The vast majority of cases before any court are argued and settled by using precedent. In other words, if some judge already made a ruling which supports a case then there is precedent to rule the same way. In some regard, this use of precedent also works with state laws.
Case in point: Colorado House Bill 1237. If passed this bill would require community associations and HOAs in Colorado to be more transparent with regard to their record keeping. The bill would clear up parts of the Colorado Common Interest Ownership Act, which was too vague in describing exactly what type of records HOAs should make available to owners. A bill like this could become popular with many other state legislatures across the country. That’s where precedence comes into play. Interestingly, the genesis of this particular bill began with a request to post the minutes of a HOA board meeting and the lack of such posting.
Looking For Transparency
Cap Witzler is a homeowner in a housing community called Beauvallon. Witzler had previous experience serving on HOA boards so he felt he was well within his rights to ask for minutes of HOA meetings at his current residence. When he requested the minutes of board meetings be posted on the website of his current HOA he was surprised to find some of those minutes were missing.
Sloppy record keeping? Perhaps. But it could also be that the HOA was in complete compliance in terms of what records they were supposed to keep. On the other hand, it might have also been a case of those HOA board members “guessing” as to what files to keep and what to delete.
The Community Associations Institute, which is a backer of this bill, hopes the measure will clear up those proverbial grey areas, and thinks “all sides can benefit from having a clear list of what is required and what is protected.”
Detailed Explanation of Colorado House Bill 1237
This bill describes in great detail the items that a HOA needs to keep as part of their records that are made available to the homeowners. Included in this list are the following:
- Detailed records of receipts and expenditures that apply to any ongoing maintenance.
- Minutes of all meetings including owners meetings and separate executive board meetings.
- Any written communication between board members (include votes) that relate to an action taken by the board.
- The names of unit owners and their addresses including how many votes that owner is entitled to.
- All financial statements for three years.
- Any current contracts that the HOA is involved in.
- Tax returns for 10 years.
- Voting results for one year.
- Most recent reserve study.
- Written current contracts.
- Records on design or architectural requests.
- Current Declarations, Bylaws and organizational documents.
- All written communications passed out to unit owners for the past three years.
This bill should leave no doubt as to what is required of HOAs when it comes to disclosure.
For the vast majority of HOAs, this bill could be considered unnecessary because they are already keeping those kinds of records and making them available to the residents. However, for an association which hasn’t been as organized as they should be, this bill will require them to do so.
It might make the role of HOA recording secretary extremely important and add additional record keeping responsibilities. Checking on the compliance of this bill is a good way to see how your HOA is functioning.
This article is provided by The Management Trust.