappropriate provisions.  Some declarations contain provisions that are contrary to public policy, such as prohibitions on solar panels.  Very old declarations may even include provisions that directly violate the Federal Fair Housing Amendments Act.  These provisions are unenforceable, confusing, and can create strife in a community.
    • Ambiguous or missing maintenance provisions.  CCIOA specifies default maintenance if the declaration is silent on the issue, but this default doesn’t apply to pre-CCIOA communities.  Similarly, missing or ambiguous insurance provisions create coverage gaps.
    • Ambiguous unit boundaries.  When you can’t figure out whether the drywall is part of the condominium unit or part of the common elements, you will likely turn to legal counsel for an opinion.  While CCIOA defines unit boundaries in the event the declaration has failed to, that section also does not apply pre-CCIOA communities.  If your unit boundaries are ambiguous, you will have problems determining insurance and maintenance obligations.  
    • Insurance provisions.  Some declarations limit all insurance deductibles to $5,000.  These provisions are economically impossible when insurance companies charge wind and hail deductibles based on a percentage of the building’s value.  
    • Special assessments.  Documents that are silent on the power and process to levy special assessments hurt communities that have suffered unfunded losses, such as catastrophic hail damage.
    • Certified mailings.  Some declarations mandate certified or registered mailings for all but “non-routine” notices.  The declarations do not define a routine notice, leaving associations to wonder whether the reminder letters that go out to a third of the community are routine or non-routine.  Certified mailings are expensive, and do not benefit from any presumption that the letter reached its intended recipient.
    • Declarant provisions.  If your community is complete and the declarant is gone, the declarant provisions are obsolete.  While the presence of these provisions may not harm the community, they tend to make the declaration more confusing for the average homeowner.  Amend these provisions out, but make sure you have obtained any declarant consent you may require.
    • Construction defect provisions.  With the passage of HB 16-1279, many existing provisions intended to address construction defect lawsuits are presumably obsolete.  However much you may want to amend the declaration to remove such provisions, be aware that you may have to obtain declarant consent – even if the community is built out, special declarant rights have expired, and the declarant has been dead for thirty years.
    • Leasing restrictions.  Leasing restrictions are restrictions on the “alienation” of real property and need to be in the declaration.  If you want to limit short term rentals, set minimum lease terms, restrict the total number of units rented, or take other substantive actions that impact leasing, you need a declaration amendment.


    The Amendment Process


    CCIOA governs declaration amendments in section 38-33.3-217.  “Section 217” provides the process by which an amendment can be made, exceptions to that process, lender approval guidelines, and the judicial approval process.  Your legal counsel should review your existing declaration to ensure that any unusual amendment provisions are appropriately addressed.


    Section 217(1) creates the maximum threshold for most document amendments.  Declarations – especially for older communities – frequently require approval by members representing 75% or more of the community.  These provisions effectively precluded amendment in many communities, so the legislature took action in 2005 to amend the law.  Now under Section 217(1), any amendment percentage greater than 67% is declared void as contrary to public policy.  The amendment percentage can be as low as a simple majority of all votes in the association, but it cannot be higher – except when it is.


    Sections 217(4) and 217(4.5) allow for higher percentage thresholds for amendments that create or increase special declarant rights, increase the number of units, change the boundaries of any unit, change the allocated interests of any unit, or change the uses to which any unit is restricted.  Section 217(4) applies to pre-CCIOA communities; section 217(4.5), governing use restrictions, does not (don’t worry, it gets more complicated soon).  These types of amendments require a minimum of 67% of the votes in the association, but are governed by any higher percentage specified in the declaration.  Thus, a community could be forced to obtain unanimous consent for a change in how common expenses are allocated, if the original document required unanimous consent for such an amendment.  The community would have to obtain unanimous consent to decrease this amendment threshold for future amendments as well.


    If the association does not reach whatever percentage threshold is required by CCIOA and/or the declaration itself, all hope is not lost.  Section 217(7) sets forth a process by which an association can obtain judicial approval of an amendment where the failure to reach the voting threshold is due to non-response (as opposed to substantial opposition).  To ensure your community can proceed with judicial approval, make sure that you discuss the amendment at a meeting of the association, send out at least two notices of the amendment, and obtain at least half of the votes you would need to approve the amendment outright.  Consult with your association’s attorney to make sure the meeting notice is appropriate for the proposed amendment, as document amendments have been a favorite topic of the Colorado appellate courts in recent years.


    If you are proceeding with judicial approval, section 217(1) does not apply to the amendment.  Appellate courts have not clarified whether this inapplicability is simply recognition that the court is approving an amendment rather than the homeowners, or whether this inapplicability means that the 67% threshold established by that section is ignored when calculating whether you obtained at least half of the votes you would need to approve the amendment outright.  The cautious approach is to proceed under section 217(7) with whatever higher percentage is contained in the Declaration.


    In addition, courts are not entitled to approve amendments that change the allocated interests, except to the extent that they change the portion of the allocated interests that is the common expense liability.  You cannot obtain judicial approval of an amendment that changes the ownership interests in the common elements in a condominium, or the votes in the association in any community.


