Colorado Common Interest Ownership Act, Applicable Colorado Laws and Other Core Competencies The Colorado Legislature passed House Bill 13‐1277 which requires licensing for anyone who engages in certain defined activities of a “Community Association Manager” relating to the management of a common interest community. An applicant for a community association managers license must hold a credential pursuant to § 12‐61‐1003(5)(a)(I)(A), (B), or (C), C.R.S. or complete 24 hours of instruction as approved by the Director of the Division of Real Estate. Course Objective: To protect the public by having students understand Colorado statutes, legal documents and other core competencies relating to the managing of the affairs of common interest communities. The course is comprised of two parts: a general portion and a state specific portion. The course must be completed and passed, to meet the educational requirements prior to sitting for the state license examination. Providers should address each applicable Statute, Rule and Position Statements during the course. Course providers are responsible for ensuring that the Statutes, Rules and Position Statements used during the course presentation are accurate and up‐to‐date. Testing: At least one final exam is required to establish a student’s satisfactory completion and comprehension of the statutory requirements for the course. All students must pass the final exam by at least 75% and if the student fails, the course provider must have an equal alternate exam for the student to take and pass at same pass rate. Courses taught online must meet the requirements set forth in the “Online Course Approval Checklist” created by the Division of Real Estate. GENERAL MAJOR TOPICS TO BE COVERED:
HOURS
I. Real Estate Overview (not tested)
.5
II. Legal Documents of an Association
2
III. Governance
2.5
IV. Bid Requests
1
V. Contract Provisions
1.5
VI. Financial Management
3
VII. Risk Management
1.5
VIII. Facilities Management
2.5
IX. Ethics
1.5
TOTAL GENERAL
16
STATE SPECIFIC MAJOR TOPICS TO BE COVERED:
HOURS
I. Community Association Manager Licensure program (not tested)
.5
II. Colorado Common Interest Ownership Act
3
III. Colorado Revised Nonprofit Act
1.5
IV. Colorado Fair Housing Act and Colorado Civil Rights Act V. Colorado Fair Debt Collection Practices Act (not tested)
1 .5
VI. Misc. Statutes
1.5
TOTAL STATE
8
TOTAL GENERAL
16
TOTAL BOTH PORTIONS
24
General portion: I. Real Estate Overview (material not tested) A. What is Real Estate 1. Real property defined 2. Personal property defined B. Rights in real estate 1. Rights in land‐ mineral, water etc. 2. Rights of ownership – possession, encumbering, transferring etc. 3. Governmental rights – police power, eminent domain, taxation, escheat
C. Tenancy 1. Severalty 2. Joint tenants 3. Tenants in Common D. Condominiums‐ townhomes and other property 1. Can be any type of property 2. Declarations 3. Common Interest Communities Act a. General definition throughout the United States 4. Unit versus common elements a. Limited common elements E. Title 1. Title commitment 2. Transfer of title
II. Legal Documents of an Association A. Definition and Priority of Association Documents 1. Recorded map, plat or plan 2. Declaration 3. Articles of Incorporation 4. Bylaws 5. Rules and Regulations 6. Alterations to Common Elements Requirements a. Architectural controls and restrictions b. Limited common elements c. Maintenance and indemnification agreements B. Amending Documents 1. Owner/member amendments (C.R.S. §38‐33.3‐217) 2. Board amendments 3. Recording amendments C. Other Legal Documents 1. Condo questionnaires 2. Insurance certificate 3. Real estate sale disclosures (C.R.S. §38‐35.7‐102, as referenced in buy/sell contract)
III. Governance A. B. C. D. E.
Laws and documents that govern an association Hierarchy of laws and documents Role, duties and responsibilities of the executive board Role, duties and responsibilities of the Community Association Manager (CAM) Fiduciary Responsibility 1. Duty of care a. Business judgment rule 2. Duty of loyalty 3. Duty of confidentiality F. Association owners’ rights and responsibility 1. Contact information (C.R.S. §38‐33.3‐317) 2. Owner directory publication (HB14‐1125) (C.R.S. §38‐33.3‐317(3.5) G. Types of common interest communities 1. PUD a. Single Family b. Townhomes c. Patio Homes d. Fractional ownership e. Commercial and Mixed‐use communities 2. Condo a. Condominiums b. Timeshares c. Commercial and Mixed‐use communities 3. Cooperatives H. Meetings (C.R.S. §38‐33.3‐308) 1. Types of meetings a. Annual meeting b. Special meetings i. Owners ii. Board c. Board meetings 2. Notice of meetings 3. Meeting quorum and attendees 4. Facilitation of meetings a. Agenda b. Open meetings c. Executive sessions d. Opportunity to speak and time limitations e. Motion procedure f. Robert’s Rules of Parliamentary Procedure
