CCIOA: Colorado HOA Law Explained for Boards

This guide is general information, not legal advice. CCIOA is amended often, and how it applies depends on your community’s age, type and governing documents. For a decision about your association, talk with your association’s attorney.

Most Colorado HOA and condo association boards are volunteers who never set out to learn state law. This guide covers the parts of the Colorado Common Interest Ownership Act that come up most often at board meetings, with the statute section for most points so you or your attorney can read the source. The full text is in the Colorado Revised Statutes, Title 38, Article 33.3.

What CCIOA is and who it applies to

The Colorado Common Interest Ownership Act, usually called CCIOA, is the state law that governs common interest communities: condominiums, planned communities such as townhome and single-family HOAs, and cooperatives. It is codified at C.R.S. 38-33.3-101 and following. It sets out what an association may do, what it must do, and what rights each owner has.

When a community was created matters:

• Communities created on or after July 1, 1992 are subject to the whole act.
• Communities created before July 1, 1992 are subject to a defined list of CCIOA sections, and remain subject to the older Colorado Condominium Ownership Act. A pre-1992 community can choose to come under the whole act (C.R.S. 38-33.3-118).
• Some small communities, or communities with limited expenses, are exempt from parts of the act.

If your association is older than CCIOA, which sections apply is a question for your attorney, because the answer depends on the community’s creation date, type, size and expenses.

Two more points surprise many boards. First, no state agency enforces CCIOA. The HOA Information and Resource Center at the Colorado Division of Real Estate registers associations, answers questions and collects complaints, but it does not regulate associations, mediate disputes or impose penalties. Disputes between owners and associations are civil matters. Second, most associations must register with the Division of Real Estate and renew every year (C.R.S. 38-33.3-401).

The policies your board must adopt

CCIOA requires every association to adopt written “responsible governance policies” (C.R.S. 38-33.3-209.5). Most of them have few required contents beyond existing, but a few have specific requirements. The required policies cover:

1. Collection of unpaid assessments. Due dates, when an account is past due, late fees and interest, the fee for a returned payment, payment plan options and how payments are applied. The association must, on request, make a good-faith effort to set up a payment plan with a delinquent owner, and must give an owner at least 30 days to cure a delinquency.
2. Covenant and rule enforcement, including notice and hearing procedures and the schedule of fines.
3. Conduct of meetings, such as how owners comment, proxies, electronic voting and whether meetings may be recorded.
4. Inspection and copying of association records.
5. Conflicts of interest for board members: when a conflict exists, how it is disclosed, when a member must recuse, and periodic review of the policy.
6. Investment of reserve funds.
7. Adoption and amendment of policies, procedures and rules.
8. Alternative dispute resolution between the association and owners.
9. Reserve studies: whether and when one is done, whether it is based on a physical and a financial analysis, and whether there is a funding plan for the work it recommends.

The association must give owners a copy of its governance policies every year as part of its annual disclosure, along with the budget, financial statements, insurance list, minutes and other documents.

If your policies were adopted years ago and never revisited, they may not reflect recent amendments. A periodic review with your association’s attorney is the simplest way to keep them current.

Owner records and meetings

Records

CCIOA lists the records an association must keep and which ones owners may examine and copy (C.R.S. 38-33.3-317). Minutes of owner and board meetings, and records of actions taken without a meeting, are kept permanently. Financial statements, tax returns, current contracts, ballots and owner communications each have their own retention period.

Under the statute, an association:

• may ask owners to submit a written request that describes the records with reasonable particularity, ahead of the inspection;
• may limit inspection to normal business hours or to the next regularly scheduled board meeting;
• may charge a reasonable fee for labor and materials, collected in advance;
• may not require an owner to state a reason for the request.

Some records must be withheld, and others may be withheld at the board’s discretion. An association that wrongly refuses to produce records can face penalties or damages (C.R.S. 38-33.3-317(4.5)).