    Conclusion


    Declaration amendments, contrary to a statement made to me by an owner at a document amendment meeting, are not easy.  You need to engage with legal counsel early to determine the appropriateness and viability of an amendment and create a roadmap to get from where you are to where you need to be.  Do not try a declaration amendment on your own, but don’t be afraid of the hard work associated with an amendment.  They may take years in some circumstances, but the benefit to the community is long term.


    Lindsay Smith is a community association attorney with Winzenburg, Leff, Purvis & Payne LLP.  Her practice focuses on general community association matters such as document amendments, governance, and document interpretation.

  • 02/01/2018 1:32 PM | CAI Rocky Mountain Chapter (Administrator)

    By Lindsay Smith, Winzenburg, Leff, Purvis & Payne LLP

    As general counsel to community associations throughout Colorado, my job is, first and foremost, to provide legal guidance to the Boards of Directors who represent and act on behalf of my clients.  Often, my clients have their managers act as my main point of contact.  This can increase efficiency and decrease unnecessary legal fees, but can create conflicts when the managers take actions they shouldn’t be taking – or fail to take actions they should take.  This article addresses common errors that I see from the general counsel perspective, and offers tips intended to protect both my clients, and their managers, from conflict and liability.

    Managers as Agents

    Community association managers often walk a fine line between encouraging Board action and taking action for a Board.  When a Board is non-responsive and time is of the essence, a manager may take action for the Board, knowing that the Board will agree to that action at a later date.

    Don’t do that.  

    A community association manager is typically an agent of the corporation.  As a corporate agent, the manager will have broad authority to entertain negotiations with third parties, and often has “apparent authority” to bind the corporation to a contract or other course of action.  

    Sometimes, a community association manager will exercise his or her apparent authority in an inappropriate context.  For example, the manager will select a contractor rather than wait for the Board to vet bids, or will approve a payment proposal offered by a delinquent owner.  When a community association manager steps into the Board’s shoes without legal authority to do so, third parties who rely on the manager’s actions are usually permitted to enforce the agreement made by the manager.  While the third party will be entitled to the benefit of the bargain made, the manager might not be as fortunate.  Because the manager has taken action on behalf of the corporation without legal authority, the manager may face personal liability from the corporation for the contract.  Put simply, if a manager contracts for an association without legal authority, the manager might have to pay for whatever was in that contract.

    This is a general statement and will necessarily be impacted by the language of a management agreement.  While all contracts differ, it is crucial to recognize the scope of management authority and to avoid making assumptions regarding a Board’s potential decision.  Additionally, Colorado law requires that certain decisions only be made by the Board (e,g. foreclosure). Make sure that you know what you are permitted to do on behalf of your client, and what you are not permitted to do.  When in doubt, ask, and get it in writing.  

    Managers as the Board

    A community’s governing documents will often permit the association to charge a negligent or improperly-acting homeowner with the costs associated with that owner’s bad acts.  Communities subject to the Colorado Common Interest Ownership Act can assess unit owners for common expenses caused by their misconduct without additional authorization in the Declaration.

    These provisions beg the questions – what is negligence?  What is misconduct?  And should the manager be the person who makes that determination?

    Negligence is the failure to act in accordance with a legal duty, in a manner that causes harm to another person.  The legal duty, in the community association context, may be a failure to maintain the interior of a condominium unit, a failure to report damages caused by exterior sources, or a similar failure to act as a reasonable person would in a similar situation.  Misconduct is more affirmative in nature, and would include deliberate harm to common elements or gross negligence, such as drunkenly destroying a railing or cutting down a tree.

    In light of these definitions, when a Board needs to determine whether a homeowner’s negligence or misconduct has caused $25,000.00 in damages to the common elements, a manager should step back and make sure that whatever determination is made, it is made by the Board.  In the event the homeowner challenges the determination that he or she is responsible for the damage to the common elements, and the challenge rises to the level of a lawsuit, the manager and the association will almost certainly find themselves with a conflict.  To avoid this, and preserve your client relationships, stay in your lane and make sure your Boards are making the fact-based decisions.  

    Managers as Psychic

    Your clients may rely on you more than you know.  If your management agreement provides that you are the association’s agent, you might have more responsibility than even you know!  A recent case out of Texas held a property management company jointly and severally liable with the community association for failure to make repairs to a retaining wall as recommended by a reserve study.  The court found that the management company’s contract imposed upon it duties to maintain the common elements.  While the association did not expressly delegate the obligation to maintain the common elements to the management company, the management company assumed a duty to properly maintain the common elements by making this obligation part of the contract.

    The court found that the management company and the association were liable for the failure to repair common elements, even after the membership refused to approve a special assessment intended to fund the repairs.

    Additionally, a recent case out of Maryland held that owners had a negligence claim against the board for failure to properly bring a construction defect lawsuit against the developer in a timely manner. While the case did not address the manager’s liability, there could be liability based on a contract with the association. When managing relatively young communities, carefully consider whether there are defects in the developer’s construction, and consult with professionals (and the Board) to protect yourself, and your communities.

    The lessons in these cases are twofold: managers need to carefully consider the content of management agreements, and associations need to be diligent and proactive in investigating repairs for possible construction defects as well as funding repairs and associated reserves.

    Conclusion

    While not all liability can be avoided, it can be mitigated – for both the manager and the association – by ensuring that all parties are on the same page with respect to what actions are appropriately handled by management, and what actions are not to be delegated by the Board.  


