Side Streets   Neighborhoods, people and issues

Sam and Maria Farran. Photo courtesy The Washington Post

Homeowners associations can get into big trouble by picking the wrong fight with the wrong homeowner.

Want to infringe on someone’s First Amendment rights? Think you can bully someone into taking down a political sign because they disagree with your politics? HOA boards need to be careful who they pick on.

Check out this story in the Washington Post.

It tells how an HOA board in the Olde Belhaven community in Washington D.C., picked a fight with Sam and Maria Farran over an Obama for President sign they put in their yard  in 2008.

The sign was  four inches taller than the maximum limit allowed by the association’s rules. One HOA board member, Don Hughes, took a hardline stance against the couple. He wrote a letter threatening to ask the HOA board to put a lien on their townhome unless they complied.

But Sam and Maria Farra refused to take it down. They argued their right to display the sign was protected by the Constitution. The board initiated fines in the hundreds of dollars. The couple sued, calling the fines vindictive.

Now, more than four years later, the HOA is being forced to pay Sam and Maria Farra’s legal costs as well as their own. The tab is $400,000 and the legal battle has ruined the HOA’s finances.

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Terry Bott thought she did everything right when she bought her home in Trail Ridge South neighborhood in Northgate in 2003.

“I read all the covenants,” said Bott, an accountant who works for a homebuilder. “There were some I didn’t like. I can’t have a clothes line, for example. I think that’s stupid. But I agreed to abide by it.

“I told myself I was willing to abide by everything in the covenants even though I didn’t like all the stuff.”

So she was angry in 2006 when the board of the Trail Ridge South Homeowners Association passed rules prohibiting homeowners from parking on neighborhood streets, which are public.  She’s been fighting the HOA ever since.

First, she volunteered to serve on the board to work for change.

After a couple of years she resigned, but has continued to challenge the rule, which allows guests to the neighborhood to park on the street. Just not homeowners.

Bott went back to her copy of the covenants, which govern things such as landscaping, paint colors, displays of signs and flags and changes to a home.

Every buyer in a covenant-protected neighborhood agrees to honor the covenants, which are enforced by volunteer boards that police the neighborhood. Often, property management companies are hired to collect dues, maintain commonly owned neighborhood parks, pools and rights-of-way and do the dirty work of enforcement.

Anyway, Bott studied the covenants, written by the developer in 2001, and found only one reference to parking.

“The covenants only say abandoned cars after five days and recreational vehicles can not park in the street,” Bott said.

Trail Ridge South resident Terry Bott says she studied the covenants before buying in the neighborhood in 2003 because she specifically wanted to be able to park in front of her home. She is upset the Homeowners Association board passed a rule in 2006 banning on-street parking by residents.

So I gave the covenants a look. I’m not exactly Stephen J. Hawking, but I can read. What I read left me puzzled. (Shocking, I know.) There was one paragraph on parking: Section 4.11 Restrictions on Parking and Storage.

Sure enough, it bans abandoned vehicles. It requires garage doors to be kept closed except “when in immediate use” by a vehicle. It goes on to say: “Boats, recreational vehicles, campers, motor homes, trailers and other such vehicles shall be kept in the garage” . . . “and shall in no event be parked on the streets” of the neighborhood.

The HOA board read that paragraph as permission to adopt a rule six years ago banning parking by home-owners.

Trail Ridge South HOA president Amy Umiamaka

HOA president Amy Umiamaka wasn’t on the board at the time. But she said the board was concerned about safety of children riding bikes and appearance.

“It sure does make the neighborhood look nicer,” Umiamaka said.

To appease Bott, she said, the HOA board finally solicited a legal opinion from attorney Lenard Rioth last fall.

In a November letter to the HOA, Rioth said he believed the rule prohibiting parking was valid. He concluded the “other such vehicles” language applies to car and trucks.

“It’s pretty straight-forward,” Rioth told me. “There’s plenty of case law to support the board.”

But another longtime HOA attorney, Jack Scheuerman, said it wasn’t so simple.

“Banning parking exceeds the authority they have under the covenants,” Scheuerman told me. “I think a judge would shoot it down.”

Shocking, isn’t it, that neighbors and lawyers all disagree?

Bott is convinced she has the right to park on the street and it doesn’t matter if a majority of her neighbors agree with the board’s actions.

I’ve talked to neighbors on both sides of the question. The community certainly is divided.

Some say it’s imperative to the safety of neighborhood children to keep cars off the street. Others say it’s unfair to allow guests to park on the street but not homeowners. Some have several teenage drivers and no room in their driveways for all the cars.

Bott seems determined to resolve the question of what Section 4.11 really means.

“I’m not going to drop this,” she said. “I resigned from the HOA board because I thought what they were trying to do was wrong.”

She said the dispute has led to heated board meetings and confrontations.

“I’ve been told by a board member that I should move if I do not like what they are doing. These guys need to be stopped.”