Meetings

• Owner meetings must be held at least once a year (C.R.S. 38-33.3-308). Notice must go out at least 10 and no more than 50 days ahead, be physically posted in a conspicuous place where practical, and state the time, place and agenda, including any proposed budget changes or proposed removal of a director.
• Special owner meetings can be called by the president, a majority of the board, or owners holding 20 percent of the votes, or any lower percentage the bylaws set.
• Board meetings are open to every owner and to anyone an owner designates in writing (C.R.S. 38-33.3-308(2)). Before the board votes on an issue, owners must be allowed to speak on it, subject to reasonable time limits (C.R.S. 38-33.3-308(2.5)).
• Executive session is allowed only for listed topics, such as personnel matters and the managing agent’s contract, legal advice, and matters whose disclosure would invade an owner’s privacy (C.R.S. 38-33.3-308(3)). The minutes must note that an executive session was held and its general subject.
• Secret ballots are required for contested board elections and when 20 percent of the owners present in person or by proxy ask for one on an issue (C.R.S. 38-33.3-310).

Collections and fines

Colorado gives associations a strong collection tool: a statutory lien on each unit for assessments and, unless the declaration says otherwise, for fines, fees, late charges, attorney fees and interest (C.R.S. 38-33.3-316). Recording the declaration perfects the lien, so the association does not need to record a separate lien notice. The lien has a time limit: it is lost if enforcement does not begin within six years after the assessment becomes due.

Fines and collections are also where the law has changed most in recent years:

• An association may not fine an owner unless it has adopted and follows a written fine policy with a fair and impartial fact-finding process: at a minimum, notice of the alleged violation and a chance to be heard before an impartial decision-maker (C.R.S. 38-33.3-209.5(2)).
• Before an account is turned over to a collection agency or an attorney, the association must follow specific notice and payment-plan steps.
• Lawsuits to enforce a building restriction must be started within one year after the association knew, or should have known, of the violation (C.R.S. 38-33.3-123(2)).

Because the rules on fines, late fees and foreclosure have changed more than once, a board should have its collection and enforcement policies reviewed against the current statute before relying on them.

Reserves and budgets

Budgets. The board adopts a proposed budget, then mails or delivers a summary to all owners no later than 90 days after adopting it and sets a meeting for owners to consider it. Unless the owners veto the budget at that meeting (a majority of all owners, or any larger share the declaration sets), the budget is ratified (C.R.S. 38-33.3-303(4)). Some older or small communities whose declarations cap assessments follow different rules.

Reserves. CCIOA does not require a reserve study, but it does require a reserve study policy and a reserve investment policy (C.R.S. 38-33.3-209.5). If an association with 30 or more units delegates its money handling to a managing agent, its bylaws must require the agent to keep the association’s funds separate from other associations’ funds and to keep reserve accounts separate from operating accounts (C.R.S. 38-33.3-306(3)).

In practice, a current reserve study and a funding plan that the board actually follows are what keep special assessments rare. Our HOA accounting and reserve planning page explains how we build capital plans from reserve studies prepared by reserve specialists.

Audits. The board may order an audit at any time, and owners of at least one-third of the units can require one if the association’s annual revenues or expenditures meet the statute’s threshold (C.R.S. 38-33.3-303).

When to call your association’s attorney

A manager can keep your association organized and on schedule, but a manager is not your lawyer. Call your association’s attorney before you:

• amend the declaration or bylaws, or adopt a rule that restricts how owners use their units;
• adopt or rewrite governance policies, especially the collection and fine policies;
• turn a delinquent account over for collection or consider foreclosure;
• answer a demand letter, a records dispute you cannot resolve, or any threat of litigation;
• sign a large or long-term contract, or borrow against the association’s assets or future assessments;
• work out which parts of CCIOA apply to a community created before July 1, 1992.

Where to learn more

• Colorado Revised Statutes, Title 38, Article 33.3 (the official text)
• HOA Information and Resource Center, Colorado Division of Real Estate
• HOA Frequently Asked Questions, Colorado Division of Real Estate

Mountain Valley manages HOAs and condo associations across the Vail Valley, Summit County and the Roaring Fork Valley from our office in Eagle-Vail. See how we work with boards on our HOA management page.