    Lindsay Smith is a community association attorney with Winzenburg, Leff, Purvis & Payne LLP.  Her practice focuses on general community association matters such as document amendments, governance, and document interpretation.

  • 02/01/2018 1:29 PM | CAI Rocky Mountain Chapter (Administrator)

    By Melissa M. Garcia, Esq., HindmanSanchez, P.C.

    In simplest terms, to be a fiduciary to another person or party is to be in a position of trust. For example, a patient trusts her doctor to make the correct diagnosis.  A parishioner trusts his priest to keep his confessions confidential.  And if you are my client I hope you will trust me, as your lawyer, to give you the correct advice!

    How does being a fiduciary play into the setting of a community association? Again, a fiduciary relationship exists where people place a special trust in someone.  In the association context, this means that if you are elected to the board of directors, the homeowners have placed their trust in you to preserve and protect the association’s assets, maintain the association’s property, enforce the association’s covenants, and, in general, to promote the interests of the common interest community.

    If you are a member of the board of directors then you owe a fiduciary duty to the association.  On the whole, your fiduciary obligation encompasses the following four duties, each of which is discussed below:

    1. Duty of Care
    2. Duty of Loyalty
    3. Duty of Obedience
    4. Duty of Confidentiality

    Duty of Care

    The duty of care requires a board member to make decisions: (i) in good faith, (ii) in the best interests of the association and (iii) prudently. The foregoing standard is what courts will review when determining if a board member(s) acted appropriately when a decision is challenged.  Directors are recognized as having the same duties as those of a business operation, so they must give the business of the association the same degree of care and diligence that prudent persons would exercise in their own affairs in similar circumstances.  So what does this mean?  

    First, to act in good faith means, quite simply, act with honesty, fairness and good intentions.  When taking action, do not act with deception; do not act maliciously; do not act with ill will.  Sounds easy enough, but sometimes this can be one of the most difficult rules to follow.  As a board member have you ever been faced with a person who repeatedly interrupts you during meetings, constantly challenges your decisions and seems to look for ways to personally attack you?  Then, all of a sudden, that same person asks you to approve his or her fence request. And you find yourself looking for a way to deny it?  That, my friends, is acting in bad faith. Always remember that as a board member you have to look at every decision objectively, and act with honesty and fairness. 

    Second, to act in the best interest of the association means set aside your self-interest.  Even if you may be a homeowner, while on the board you must remove your homeowner hat and put on your board member hat. If moving forward with a particular action would be in the best interest of the association, you must cast your vote in favor of that action, even though it may not align with your own personal interests.  

    That being said, it’s not uncommon for a board decision to also support your own individual interest as a homeowner. That doesn’t mean the decision is incorrect or inappropriate, it just means your own self-interest is in line with that of the association.  However, as a director your decisions will be scrutinized, and if there is any appearance of preferential board treatment, the decision may be challenged. Do what’s necessary to avoid the perception that your action is solely in your best interest. Make sure you document how you made your decision objectively and without preference. 

    And remember, your decision must be in the best interest of the association; not the best interest of another board member, not the best interest of the kindest person on the block; not the best interest of the most energetic and dynamic faction of the community.  Any of the foregoing categories of people have the potential to sway, intentionally or unintentionally, a director’s decision because of who they are as individuals, and because of a director’s natural inclination to help the nicest group or the one in the most need.  Do not review a proposal based on which homeowners will benefit of the decision. Review a proposal based on whether it benefits the association and is in the association’s best interest.

    Third and lastly, make sure your decision is prudent.  This means ask a lot of questions so you can make an informed decision.  Read, be familiar with, and follow your governing documents and applicable law. Make sure you attend board meetings.  Review your board packet thoroughly before the meeting, so you can be ready to ask questions at the meeting. Study and understand your financial statements, so you know where the money is going. Hire qualified professionals and vendors.  In short, when making any decision, board members need to be sure they exercise sound judgment. 

    Making an informed and sound decision is particularly critical if the decision has a significant impact on the association and its members.  If, for example, your decision has a substantial financial impact on the homeowners, such as levying a special assessment or obtaining a loan, then make sure you do your due diligence.  Review your governing documents and determine whether you have authority to levy the special assessment. Ask your managing agent for assistance in reviewing the operating and reserve accounts and in understanding the present financial state of the association. Ask your attorney for a legal opinion on whether owner approval is necessary for obtaining a loan and pledging the income of the association as security.  

    And, paper trail, paper trail, paper trail.  Make sure the association’s files contain documentation establishing that the board’s decision was made in good faith, prudently and in the best interest of the association.  You can document your decision-making process through minutes, committee reports, opinion letters, memos and other such records.  

    Duty of Loyalty

    The duty of loyalty requires a director to be loyal to the corporate entity of the association.  Again, you need to set aside your self-interest in order to act in the best interest of the association.  The duty of loyalty primarily relates to conflicts of interest. 

    A conflict of interest exists whenever any contract, transaction or other action taken by or on behalf of the association would financially benefit: (1) a director or (2) a party related to a director.  A “party related to a director” means: 

    1. a parent, grandparent, spouse, child, or sibling of the director;
    2. the spouse or descendent of the director’s sibling; 
    3. an estate or trust in which the director or party related to the director has a beneficial interest; or 
    4. an entity in which a director is a director or officer or has a financial interest. 