I. J. K. L. M. N.
g. Minutes of meetings h. Conduct at meetings (behavior) Written policies and procedures for managing CIC Enforcement of governing documents 1. Due process Communication with board and owners 1. Electronic communications (emailing) Quorums (C.R.S. §38‐33.3‐309) Elections, Voting and Proxies (C.R.S. §38‐33.3‐310) Declarants 1. Turnover of control from declarant (C.R.S. §38‐33.3‐303 2. Disclosure of information (C.R.S. §38‐33.3‐209.4)
IV. Bid Requests A. Process for small jobs 1. Expenses less than a specific dollar amount B. Process for large jobs 1. Determining what constitutes a large job C. Vetting the contractor 1. Contractor qualifications 2. Insurance requirements D. Bid specifications 1. Who creates specifications and why 2. Assess bid specifications 3. Specification checklist E. Managing disputes F. Warranties G. Bidding process H. Evaluation of bids I. Contract language J. Meeting and negotiating with contractors
V. Contract Provisions A. Types of contracts 1. Utilities 2. Routine services 3. Construction 4. Short/Long term B. Negotiating contracts C. Knowledge of need for third‐party expert advice
D. Knowledge of need for legal advice E. Management Contracts (CAM Rule F‐2) 1. Standard provisions 2. Compensation 3. Designated Manager license number 4. Record retention and disclosure policy 5. Disclosure of fees charged to a CIC (HB14‐1254) (C.R.S. §12‐61‐1004.5) 6. Term 7. Insurance requirements 8. Expense approvals 9. Budgeting 10. Accounting 11. Vendor contract requirements 12. Legal 13. Methods for resolving contract disputes 14. Termination F. Vendor Contracts 1. Contract vs. Bid specifications 2. Insurance requirements and performance bonds 3. Terms of payment (e.g. 30 days) 4. Expense approvals without board approval 5. Contractor compliance provisions 6. License and permits 7. Change orders 8. Termination 9. Managing disputes
VI. Financial Management A. Financial reports 1. balance sheet 2. income statements 3. ledgers 4. accounts payable/receivable 5. variance 6. bank reconciliations 7. records 8. Financial controls (signatories) B. Accounting practices (CAM Rule E) 1. Methods a. Cash b. Accrual
C. D.
E.
F. G.
H. I. J. K.
L. M. N. O. P. Q.
c. Modified accrual 2. Accounting guidelines (GAAP), legislation and regulation 3. Accounting controls and systems 4. Audits (C.R.S. §38‐33.3‐303(4)(b)) Tax filings and forms Operating budget planning 1. Line item analysis 2. Forecasting income and expenses Reserve budget planning 1. Reserve study and funding (C.R.S. § 38‐33.3‐209.5) 2. Reserve investment policy (C.R.S. § 38‐33.3‐303(2.5)) Alternative funding (loans, fees) Investment of funds 1. Association investment policy (HB13‐1276) (C.R.S. §§38‐33.3‐209.5; 38‐33.3‐316; and 38‐ 33.3‐316.3) 2. Financial expert advice Fund transfers Regular assessments Special assessments Delinquent accounts 1. Collection policy and due process – (C.R.S. §38‐33.3‐209.5) 2. Notices 3. Fees and charges 4. Legal assistance 5. Foreclosure Bad debt and write‐offs Property valuation assessment/appraisal Insurance coverage for possible financial losses Review and timely payment of invoices Financial reports to the board Financial disclosures to owners (HB12‐1237) (C.R.S. §38‐33‐3.317)
VII. Risk Management A. Insurance For Association 1. Association insurance requirements and needs a. Required by law or association documents (C.R.S. §38‐33.3‐313) 2. Types of insurance coverage for association a. Liability b. Property c. Employee
d. Director and officers e. Fidelity f. Umbrella 3. Owner/member insurance coverage and applicability to association 4. Types of insurance claims 5. Exclusions for coverage 6. Certificate of insurance distribution B. Insurance For Community Association Manager 1. Manager insurance requirements and needs a. Required by law, association documents and regulations 2. Types of insurance coverage for manager a. Liability b. Property c. Employee d. Errors and Omissions e. Fidelity (C.R.S. §38‐33.3‐313) C. Property Inspections D. Emergency and disaster planning
VIII. Facility Management A. Type of property (single family vs. multi‐family) B. Common areas vs. limited common areas C. Day‐to‐day operations 1. Involving the parties a. Manager b. Board members c. Committees d. Homeowners e. Contractors f. Skilled professionals g. consultants 2. Coordinating short term and long term plans 3. Clear communication D. Maintenance 1. Establishing an effective maintenance system/operation 2. Establish controls 3. Planning for budgets and assessments a. Annual b. Immediate needs 4. Inspection checklists and reports/ work orders 5. Contractor requirements 6. Board reports
