Committee agrees: HOAs need reining in But ombudsman for homeowners bill put on hold Debi Brazzale, Colorado News Agency Thursday, February 25, 2010

A legislative committee agreed yesterday that homeowners associations need reining in, but the lawmakers wouldn’t OK a plan to create a state ombudsman’s office for homeowners until revisions are made to the proposal. That was after the panel heard from homeowners complaining about overreaching associations in what one witness called the “wild, wild, west of HOA land.”

“Nobody disputes that there are issues with HOAs,” said Rep. Joe Rice, D-Littleton, who heads the Business Affairs and Labor Committee that heard the measure, House Bill 1278.

Rice, along with both Republican and Democratic committee members, liked the concept of homeowners being afforded the services that an ombudsman could provide, but they said they could not support the bill in its current form because of issues raised by state regulators, who would oversee ombudsman, and others who came to speak to the panel.

Division of Real Estate chief Erin Toll said the bill as is won’t work because there is not written into law a standard of conduct for homeowners’ associations that would guide and direct the ombudsman.

“I already know what the complaints are, we hear them everyday,” said Toll. “There needs to be clear standards of conduct about what HOAs can and can’t do along with clear sanctions if they don’t follow those standards of conduct.”

Yet, some were skeptical that an ombudsman is even the right approach to the concerns of homeowners, questioning the creation of another layer of bureaucracy in what some homeowners say is already a labyrinth of bureaucratic red-tape when HOAs and their attorneys are at odds with individual homeowners. Rep. Amy Stephens, R-Monument was among the skeptics.

“I’m not sure this is the right vehicle to get to where we want to be,” said Stephens.

Another concern raised and echoed in testimony was that the bill’s provision for two full-time employees to manage the office isn’t nearly enough.

“We want to be realistic about the expectations about this office of ombudsman,” said Amy Redfern, speaking for the Community Association Institute, which provides educational services to HOAs. Redfern said that they would like to see the bill revisited after more discussions with groups like theirs.

The bill is sponsored by two Democratic lawmakers from Aurora, Rep. Sue Ryden in the House and Sen. Morgan Carroll in the Senate. Carroll has been at the forefront of HOA legislation in previous years, and she and Ryden will sit down with the stakeholders to fine-tune the bill before bringing it back to committee. The next hearing on the bill has been scheduled for March 2.