    A common example is if a director owns a landscaping company and wants to enter into a contract with the association to provide landscaping services.  This potential contract would provide a financial benefit to the director.  Thus, a direct conflict of interest exists.  Or, if the landscaping company was owned by the director’s sister, a similar but indirect conflict of interest arises.  The existence of this conflict does not make the contract illegal or inappropriate in itself.  It is the way the director proceeds with respect to the conflict that determines the correctness of the transaction.

    Colorado law requires the director to disclose the facts of the conflict to the remaining directors before the board takes action on the proposed transaction.  The transaction is enforceable if a majority of the disinterested directors, even if less than a quorum, in good faith, approves the transaction.  And although not legally required, the director may consider it prudent to be absent from that part of the meeting during which the matter will be discussed, except when her or his information may be needed.  

    Note that even though the law does not require the director with the conflict to recuse him or herself from the discussion or vote, the board may adopt a conflict of interest policy which requires such recusal.  

    Colorado law requires the board to adopt a policy which: 

    1. defines or describes the circumstances under which a conflict of interest exists;
    2. sets forth procedures to follow when a conflict of interest exists, including how, and to whom, the conflict of interest must be disclosed and whether a director must recuse himself or herself from discussing or voting on the issue; and 
    3. provides for a period of review of the conflict of interest policies, procedures, and rules and regulations.

    So, if the policy requires the director to refrain from participating in the discussion and from voting, the director must follow the policy.  The minutes should then reflect his or her absence from discussion and abstention from any vote relating to the subject of the conflict.

    Duty of Obedience

    The duty of obedience is an easy one: obey the governing documents and obey the laws.  Directors owe a duty to the association to perform their duties in accordance with the authority granted to them by statute and in their governing documents (i.e., the declaration, bylaws, articles of incorporation, and any rules, regulations and policies adopted by the board).  If directors exceed this authority, and damage results, the directors may be personally liable for their unauthorized actions.  

    However, your obedience is only as good as the rules you follow.  If your governing documents are outdated, then you could be following illegal provisions.  Make sure to review your governing documents with your attorney, and revise or rewrite them to bring them into compliance with current applicable law.

    Duty of Confidentiality 

    Board members will have access to private and confidential information that must remain confidential.  A director should not individually disclose information about the association’s activities unless they are already known by the members or are part of the association’s records.  In the normal course of business, a director should treat all matters involving the association as confidential until there has been general disclosure, such as at a board meeting (outside of executive session) or an owners meeting, or unless the information is part of the records available to members for inspection (i.e., minutes, resolutions, etc.) or common knowledge. This presumption of confidential treatment should apply to all current information about legitimate board or association activities.   

    To be effective, a community association needs a strong board of directors that comprehends its role entirely and pursues it effectively. And to be an effective board member, you must fully understand your fiduciary duties and responsibilitiesas outlined above.  

  • 02/01/2018 1:27 PM | CAI Rocky Mountain Chapter (Administrator)

    By Jonah Hunt, Orten, Cavanagh & Holmes, LLC

    Many associations are struggling with the decision regarding whether or not to regulate short term rentals in their community.  Short-term rentals are generally defined as rentals which are 30 days or less in duration.

    With the rise of companies such as VRBO, HomeAway and Airbnb, vacation rentals have soared, with the short-term rental market in the U.S. expected to exceed $36 billion in 2018. Short-term rentals are growing at nearly twice the rate of the traditional tourism lodging market, climbing 11 percent in 2016.  It is fair to say that short-term rentals are here to stay.

    To Regulate or Not

    Positive impacts of short-term leasing include that with increased visitors and tourists comes increased visibility and dollars spent in the community.  Many owners who rent their units on a short-term basis do so primarily or solely for the income, which keep them solvent and lessen the probability of foreclosures in the community.  

    Opponents of short-terms rentals argue that their inherent nature is not harmonious with community associations, which emphasizes bringing people together, strengthening neighborhood bonds and promoting a sense of community.  In contrast, short-term visitors with no ties to the community may not be contractually bound to the association's governing documents nor financially invested in the overall good of the community. Similar concerns include the change in character from a residential community to a transient one, increased noise, trash, and parking problems.  Security and maintenance issues are also concerns for associations.

    Regulation and Case Law

    While some associations have covenants which address short-term rentals, most associations who choose to regulate do so through their rules and regulations. Colorado’s Common Interest Ownership Act specifically confers upon associations the right to “(a)dopt and amend… rules and regulations.” C.R.S. § 38-33.3- 302(1)(a).  Rules must also not conflict with the association’s governing documents.  See Pagosa Lakes Property Owners Assoc. v. Caywood, 973 P.2d 698 (Colo. App. 1996), cert. denied.

    Rules are typically enacted because owners who rent on their own are receiving association benefits while not paying a commission or fee to the association or its rental management program. Typically, there is also added impact on the physical components in the community.  In Watts v. Oak Shores Community Assn., 235 Cal. App. 4th 466 (2015), the Court ruled in favor of an association which had adopted rules and implemented fees to address the negative impact short-term renters were having on the community.