E. F. G. H. I.
7. Association asset analysis and needs of the community a. Short term b. Long term 8. Reserve study a. Responsibility b. Types of projects c. Performance d. Budgeting 9. Writing and issuing specifications/RFPs a. Working with contractors b. Budgeting c. Project requirements d. Background checks e. Payment schedules f. Lien waivers 10. Bidding by qualified contractors and conflicts of interest 11. Using a uniform vs negotiated contract a. Contract specifications b. Attorney reviews c. Contract change orders d. Construction meetings e. Timeframes for work completion 12. Establishing maintenance programs for the association a. Routine b. Preventative c. Emergency d. Requested and scheduled replacements (i.e. reserve study) 13. Evaluation of association programs and goals a. Use of surveys b. Site inspections c. Previous cost analysis d. References e. Work order compilations 14. Creating a maintenance and insurance responsibility matrix for the association (with legal assistance) Inspections Repairs and Replacements Budgeting Future planning for major capital improvements, repairs and replacements Reserve study and reserve accounts
IX. Ethics A. Compliance with applicable law
B. C. D.
E.
F. G.
1. Colorado Common Interest Ownership Act 2. Colorado Non‐Profit Act 3. Other applicable Colorado laws 4. Federal housing and discrimination laws Conduct of the Community Association Manager (CAM) Standards of practice Disclosure 1. Any conflicts of interest 2. Contracts 3. Transparency Communication 1. With owners 2. With board members 3. With vendors and contractors 4. Association minutes 5. Newsletters and social media Ethics policy Conflict of interest 1. General categories a. Appearance of impropriety b. Fiduciary duty c. Self‐dealing d. Communications e. Transparency f. Conflicts of interest policy 2. Board members a. Prioritizing maintenance projects b. Board member favoritism c. Financial gain d. Selective compliance and enforcement of covenants e. Records disclosure 3. Manager a. Who is the client b. Personal benefits c. Gifts d. Vendor relationships and favoritism e. Conflicts with other clients f. Disclosure of vendor contracts g. Disclosure of association records (C.R.S. §38‐33.3‐317) and CAM Rule F‐1 h. Use of funds by manager i. Manager authorizations j. Termination and turnover of association records
State specific portion: I. Community Association Manager Licensure program (HB 13 – 1277) – material not tested A. Who is required to hold a CAM license 1. Engages in two or more defined activities (12‐61‐1001(3)(a) – (f)) 2. Compensation by fee, commission, salary, or anything of value (12‐61‐1001(4)(a)) 3. Management of a Common Interest Community (CIC) a. Residential b. Commercial c. Time‐share d. Mixed‐use B. Requirements for licensure 1. Hold one of the following credentials (12‐61‐1003(5)(a)(I)(A),(B),(C), or (D) a. CMCA b. AMS c. PCAM d. Alternative “DRE” credential 2. Certify completion of the required educational requirements 3. Pass the state exam 4. Submit a set of fingerprints to the Colorado Bureau of Investigations 5. Insurance requirements (D rules) 6. Complete the Division of Real Estate application for licensure C. Partnerships, LLCs, or Corporations 1. Shall appoint a Designated Manager 2. DM is responsible for supervision and management of licensed activity 3. Personally responsible for handling all CIC funds D. Maintaining the CAM license 1. Renewal (D rules) 2. Reinstatement 3. Continuing education requirements (B rules)
