Who Are The Stakeholders?

When the Founding Fathers wrote the Declaration of Independence, they did not ask for King George’s input.

So why is an “H.O.A. Homeowners Rights Task Farce” made up of parties whom consumers of H.O.A.-burdened housing need protecting from?

i.e., H.O.A. managers, H.O.A attorneys, H.O.A. board members, and developers.

To add insult to injury, the “homeowner advocate” position has been filled by a board member of the local chapter of the Communisty Associations Institute; the lobby organization for H.O.A managers, H.O.A. attorneys, and other H.O.A. vendors.

A task force to review issues related to a non-profit association of *homeowners* should be represented by homeowners *with no* conflicts of interest linked to the for profit entities that benefit commercially from the dues paid by the non-profit members of the association. I refer to the for-profit declarants, developers, and contractors (commercial management and service providers) who carry extraordinarily lopsided influence over our non-profit homeowner communities.

- Gary Helfeldt, written testimony regarding Colorado House Bill HB23-1105, “H.O.A. Homeowners Rights Task Farce”, February 16 2023

The Colorado Department of Regulatory Agencies (DORA) has an incredibly distorted opinion of who the “stakeholders” of H.O.A.-burdened housing should be.

In 2019, Governor Jared Polis directed DORA to

to lead a stakeholder process that will complete a comprehensive review of CAMs [communisty association managers] and HOAs. The Executive Director will consider, develop, and make recommendations on how to promote effective and efficient regulation of CAMs and HOAs, including the following:

A. The licensure of CAMs, considering recommendations from the the 2017 DORA sunset report, and whether licensure is needed to protect consumer safety and is cost-effective;

B. Approaches that improve transparency among HOAs;

C. Methods to reduce costs and improve the transparency of HOA fees and fee schedules; and

D. Strategies to promote homeowner rights and consumer protections through an evaluation of the Colorado Common Interest Ownership Act and other related acts or rules.

- “Executive Order D 2019 006”, May 31 2019

In response to the Governor’s order, DORA conducted a “Stakeholder Survey”.

• Open Responses # 1 (Received through July 31, 2019)

• Open Responses # 2 (Received through August 30, 2019)

• Open Responses # 3 (Received through September 30, 2019

• Open Responses # 4 (Received through October 31, 2019)

Who does DORA consider to be the stakeholders in H.O.A. corporations? If you think that it would be the actual homeowners who pay the costs and bear the risks, you are wrong. Very wrong.

H.O.A. managers, board members, and attorneys - those that consumers of H.O.A.-burdened housing need protection from - made up a larger share of stakeholders than H.O.A-burdened homeowners : 42.3 % vs 38.3 %. And why are real estate brokers - another group whose interests don’t necessarily coincide with homeowners - considered stakeholders?

DORA claims that its mission is “protecting consumers”. But it is an impossible conflict of interest when the agency considers stakeholders to be those that consumers need protecting from.

After conducting the stakeholder survey, DORA published its 2019 Report Concerning the Governor’s Executive Order D-2019-006: Directing a Stakeholder Process to Examine Community and Homeowner Associations (December 2019).

Although the Governor ordered DORA to produce recommendations about

• the licensure of H.O.A. managers
• improve transparency
• reduce costs of H.O.A. fees, and
• promote homeowner rights and consumer protections

only the last four paragraphs on the last page are about “Recommendations regarding strategies to promote homeowner rights and consumer protections through an evaluation of the Colorado Common Interest Ownership Act and other related acts or rules”.

Because the real stakeholders in the policy making process are not the homeowners who bear the burdens and pay the costs, but those who profit off of them.

It’s a demonstration of how the inputs that go into the entire process of making H.O.A. law are skewed, and not in favor of homeowners.

Replace the current passive State Paradigm with an active one beginning at the point that a common ownership development is established.

All the developments in question are creatures of statute. As a consequence, the government has a special responsibility to protect the rights of those living in them. Owners are entitled to and desperately need a willing and activist State agency with the proper authority and responsibility to act publicly for the owners. It is important to recognize that these are two crucial and separate concepts. The designated State agency must act publicly and unequivocally in the owners’ best interests. Most importantly, no agency can have- or deserves- the owners’ trust if it is willing to work behind closed doors with any trade group lobbying in the interests of those profiting off of associations and which actively opposes any meaningful owner rights.

- Edward R. Hannaman, "Homeowner Association Problems and Solutions". Rutgers Journal of Law & Public Policy. Vol. 5 No. 4 Spring 2008. At page 718. Emphasis added.