    The Colorado Court of Appeals has held that in order for short-term vacation rentals to be prohibited, “the covenants themselves must be amended … the board’s attempt to accomplish such amendment through its administrative procedures was unenforceable.” Houston v. Wilson Mesa Ranch Homeowners Association, Inc., 360 P.3d 255 (Colo. App. 2015).  Houston also found that short-term rentals are not a commercial use of property.  This is not necessarily the law elsewhere.  See Eager v. Peasley, et. al., published opinion of the Michigan Court of Appeals, issued November 30, 2017 (Docket No. 336460) (holding that short-term rentals violate “residential use” and “non-commercial use” restrictions contained in restrictive covenants).

    In Colorado, if an association is seeking to ban short-term rentals, it must do so through a covenant amendment.  If an association is merely seeking to regulate such rentals, it may do so through rules and regulations, provided such rules are not arbitrary, capricious, unduly burdensome, or discriminatory.

    Conclusion

    Associations should work proactively with owners looking to rent on a short-term basis to ensure all owners are adhering to the same regulations, in ways that work best for the community.  The Association should poll the community on the issue and have meetings and discussions to address owner concerns and needs.  From there, the association can make the determination if it is appropriate to amend the covenants, or if there are appropriate rules or policies that can be adopted to address the issues.

    Jonah G. Hunt

    Community Association Attorney

    Orten, Cavanagh & Holmes, LLC

    Orten Cavanagh & Holmes advocates a proactive approach in providing legal representation to community associations throughout Colorado.  The firm provides communities and associations with timely, value-oriented legal services.

  • 12/01/2017 4:22 PM | CAI Rocky Mountain Chapter (Administrator)

    By Jeffrey B. Smith, HindmanSanchez P.C.

    Often times there is confusion as to who is responsible for the upkeep and maintenance of the association and the costs associated with damages in an association. It is easy to misunderstand what maintenance responsibilities are those of the owner, and which responsibilities are those of the association. 

    Pursuant to Section 307(1) of the Colorado Common Interest Ownership Act (“CCIOA”) it is the association’s responsibility to maintain common elements (including general and limited common elements) and it is owners’ duty to maintain their units in the absence of a statement to the contrary in the declaration.  Additionally this same provision authorizes associations and their agents to enter units for the purpose of providing such maintenance.

    If your association was created after July 1, 1992, and the governing documents are silent on the issue, Section 307(1) of CCIOA comes into the picture setting forth default maintenance obligations for both associations and owners.  Specifically, Section 307(1) provides that absent a contrary requirement in the declaration, owners are responsible for the maintenance, repair, and replacement of their units and everything inside their units.

    Section 307(1) also requires associations to maintain, repair, and replace common elements in a community.  The definition of “common elements” in CCIOA includes both general and limited common elements.  So absent a contrary requirement in the declaration, post-CCIOA associations must maintain, repair, and replace all general and limited common elements in their communities.

    In the case of many condominium communities, access to certain common elements is only possible by entering a unit.  In those situations, Section 307(1) requires owners to allow associations and their agents to access units if such access is “reasonably necessary” for the purpose of maintaining, repairing, or replacing common elements.  Therefore, if a community was created after CCIOA and the declaration is silent concerning access to units, the association can still utilize Section 307(1) of CCIOA as legal authority for gaining access to units for the purposes stated above.

    But associations should be careful as any damage caused by an association, or its agents, to a unit while maintaining, repairing, or replacing common elements accessible through such unit, will be the obligation of the association to repair.  By the same token, any common element damaged by an owner while maintaining his/her unit must be repaired by such owner at his/her expense.

    Owners are generally responsible for maintaining anything within the unit boundaries. However, every set of covenants includes different language and allocations.  One should always review the Declaration to determine who has the maintenance responsibility for certain items within their own association. Sometimes, if an owner or an association acts negligently through the course of its maintenance obligations, such party may be responsible for damage caused outside of their maintenance responsibilities.  The example below will show why it is not always easy for an owner or an association to determine who is liable for damages within an association.

    Take the example of a pipe within a unit that serves only that unit (call it Unit A).  This pipe freezes, breaks, leaks and causes water damage to Unit B and/or common elements.  Per the declaration, the owner is responsible for the maintenance of the pipe, so the owner of Unit A bears the expense for repairing the pipe within Unit A and any damage to property within Unit A.  Nevertheless, that does not mean the owner of Unit A must pay to repair or restore damaged property in Unit B and/or the common elements unless the declaration for the condominium association assigns that liability to the owner of Unit A or, absent that, unless the owner of Unit A was negligent.  

    The law provides that the occurrence of an accident does not raise any presumption of negligence on the part of either party.  An unforeseeable failure of a pipe or connection is not sufficient to support a finding of negligence.  Therefore, following the example above, the condominium association would be responsible for any repairs to common elements for which it had the maintenance obligation, and the owner of Unit B would be responsible for the repair and restoration of any property in Unit B for which that owner had a maintenance obligation, even though the damage originated from Unit A.  Thus, maintenance cost tracks or follows the maintenance responsibility in the absence of negligence.

    On the other hand, if there were signs or warnings of an approaching break (such as the owner of Unit A knowing the weather was going to turn cold and leaving the unit unheated), the conclusion may be different.  