II. Colorado Common Interest Ownership Act (CCIOA) A. General Provisions: (Part 1) ‐ (C.R.S. §38‐33.3‐101 to §38‐33.3‐124) 1. Date enacted (legislative notes 1991) 2. Applicability to communities created before/after date CCIOA enacted (Sec. 117) 3. Common Interest Community: Colorado definition (Sec. 103(8)) 4. Common Elements: definition (Sec. 103(5)) 5. Declaration: definition (Sec. 103(13)) 6. Limited Common Element: definition (Sec. 103(19)) 7. Taxation of Common Elements (Sec. 105) 8. Prohibitions contrary to public policy (Sec. 106.5) a. American flag b. Service flag c. Political signs d. Emergency service vehicles
e. Fire mitigation plans f. Xeriscape or drought‐tolerant vegetative landscapes g. Renewable energy generation devices h. Flammable roofing materials 9. Unreasonable restrictions on energy efficiency measures (Sec. 106.7 and Sec. 106.8) a. Energy efficiency measure—definition b. Permissible rules c. Electric vehicle charging stations (Sec. 106.8) 10. Exemptions from CCIOA a. Small cooperatives and planned communmities (Sec. 116) b. Limited expense communities (Sec. 116) c. Large planned communities (Sec. 116.3) 11. Statute of limitations for enforcement actions (Sec. 123(2))Right to collect/seek legal fees (Sec. 123 (1)) 12. Alternative dispute resolution (Sec. 124) B. Creation, Alteration, and Termination of Common Interest Communities: (Part 2) ‐ (C.R.S. §38‐ 33.3‐201 to §38‐33.3.223) 1. How a common interest community must be created (Sec. 201) (not tested) 2. Declaration (Sec. 205) (not tested) a. Required content b. Purpose 3. Required public disclosures (Sec. 209.4) 4. Required governance policies (Sec. 209.5) 5. Conflict of interest policy (Sec. 209.5(4)) 6. Executive board member education (Sec. 209.6) 7. Owner education (Sec. 209.7) 8. Alteration of units (Sec. 211) 9. Declaration amendments (Sec. 217) a. Min/max owner approval requirements (Sec. 217(1)(a)) b. Court petition process (Sec. 217(7)) c. Certified notice to first mortgagees option (Sec. 217(1)(b)) C. Management of the Common Interest Community (Part 3) ‐ (C.R.S. §38‐33.3‐301 to §38‐33.3‐ 319) 1. Independent powers of association even without specific authority in the declaration (Sec. 302) a. Right to adopt rules and regulations (Sec. 302(1)(a)) b. Right to regulate use, maintenance and repair of common elements (Sec. 302(1)(f)) c. Notice and opportunity for hearing prior to fining (Sec. 302(1)(k)) d. Termination of managing agent for cause (Sec.302(4)(a) 2. Actions that may not be taken by boards without owner approval (Sec. 303(3)(a)) 3. Committee appointments (Sec. 303(3)(b)) 4. Financial Audits (Sec. 303(4)(b)) 5. CCIOA budget process (Sec. 303(4)) 6. Investment of Reserve Funds (Sec, 303(2.5)) and Reserve Study (Sec. 209.5) 7. Construction defect actions – disclosure (Sec. 303.5) 8. Required contents of bylaws (Sec. 306) 9. Default maintenance requirements (Sec. 307)
10. 11. 12. 13. 14. 15. 16. 17. 18. 19.
