Regulation of Community Association Managers Recommended by Dept. of Regulatory Agencies  

If the General Assembly follows the recommendation of DORA’s “sunrise” report, we may see the return of regulation of HOA management companies and of the community association managers (CAMs) they employ.

DORA’s recommendation, released earlier this month, stated that regulation of CAMs “is necessary to protect consumers” and recommended the creation of a new regulatory program.  

CAMs were regulated starting in 2015, but the bill to retain that regulation (which DORA recommended) was killed by the General Assembly in 2017 resulting in the phase out of CAM regulation in June 2019. With the General Assembly now controlled by Democrats, this new recommendation may result in legislation restoring regulation of CAMs that will be signed into law by Gov. Polis.

You can find the full text of DORA’s sunrise report here.

Sunset Review Recommends HOA Dispute Resolution Function

Advocates of homeowner rights (like myself) were disappointed when Gov. Polis vetoed the bill that would have retained licensing of Community Association Managers. Now, the Colorado Office of Policy, Research and Regulatory Reform (COPRRR) has released its 2019 Sunset Review Report concerning the HOA Information and Resource Center.

COPRRR recommended continuing the HOA Information and Resource Center through 2025 and directing the Center to implement a dispute resolution process for HOA complaints, which it lacks now. A bill to that effect would have to be passed and signed by Gov. Polis.

With His Veto of HB-1212, Gov. Polis Ended the Licensing of HOA Managers

Governor Polis surprised everyone with his May 31st veto of House Bill 1212, which would have extended the  licensing of Community Association Managers (CAMs).

CAM licensing began in 2015 but was subject to renewal in 2018, under its “sunset” provision. Accordingly, the Colorado Department of Regulatory Agencies (DORA) conducted a sunset review recommending renewal of CAM licensing. The Democratically controlled House of Representatives passed a 2018 bill renewing CAM licensing, but the Republican controlled Senate killed it, thereby requiring DORA to enter into a  year-long wind-down of the program, with July 1, 2019, as the total ending of CAM licensing.

With the Democrats taking control of both houses of the General Assembly and the governorship this year, observers expected that a bill continuing CAM licensing would be passed by both houses (which it was) and signed by the Governor in time to save the program — but it wasn’t. As a result, when July 1 arrived this month, all CAM licensing ended more abruptly than was anticipated at the end of the legislative session. Gov. Polis’ signature on HB 1212 would have prevented that from happening.

HB 1212 had been weakened somewhat due to aggressive lobbying by the Community Association Institute (CAI) whose membership consists primarily of HOA management companies. Efforts by Stan Hrincevich, an outspoken homeowner advocate and president of the Colorado HOA Forum, to include more protections for homeowners were unsuccessful, and that may have been a factor in the Governor’s veto, but Stan (and I) were stunned that the Governor allowed CAM licensing to end, albeit while ordering DORA to gather stakeholder input on the subject in coming months. Sessions for that purpose have been scheduled for Aug. 14 and 29, Sept. 12, and Oct. 8 at DORA’s Denver offices. You can register to attend in person or by webinar. I have registered to attend by webinar.

The now-ended licensing of HOA managers provided a channel for homeowners to file complaints when they felt cheated or mistreated by their HOA or their HOA’s management company — and there were plenty of complaints, which the CAM office at DORA tracked. Without such an office, homeowners have no path other than taking legal action to get redress of their grievances.

Following the passage of the original CAM licensing law in 2015, managers had to pass background checks, get certified, pay a fee, and pass a state exam in order to be licensed. There were also continuing education requirements.

Starting this month, anyone, including a felon straight out of prison, can be hired as a community manager. HOA management will once again be the only profession in Colorado where unlicensed personnel can function in a fiduciary capacity, managing millions of dollars of other people’s money without oversight.