HB 1099 — Protect Financial Condition of Homeowners Associations

NOTE:

This bill has been prepared for the signatures of the appropriate legislative officers and the Governor.

To determine whether the Governor has signed the bill or taken other action on it, please consult the legislative status sheet, the legislative history, or the Session Laws.

alsoSENATOR(S)KolkerandMarchman,Exum,GonzalesJ.,Jodeh,Kipp,also SENATOR(S)KolkerandMarchman,Exum, GonzalesJ.,Jodeh,Kipp, Sullivan, Weissman, Coleman.

CONCERNINGPROTECTINGTHEFINANCIALCONDITIONOFCOMMONINTERESTCONCERNINGPROTECTINGTHEFINANCIALCONDITIONOFCOMMON COMMUNITIESINTEREST .COMMUNITIES.

Be it enacted by the GeneralGeneralAssembly Assemblyofthe of the State ofofColorado: Colorado:

In Colorado Revised Statutes,Statuteadd add 38-33.3-209.2 as follows:

(1) PRIORPRIORTO TOTRANSFEROF TRANSFERCONTROL OFCONTROLFROMFROM THE DECLARANT TO THE ASSOCIATION OF A PLANNED COMMUNITY OR CONDOMINIUMCONDOMINIUM, , THE DECLARANT SHALL COMMISSION AND PAY FOR A RESERVE STUDY FOR THE PLANNED COMMUNITY OR CONDOMINIUMCONDOMINIUM, , WHICH STUDY ADDRESSES THE COMPONENTS OF THE COMMON ELEMENTS AND PROPERTY THAT THE ASSOCIATIONISRESPONSIBLEFORMAINTAININGASSOCIATION ,REPAIRINGIS ,ORREPLACINGRESPONSIBLEFORMAINTAINING, ,REPAIRING, ORREPLACING, AS DESCRIBED IN THE DECLARATIONDECLARATION. .

THE RESERVE STUDY MUST PROJECT COSTS OVER A THIRTYTHIRTY-YEAR YEARPERIOD. PERIOD .

________ Capital letters or bold & italic numbers indicate new material added to existing law;

dashes through words or numbers indicate deletionsdeletionsfrom from existing law andandsuch such material is notnotpart part of the act.

(2) TTHE HE RESERVE STUDY DESCRIBED IN SUBSECTION (1)OF(1) OF THIS SECTION MUST INCLUDE AN ESTIMATE OF THE PROJECTED COST OF MAINTAININGMAINTAINING, , REPAIRING, OR REPLACING THE COMMON ELEMENTS OR PROPERTY OF THE PLANNED COMMUNITY OR CONDOMINIUMCONDOMINIUM. .

(3) A RESERVE STUDY REQUIRED PURSUANT TO THIS SECTION MUST BE CONDUCTED BY AN INDEPENDENT RESERVE STUDY PROFESSIONAL OR OTHER QUALIFIED PROFESSIONAL THATTHAT: :

(a) HHAS AS KNOWLEDGE OF INDUSTRY STANDARDS FOR RESERVE STUDIES;

(b) HHAS AS NO BUSINESS RELATIONSHIP WITH OR FINANCIAL INTEREST IN THE DECLARANTDECLARANT, ,OTHEROTHER THAN BEING RETAINED BY THE DECLARANT TO CONDUCT RESERVE STUDIESSTUDIES; ;AND (c) IS NOT AN AFFILIATE OF THE DECLARANT.

SECTION2.AND (c) Is NOT AN AFFILIATE OF THE DECLARANT.

InColoradoRevisedStatutes,38-33.3-209.4,amendSECTION (2)(h)2. and (2)(i);

andIn addColorado (2)(j)Revised asStatutes, follows:38-33.3-209.4amend (2)(h) and (2)(i);

anadd (2)U) as follows:

(2) Within ninety days after assuming control from the declarant pursuanttosectionpursuant to section 38-33.3-303 (5), and within ninetydaysninety days after the end ofo f each fiscal year thereafter, the association shall make the following information available to unit owners upon reasonable notice in accordance with subsection (3) ofo f this section:

(h) TheminutesoftheexecutiveboardandmembermeetingsfortheThe minutes o fthe executive board and member meetings for the fiscal year immediately preceding the current annual disclosure;disclosuand (i) The association's responsible governance policies adopted under section 38-33.3-209.5;

andAND (i)U) Theassociation'sresponsiblegovernancepoliciesadoptedunder section 38-33.3-209.5;ND (j) THE MOST RECENT RESERVE STUDY REQUIRED PURSUANT TO SECTION 38-33.3-209.2.