    If there is ever a question as to who has the maintenance and repair responsibility within an association, you should contact legal counsel immediately for a thorough review of the governing documents to help prevent additional damages

    Jeffrey B. Smith is an associate at the law firm of HindmanSanchez P.C. where his practice focuses on covenant enforcement and litigation matters for homeowners associations.  Jeff may be reached at (303) 991-2066 or jsmith@hindmansanchez.com.

  • 12/01/2017 4:20 PM | CAI Rocky Mountain Chapter (Administrator)

    By Will Denning, Palace Restoration

    DENVER, CO – For many, deep cleaning their carpet is often a response to a spill or an ornery pet. While this can restore the appearance of a room, it may not have much of an impact on the longevity of the carpet itself.

    Let’s face it – carpeting for a house is a major expense. It’s an even bigger one for an entire managed community. Unfortunately, most don’t realize that the expense of a carpet doesn’t disappear when the installer leaves. If neglected or cared for improperly, this expense can quickly end up on the shoulders of the property manager, even just a few years after construction is complete. However, if regularly cleaned and vacuumed, it is not unrealistic to expect carpet to last for 10-15 years.

    Vacuuming regularly is the easiest way for property managers and tenants to preserve the life of their carpet. As dirt and dust build up on carpet fibers, they attract even more dirt and dust. Pretty soon, you are walking on a breeding ground for bacteria and allergens. Now consider the kids and pets who come into close contact with this carpet daily and you’re got a recipe for stuffy noses, breathing problems or worse.

    Of course, you can have your maintenance team rent carpet cleaning equipment to improve the look of the carpet but the consumer-grade equipment and cleaning products this process uses will come up short on invigorating the carpet fibers themselves. Regular, professional carpet cleaning can not only remove dirt and stains but the high grade cleaning products the pros have access to will eradicate bacteria and restore the structure of the fibers themselves.

    The result is not only a clean-looking carpet, but one that will be devoid of germs and just as soft as the day it was installed.

    Be forewarned, however. Not all cleaning services maintain professional credentials that ensure their ability to identify all the different carpet fibers and the proper cleaning methods for each of them. The Institute of Inspection, Cleaning and Restoration Certification (IICRC) is the official body for certifying restoration contractors in everything from carpet cleaning to mold and smoke remediation. Be diligent when seeking out a contractor that retains certifications for their firms and technicians that require training on all current regulations, cleaning methods, and carpet types.

    While the cost of professional carpet cleaning may at first seem like a lot to swallow, consider the cost of replacing that same carpet every five years. Now multiply that by however many buildings are in your community.

    Protecting your carpet investment is not just the bottom line. Clean, healthy carpet is an investment in a clean, healthy community for kids, pets, and everyone else.

  • 12/01/2017 4:18 PM | CAI Rocky Mountain Chapter (Administrator)

    By Gary Heslington, TRA Snow and Sun

    Are you tired of dealing with damage caused by ice dams and icicles?  Are you frustrated with having to fix roof penetrations each spring that are damaged or broken off during the winter?  Does the thought of repairing or replacing one more rain gutter make you lose sleep at night?  Then you need to finish reading this article.  

    For many, dealing with such problems has just become one of those annoying issues you are forced to deal with each year.  But what if you didn’t have to deal with it?  What if there was a permanent way to avoid these issues each year?   Well there is a solution!

    It is called “Snow Retention Systems”.  That’s right – put a system on the roof that will hold snow and ice in place and keep it from sliding or moving.  Sounds a bit crazy at first, doesn’t it?  We always think we need to get that snow off the roof – not keep it on.  But think about it for a minute.  The problems we just talked about are all the result of snow and ice moving instead of staying put.

    So, is this the trendy, new “fidget spinner” of the roofing industry?  No way!  In fact, snow retention has been around for centuries.  For some reason, the pendulum just swung away from it for a while here in the Western United States, but many architects and building designers are now utilizing it in their designs, especially in areas with heavy annual snow fall.  But there are a lot of buildings out there that should have it but don’t.   

    I know what you’re thinking right now.  This sort of makes sense but are the roofs I deal with really going to hold all that snow?  Especially those years with really heavy snow fall?  Yes, they will, at least in most cases.  Due to updated building codes, almost all buildings constructed since 1975 were designed to be able to hold all that snow on the roof.  Good to know, isn’t it?

    Now let’s discuss some issues related to snow and ice moving or sliding off roofs that you may not have considered.  To begin, go to this short YouTube video.  You will love it.  It will introduce you to a new concept – Roof-alanches:  https://www.youtube.com/watch?v=rstKvsXSjzI

    Pretty cool isn’t it?  Could you feel the power of all that snow cascading off those roofs?  Unfortunately, it isn’t too uncommon for people to be trapped and even killed in such occurrences.  When it does happen, insurance companies like to consider it an Act of God.  But is it really?  Especially when it is completely avoidable?  What a great reason to utilize snow retention!!  Use it to save lives and avoid the liabilities that, unfortunately, always follow.

    Snow and ice cascading off roofs can also result in severe property damage such as crushing cars and A/C units.  It also regularly tears off gutters, balconies and patio railings. 

