Two Sides to the Coin

• Even though Colorado Law requires home buyers to confirm, by signature, that they have been presented with the governing documents of any HOA into which they are entering, some homeowners do not read or certainly do not remember what they read and are shocked by the constraints under which they have agreed to abide when they purchased their home. This is not a flaw in the laws that govern HOAs nor is it a flaw in the HOA concept or structure.
• In addition to maintaining community-owned property, the HOA exists to help homeowners maintain the value of their property (that largest single asset). The HRE HOA Design Guidelines specify a number of constraints on homeowners from paint colors to fence design to the installation of playground equipment to prohibitions on industrial activities in the home, to home-owned businesses to parking of recreational vehicles to the storage of non-operating vehicles. These are aimed at maintaining a sense of harmony throughout the community – not forced indenticality. With fifty-five homes, no two are identical. This is an important part of the HOA Board’s responsibility. It is worth noting that our HOA Board has rejected fewer than one homeowner requested change or improvement per year. It is also worth noting that the HOA Board is now trying to revise the HOA governing documents to remove the more egregiously constraining guidelines which were originally drafted by the developer.
• Some homeowners, even when they are aware of the HOA governing documents and the constraints and guidelines therein insist on acting in violation of those constraints and guidelines to which they agreed at closing on their home. HOA Boards must deal these issues. If the HOA Board does not act, it opens the door for any violation of community guidelines. Such violations can adversely affect the value of other homes in the community.
• Colorado law makes it extremely difficult to change or amend the HOA Covenants. We require only a minor fraction of homeowners to constitute a quorum for our annual meeting, and the Board regularly has to personally invite attendance. Colorado law requires a significant majority of homeowners agree to Covenant changes. This is onerous. There are changes that need to be made to provide homeowners with options that benefit them – options that did not exist or to address issues that were not recognized in 2004. These include, but are not limited to, the acceptability of external satellite antennas smaller than a meter and fireproof return fencing (fencing that attaches to the home) to mitigate threats such as posed by the Marshall Fire.
• The Green Valley Ranch HOA which was in the news for some reported egregious actions is almost 100 times the size to the HRE HOA. Legislation applicable to Green Valley Ranch HOA will not necessarily beneficial to the HRE HOA. One size never fits all.
• One of the specifics called out on the Task Force website is the foreclosure policy. I suspect that one of the major issues to be reviewed will be the policy of an HOAA foreclosing on a home, selling it to pay off liens and then keeping any residual funds beyond the payment of the lien. I will observe here that Colorado governments operate under the same policy. The goose and the gander should operate within the same set of rules. If, as I believe is appropriate, an HOA is required to return to the owner all funds in excess of the lien, then all Colorado governments should also be compelled to return such funds to the owner.

I think that the Task Force members should devote significant time and effort to considering the potential unintended consequences of any recommendations included in their reports. People do not and will not behave the way expected when legislation is passed or regulations created. They will behave in whatever manner they deem most beneficial to them.

I understand that homeowners want to be able to do things with their property subject only to statute, but they did sign the HOA awareness documents at closing – they knew or should have known, and the other homeowners in the community should not be adversely affected because one homeowner wants to paint their house in a neon purple paisley motif and install a satanic altar in their front yard (yes, that's hyperbole).