PAGE 2-HOUSE BILLB IL L 26-1099 SECTION 3.

In Colorado Revised Statutes, 38-33.3-303,38-33.3-303,amend amend(9)(1) (9)(l) and (9)(m);

andanadd add (9)(n) as follows:

(9) Within sixty days after the unit owners other than the declarant elect a majority ofofthe the members ofofthe the executive board, the declarant shall deliver to the association all property of the unit owners and of the association held by or controlled by the declarant, including without limitation the following items:

(l)(I) Any service contract in which the association is a contracting party or in which the association or the unit owners have any obligation to pay a fee to the persons performing the services;

and (m) Forlargeplannedcommunities,copiesofallrecordeddeedsandForlargeplannedcommunities,copiesofallrecordeddeeds and allrecordedandunrecordedleasesevidencingownershiporleaseholdrights of the large planned community unit owners' association in all common elements within the large planned community;

AND (n)(n)FORPLANNED FORPLANNEDCOMMUNITIESANDCONDOMINIUMSCOMMUNITIESANDCONDOMINIUMS, ,THERESERVETHE RESERVE STUDY COMMISSIONED BY THE DECLARANT PURSUANT TO SECTION 38-33.3-209.2.

In Colorado Revised Statutes, 38-33.3-317,38-33.3-317add add (9) as follows:

(9) (a)(a(I) (I)WHENANASSOCIATION, WENOTHERTHANASELF-MANAGED AN ASSOCIATION ,OTHER THAN A SELF -MANAGED ASSOCIATION THAT HAS NOT RETAINED AN ASSOCIATION MANAGEMENT COMPANYCOMPANY, ,TERMINATESTERMINATES OR FAILS TO RENEW AN AGREEMENT WITH ITS ASSOCIATIONMANAGEMENTCOMPANYASSOCIATIONMANAGEMENTCOMPANY,WITHINFORTY-FIVEDAYSAFTERTHE ,WITHINFORTY -FIVEDAYSAFTERTHE TERMINATION OR FAILURE TO RENEW THE AGREEMENTAGREEMENT, , THE FORMER ASSOCIATION MANAGEMENT COMPANY SHALL DELIVER TO THE NEW ASSOCIATION MANAGEMENT COMPANY OR TO THE ASSOCIATIONASSOCIATION, ,ATAT NO CHARGE TOTOTHE THEASSOCIATION, ASSOCIATION , ALL ASSOCIATION PROPERTYPROPERTY, ,INCLUDINGINCLUDING PAGE 3-HOUSE BILL 26-1099 MONEYMONEY, , FINANCIAL ACCOUNTSACCOUNTS, ,ACCOUNTACCOUNT BOOKSBOOKS, , FINANCIAL RECORDSRECORDS, , INSURANCE POLICIESPOLICIES, ,CONTRACTS, CONTRACTSBUSINESS ,DOCUMENTS, BUSINESSINVOICES, DOCUMENTSRECEIPTS, ,SUBSCRIPTIONS, INVOICES,ACCOUNT RECEIPTS,SUBSCRIPTIONS,ACCOUNTINFORMATIONINFORMATION, ,ACCOUNTPASSWORDSACCOUNT ,PASSWORDS, KEYSKEYS, ,ANDAND ANY OTHER PROPERTY OR RECORDS OF THE ASSOCIATIONASSOCIATION, ,OROR INFORMATION CONCERNING THE ASSOCIATIONASSOCIATION. .

(II) SUBSECTION (9)(a)(IOF(9)(a)(I) OF THIS SECTION DOES NOT REQUIRE A FORMER ASSOCIATION MANAGEMENT COMPANY TO SUBMIT ANY PROPRIETARYSOFTWAREORCOMPUTERPROGRAMSTOTHEASSOCIATIONPROPRIETARY ,SOSOFTWAREORCOMPUTERPROGRAMSTOTHEASSOCIATION, SO LONG AS THE ASSOCIATIONASSOCIATION'S S DATA OR RECORDS WITHIN THE PROPRIETARY SOFTWARE OR COMPUTER PROGRAM IS SUBMITTED TO THE ASSOCIATIONASSOCIATION. .