    But snow and ice doesn’t have to come off in dramatic Roof-alanches to cause damage.  Sometimes it only slides from one part of the roof onto another.  For example, snow can slide from the main portion of the roof to a dormer.  When the sliding snow hits the dormer, it will many times stop, but the force of the moving snow will often cause severe damage to the dormer.  Sometimes you have no idea what caused the damage once the snow and ice has melted and the damage is visible.  With asphalt shingles, we often see an even more subtle type of damage.  Ice only has to move a very short distance to damage these shingles once the ice has frozen to the granules on the surface.  The ice pulls the granules free and then they are washed away when the ice melts.  The result is premature aging of the roof. 

    I think you get the idea.  So how do you find out more about utilizing snow retention systems?  Simply contact a snow retention company and ask about a free engineered layout and estimate.  It is an easy, no cost way, to get started.  So, don’t’ delay!  Protect your properties with engineered “Snow Retention Systems” and start sleeping better at night.

    Gary Heslington has been working for TRA Snow and Sun for nearly two years as their Business Development Manager.  TRA Snow and Sun is a pioneer in modern, fully engineered, snow retention systems and are leading out in establishing codes and standards in the snow retention industry.  For more information go to www.trasnowandsun.com.

  • 12/01/2017 4:17 PM | CAI Rocky Mountain Chapter (Administrator)

    By David A. Firmin, Esq, HindmanSanchez P.C.

    Winter in a community association can be beautiful, serene, and of course wrought with perils from freezing pipes to slip and falls. In addition to the pipes and snow, the association also must consider the pressures of its budgets. Associations will look to trim snow removal costs in order to balance budgets by increasing the inches of snow that falls prior to calling for snow removal. These strategies, while well intentioned, may cause more problems than they are worth. 

    Associations have legal responsibilities under the governing documents and through established common law to take sufficient steps to exercise reasonable care to protect against dangers of which the association knows or should know upon reasonable inquiry. With this standard in mind, the association can take several steps to mitigate risks and avoid potential pitfalls that come with the winter months. 

    Education

    As with all factors, education of both the owners and the board can go a long way. Prior to the first freeze of the season, the association should discuss the winter issues, including the importance of keeping a minimum level of heat in the units. Additionally, keeping cabinet doors open at night can assist in the air flow in the unit allowing warm air to keep pipes from freezing. 

    The board should also take time to walk the property with its elected snow removal contractor. Point out to the contractor problem areas that tend to collect ice along with where the snow storage areas will be located. The board should also point out those areas that may need extra attention, which can be given while the contractor is there during the first snow push allowing for proactive snow removal. 

    These problem areas can also be pointed out to the owners and residents within the community. This will assist residents in avoiding these problems areas. 

    Be Proactive 

    When dealing with snow removal issues, the association should look for ways to address the issues prior to their becoming a problem. Proactive ideas for winter issues include email blasts to owners prior to freeze and snow events reminding owners to turn up heating, opening cabinet doors, and if needed moving cars to allow efficient snow removal.  The association may also consider placing ice melt or sand stations in problem areas (identified in the snow walk).  

    Encourage owners to promptly report problem areas as soon as they are known. The association can then take steps to mitigate these issues.  

    In the Event of a Lawsuit…Don’t Panic

    Of course, even the most prepared and diligent association can run into trouble. In order to ensure that the association is in the best possible position to defend a suit, the association should establish and follow policies and procedures for regular inspections, snow and ice removal, supervision of vendors, and posting warnings. If the association is notified of a slip and fall, the association should investigate the alleged area of the fall. Photographs of the condition of the area should be taken and maintenance logs preserved.  

    Finally, risks can be shifted and insured through appropriate insurance coverages for the association, and through indemnity provisions in contracts with vendors and warnings. Associations should team with their insurance professionals as well as legal counsel to ensure coverages are sufficient to withstand these perils. In addition to the association’s master policy, the association should encourage its owners to revisit their personal policies. Make sure the owners and tenants have sufficient coverage for their personal property along with items not covered by the association’s policy. 

    If the association takes the appropriate steps, “Winter is Coming” will not strike the association with fear of slips, falls, broken pipes and lawsuits (or dragons), but rather good tidings and cheer.

    David Firmin is the Managing Partner at HindmanSanchez P.C. in Lakewood, CO. HindmanSanchez is a HOA law firm serving the Denver Metro area, Northern and Southern Colorado, and the mountain communities.

  • 12/01/2017 4:15 PM | CAI Rocky Mountain Chapter (Administrator)

    By Evelyn Saavedra, CMCA

    Q: Explain the differences in maintenance between high rises and single-family homes?

    A: Maintenance is important for all homes; however, what you do, or don’t do, in a high rise can leave your neighbors at risk.

    In single family homes changes to the interior of a home typically don’t impact neighbors.  Residents transitioning from single family homes to condos have a lot more to consider when modifying their unit. For example, the underlayment for flooring used in single-family homes might not be neighbor friendly in a high-rise environment, depending on its STC/IIC ratings. What is STC/IIC? STC (Sound Transmission Class) is a rating for how well the underlayment reduces airborne sound such as music. IIC (Impact Insulation Class) is the rating for how well the underlayment reduces impact sounds such as someone walking.  Some high rises restrict hard surface flooring like hardwood altogether eliminating any worry about this; however, with proper ratings and installation hard surface flooring can be installed with minimal impact.  