Requirement for annual meetings (Sec. 308(1)) Calling special meetings (Sec. 308(1)) Notice of membership meetings (Sec. 308(1) and (2)) Open meetings (Sec. 308(2.5)) Executive sessions and working sessions (Sec. 308(3) through (7)) Default quorom (Sec. 309) Use of proxies (Sec. 310) Conflict of Interest ‐ Board and Manager (Sec. 310.5) Requirements for conveyance/encumbrance of common elements (Sec. 312) Insurance requirements (Sec. 313) a. Fidelity Insurance (Sec. 313(10) through (13) 20. Assessment lien (Sec. 316) 21. Records of association (Sec. 317) a. What constitutes a record subject to inspection? b. Who may inspect? c. What records may/must be withheld? 22. Conflict between CCIOA and other statutes (Sec. 319) D. Registration (Part 4) ‐ (C.R.S. §38‐33.3‐401 to §38‐33.3‐402) 1. Requirement to annual register common interest community (Sec. 401) 2. CAM licensing – must maintain valid license (Sec. 402)
III. Colorado Revised Nonprofit Corporations Act (C.R.S. §7‐121‐et seq.) A. Review assoication Articles of Incorporation and Bylaws with regard to their applicability to the CO Non‐Profit Act. B. Incorporation 1. Articles of incorporation (7‐122‐102) a. Purpose b. Required content 2. Bylaws (7‐122‐106) a. Purpose b. Content C. Purposes and Powers 1. Independent powers of corporation without specific authority in articles of incorporation (7‐123‐102) D. Member Meetings 1. Special meetings (7‐127‐102) a. Who can call? b. Process if request received from owners 2. Action by written ballot (7‐127‐109) a. Mandatory information on ballot b. Mandatory information in solicitation 3. Use of proxies (7‐127‐203) a. Appointment b. Revocation 4. Quorum—default requirement (7‐127‐205) a. Impact of CCIOA
E. Directors and Officers 1. Default qualifications and terms (7‐128‐102 and 105) 2. Removal of directors (7‐127‐108) 3. Filling board vacancies (7‐127110) 4. Action by board without a meeting (7‐128‐202) 5. Requirements concerning notice of board member meetings (7‐128‐203) 6. Owners’ rights during board meetings (7‐128‐203) 7. Officers (7‐128‐301 through 304) a. Election b. Removal c. Duties 8. Required standards of conduct for board members and officers (7‐128‐401) 9. Conflict of interest (7‐128‐501) a. Definition b. Requirements F. Indemnification (7‐129‐101 through 7‐129‐110) 1. Who is entitled to indemnification? 2. Definition G. Amendment of Articles and Bylaws 1. Articles—default owner approval requirement (7‐130‐103) 2. Bylaws—default approval requirements (7‐130‐201 and 203) 3. Changes requiring owner approval (7‐130‐203) H. Corporate Records (7‐136‐101) 1. Documents maintained 2. Periodic reports with the Secretary of State
IV. Colorado Fair Housing Act and Colorado Civil Rights Act (C.R.S. §24‐34‐501, et seq.) A. Federal Fair Housing Act ‐ (42 U.S.C. §§ 3601 to 3619) 1. Basis of discrimination 2. Illegal practices B. Colorado Fair Housing and Civil Rights Acts 1. Protected classes 2. Reasonable accommodations 3. Reasonable modifications 4. Assistance animals (24‐34‐803) C. Americans With Disabilities Act (ADA) ‐ (42 U.S.C. §126, et seq.) (not tested) 1. Bases of Discrimination 2. Illegal Practices D. Major differences between the Federal and Colorado Fair Housing Acts
V. Colorado Fair Debt Collection Practices Act (C.R.S. §12‐14‐101, et seq.) (not tested) A. Comparison with Federal Statute B. Who must comply? C. Required steps to comply
VI. Misc. Statutes A. Colorado Condominium Ownership Act (COA) ‐ (C.R.S. §38‐33‐101, et. seq.) 1. Applicability of the Act 2. Staggering of director terms in condominium communities (38‐33‐106(3)(a)) 3. Time‐sharing provisions (Sec, 110, 111, and 113) B. Colorado Consumer Protection Act ‐ (C.R.S. §6‐1‐101, et. seq.) (not tested) 1. Time‐Share Resale Services (C.R.S. §§6‐1‐102; 6‐1‐703; 6‐1‐703.5) (SB13‐182) 2. Deceptive trade practices related to time‐share sales (Sec. 703 and 703.5) C. Colorado Titles And Interests In Land Statute ‐ (C.R.S. §38‐30‐168) 1. Protection of “renewable energy generation devices” (38‐30‐168) a. Solar energy device b. Wind‐electric generator 2. Adoption of reasonble restrictions (38‐30‐168) D. Colorado Water Conservation Board Statute ‐ (C.R,S. §37‐60‐126) 1. Xeriscape protection (37‐60‐126(11)) E. Unauthorized Practice Of Law ‐ (C.R.S. §12‐5‐112) 1. What is the practice of law 2. What to avoid 3. What is allowed F. Colorado Marijuana Laws (not tested) 1. Medical marijuana code (C.R.S. §12‐43.3‐101, et seq.) 2. Recreational marijuana code (C.R.S. §12‐43.4‐101, et seq.) G. FCC – Over‐The‐Air Reception Devices (OTARD) ‐ (47 C.F.R. Sec. 1.4000) (Sec. 207 of the Telecommunications Act of 1996) 1. Prohibits restrictions that impair the installation, maintenance or use of antennas used to receive video programming – including satellite dishes, tv antennas, and wireless cable antennas. 2. Association rules governing the method and installation may still be enforced.