(b) UNLESS OTHERWISE AGREED IN WRITING BETWEEN THE ASSOCIATIONANDTHEFORMERASSOCIATIONMANAGEMENTCOMPANYASSOCIATION THEANDTHEFORMERASSOCIATION MANAGEMENTCOMPANY,THE FORMER ASSOCIATION MANAGEMENT COMPANY THAT FAILS TO COMPLY WITH THE REQUIREMENT SET FORTH IN SUBSECTION (9)(a)(I)OF(9)(a)(I) OF THIS SECTION:

(I) ILIABLETOTHEASSOCIATIONFORALLINTERESTANDLATEFEESIS LIABLETOTHE ASSOCIATION FORALL INTERESTAND LATE FEES ON LATE PAYMENTS MADE BY THE ASSOCIATION DUE TO THE FORMER ASSOCIATION MANAGEMENT COMPANYCOMPANY'S S FAILURE TO COMPLY WITH THE REQUIREMENTSETFORTHINSUBSECTION (9)(a)(IOFTHISSECTIONANDANY(9)(a)(I) OTHERDAMAGESINCURREDBYTHEOFTHIS ASSOCIATIONDUESECTIONANDANY TOOTHER THEDAMAGES INABILITYOFINCURRED BY THE ASSOCIATION TODUETO ACCESSTHE INABILITY OF THE ASSOCIATION 'STO ACCOUNTSACCESS ,THE MONEYASSOCIATION'S ,ACCOUNTS, PROPERTYMONEY, ,ORPROPERTY, OR INFORMATION SPECIFIED IN SUBSECTION (9)(a)(IOF(9)(a)(I) OF THIS SECTION;

(II) SALLPAYTOTHESHALL ASSOCIATIONTWOHUNDREDFIFTYDOLLARSPAY TOTHE ASSOCIATION TWO HUNDRED FIFTY DOLLARS FOR EACH BUSINESS DAY THAT THE FORMER ASSOCIATION MANAGEMENT COMPANY FAILS TO COMPLY WITH THE REQUIREMENT SET FORTH IN SUBSECTION (9)(a)(IOF(9)(a)(I) THISOF SECTION;AND (III)N ANY CIVIL ACTION TO ENFORCE THIS SUBSECTION(9)IFSECTION; THE FORMERASSOCIATIONMANAGEMENTCOMPANY 'SVIOLATIONISFOUNDTOBE WILLFUL ,SHALL BE LIABLE TO THE ASSOCIATION FOR TREBLE THE ASSOCIATION S ACTUAL DAMAGES PLUS THE ASSOCIATION 'S REASONABLE ATTORNEY FEES AND COURT COSTS .

AND (III) IN ANY CIVIL ACTION TO ENFORCE THIS SUBSECTION (9), IF THE FORMERASSOCIATIONMANAGEMENTCOMPANY'SVIOLATIONISFOUNDTOBE WILLFUL, SHALL BE LIABLE TO THE ASSOCIATION FOR TREBLE THE ASSOCIATION'S ACTUAL DAMAGES PLUS THE ASSOCIATION'S REASONABLE ATTORNEY FEES AND COURT COSTS.

Act subject to petition - effective date.date.This act takes effect a12:0I a.m.

Thison actthe takesday effectfollowing atthe 12:01expiration a.m.o f the PAGE 4-HOUSE BILL 26-1099 ninety-day period after final adjournment ofthe general assembly (August 12, 2026, if adjournment sine die is on May 13, 2026);

onexcept thethat, dayif followinga thereferendumpetition expirationis offiled thepursuantto PAGEsection 4-HOUSE1(3) BILLofarticle 26-1099V ninety-dayperiodofthe afterstate finalconstitution adjournmentagainst this act or an item, section, or part of this act within such period, then the act, item, section, or part will not take effect unless approved bythepeople atthe general assembly(Augustelection 12,to 2026,be ifheld adjournmentinNovember2026 sineand, diein issuch case, will take effect on Maythe 13,date 2026);ofthe official declaration of the vote thereon by the governor.

exceptJu that,'fiiiiil2'C ifJames aRashad referendumpetitionisfiledpursuanttosection1(3)ofarticleVofthestateColeman, constitutionSr. against this act or an item, section, or part of this act within such period, then the act, item, section, or part will not take effect unless approvedbythepeopleatthegeneralelectiontobeheldinNovember2026 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.