    Maintenance of appliances and the unit itself is also important. A simple item can easily impact other units. Think about where the water from a leaking refrigerator hose could travel to. No one wants to be in the unit below that is “rained” on. Yikes!  


    Q: What are some key factors to consider for high rise maintenance?

    A: One of the most important factors is figuring out a way to prioritize and track historical issues. Life and safety equipment should always be the top priority, and providing utility services to units is secondary. Why are historical issues important? If a manager starts to see trends, it may point to bigger issues.

    In one of the buildings I managed, I noticed multiple complaints about the smell of marijuana coming from another unit. After looking at the locations of the complaints on various floors, we noticed there was one thing in common, they all were on the same exhaust stack. After conducting a simple airflow test on multiple bathroom exhausts, it was clear this was the path transferring the smell. We then discovered that the shaft was never fully completed, and the large section that was missing was causing the smells to be transferred to other units.    


    Q: What is a BMS System and why is important for a high rise?

    A: BMS stands for Building Management System also known as Building Automation System (BAS), which is a computer based system used to control and monitor a building’s mechanical and electrical equipment. With proper forethought and setup, this type of system can be used to identify issues before the residents experience the outcome of the issue.

    For example, installing a sensor on the water temperature output of a chiller that has an alarm set to sound if the water temperature reaches a certain point, gives managers an indication that there might be an imminent loss of air conditioning. This allows managers to get ahead of the problem and fix the issue before the residents are impacted.  


    Q: What can residents do to help with the building maintenance?

    A: While many people buy in high rises looking for a lock and leave situation, there are important things that need taken care of within each unit. First, don’t delay on repairing a running toilet or leaking faucet.

    It is also important to think about what is put down sewer lines and garbage disposals. It is shocking to hear about the things that plumbers pull out of sewer lines throughout the city. The garbage disposal is intended to grind down table scraps from your plate, with some small exceptions, not to be used as an in-sink trash can. As for pasta and rice? No way! Those items expand and swell, causing unnecessary clogs. Grease from a cooking pan also is not good for drains. It will solidify and act as a glue and plug with other items in the sewer lines. Things like this can lead to a sewer backup and, if not caught early enough, cause a lot of damage to everything around. Be kind, and remember in a high rise the sewer lines open to all of the units throughout the building.  


    Remember, in a high rise everyone has different perspectives on maintenance and what is important. Most owners and residents want to be able to have a simpler life, and no longer worry about snow removal, landscaping and many of the maintenance items to that come into play with a single-family home. On the other hand, the manager and staff must be concerned with these items to ensure a correctly working building. However, maintenance awareness from both managers and residents leads to an improved high-rise experience for everyone.


    Evelyn Saavedra is the Community Association Manager for the Residences at Penterra Plaza, a community managed by Hammersmith Management, Inc. Hammersmith Management provides a full range of management services for condominiums, single family homes, townhouse, high-rises and large-scale properties in Colorado.

  • 12/01/2017 4:11 PM | CAI Rocky Mountain Chapter (Administrator)

    By Nicole Stone, LMI Landscapes Inc.

    Snow removal may sound simple, however finding a contractor to meet your needs can be more challenging than expected. To understand snow removal you must first know your property’s needs, the capacity of your snow removal contractor, and the art of communicating your snow removal needs to your contractor.  Finding a balance of the above is critical for the success of your snow removal. 

    In order to set the stage for success, one must first determine the needs of your property. What are the expectations of the community, what are the trigger depths, what services do you want to have done, and do you have time sensitive needs? When determining your needs, budgets should also be taken into consideration.  When you have a clear picture of the expectations of the community, talk to your contractor relay the information so they can also understand what you are looking for. These expectations will help determine what type and the amount of equipment needed. Create a property map that shows where you would like to have the snow piled, where are your critical points, and any other detailed items that your contractor may need. 

    Once the needs have been established, the next step is to search for the right contractor to meet those needs. Finding a snow removal service might sound like a simple task, however this might be the most difficult task of all. Here are some guidelines to assist when searching for a snow removal contractor:

    • Are they a reputable company?
    • Do they have insurance? 
    • What services do they provide? 
    • What are their rates? 
    • How do they track the hours on the property?

     Snow storms do not operate under regular scheduled hours, so many storms take place throughout the evening when you’re fast asleep. This is when knowing your contractor’s reputation becomes crucial.

    After the storm has passed, walk with your contractor see what was done well and look at what could be done better or more efficiently on future storms. These walks are critical at the beginning of the snow season.  If this is your contractor’s first storm, understand that changes might be necessary moving forward. While a plan might be in place, many obstacles could change the direction of that plan. Having a plan to start with is important, understanding that it might change is just as imperative. 

    Remember, this is not a game of the Price is Right. This is finding the right contractor who can handle your community needs along with the ability to perform the services requested. Providing a clear picture to your contractor of your needs will help result in a successful snow removal season for all parties involved. This sets the stage for the art of snow removal. 

    LMI Landscapes Inc. has been successfully servicing the green industry in Dallas, Austin, and Denver since 1987. We are comprised of three divisions; Construction and Irrigation Installation, Maintenance, Enhancements, and Irrigation, and Snow Removal Services. 

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