Here’s a guess: a judge ultimately will decide the definition of “other such vehicles.”

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                                                                           UPDATE — UPDATE —- UPDATE

In 2009, I introduced Side Streets readers to Ron Pace under a headline: “Pace is loose!”

In the column, I reported that a judge had described him as loud, profane and even annoying.

But the judge had sided with Pace in his battle over neighborhood covenants and assorted other issues with the Woodmen Hills Metro District, which has been a mess for years with its seemingly constant bickering, infighting, recalls and failed efforts to expand powers and fees.

At the time, Pace declared he was sick of the fighting. The disabled vet vowed to sell his house on the sixth fairway of the Antlers Creek Golf Course in unincorporated Falcon, northeast of Colorado Springs, and move.

I figured it would be the end of the story.

As usual, I was wrong.

Pace, 48, never did sell.

Instead, he stayed and remained a vocal critic of Woodmen Hills officials. He fought them over the way they enforce rules, conduct district business and more.

He probably should have moved. If so, he’d have saved thousands.

Pace and his wife are facing about $5,000 in legal fees  after he lost a fight over a restraining order filed against him in 2011 by a homeowners association manager who felt threatened by him.

But that’s only the half of it.

Pace and his wife again are preparing to go to court  in February over a $50 parking violation issued by the Filing 11 HOA that has ballooned to $4,600.

“My truck was parked on the side of my house like I’ve parked it since 2006,” Pace said. “They said it was eight to 18 inches past the front corner of our house and that’s not allowed.”

Seems outrageous to think any HOA would fine someone over such a petty infraction.

On Monday, Jan. 14, 2013, I heard from a Woodmen Hills Filing 11 HOA official who explained the HOA board’s side of the story.

Chris Galloway, vice president of the HOA, said the property manager noted the parking violation during a semi-monthly enforcement survey of the neighborhood.

Galloway said Pace was not singled out and easily could have remedied the violation without any fine.

“The first time we send a courtesy letter saying please take care of this,” Galloway said. “Then we send a warning letter. Finally, we send a third letter which is a fine ranging from $25 to $50.”

So how did it reach $4,600?

Galloway said Pace declined to deal with the HOA management company after his restraining order defeat. Instead, he called the HOA’s attorney directly.

“They warned him he’d incur attorneys fees personally,” Galloway said. “He circumvented the system.”

Of course, Pace sees it as a vendatta and, when we spoke in December, he declared: “This is retaliation.” Typically, he barked it, punctuated with profanity.

It’s this type of gruffness that has made some people who manage Woodmen Hills and serve on its board scared of Pace. They feel threatened by him. And he is prone to making veiled threats.

In his defense, some HOAs get out of control. Power-hungry board members sometimes punish people they don’t like and, as the judge in 2009 said, Pace isn’t always very likeable.

Once this latest mess is resolved, he has vowed again to leave.

“As soon as my kid graduates in the spring, I’m outta here,” he said. “I’ll be happy to leave.”

For everyone’s sake, I hope so.

Life is too short to spend it worried whether your truck is parked 18 inches too far from the house.

Follow this link to my Nov. 18, 2009, column about Ron Pace and Woodmen Hills.

To read an associated blog post about that column, click here.

For more information about Woodmen Hills, read this blog.

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If you volunteer on an homeowners association board, you better create a new email account, quickly, for HOA business only.

And be prepared to operate with greater accountability to your fellow homeowners.

A new state law taking effect Jan. 1, 2013 mandates new levels of transparency fromf HOA officers while its takes steps to protect the privacy of the 2 million Coloradans living in HOAs, or covenant-protected communities.

How much does the law change life in an HOA?

Consider those neighborly directories of names, phone numbers and email addresses of residents that are published by many HOAs. They can no longer be routinely distributed.

“Those kinds of directories now require written consent of the owners before they can be distributed,” said Lenard Rioth, longtime HOA attorney. “The new law requires personal identification and account information, including the telephone numbers and email addresses of owners, must be kept private.”

However the privacy protections in the bill, passed by the 2012 General Assembly, do not apply to board members. They are required to publish their own email addresses.  And they must be prepared to release all emails related to HOA business and decisions.

“My recommendation to all board members is that they get separate email addresses from their personal email accounts,” Rioth said. “If they use their personal email accounts for HOA business and there’s ever litigation, they may be forced by a judge to produce all their personal emails from their family and friends.”

The new law was contained in House Bill 1237, written by Rep. Angela Williams, D-Denver,  and the Community Associations Institute, an HOA management industry group.

It was a response to all the complaints about a lack of HOA board transparency, as reported by the HOA Information Officer last year.

It specifies which documents – covenants, bylaws, financial statements, board decisions — must be maintained, for how long and how quickly they must be produced by the state’s 8,000 HOAs. And it bars HOAs from demanding the purpose of an owner’s document request.

It lets boards meet and vote via the Internet. But online chats and votes must be documented and available for owner inspection.

And it declares as private HOA records of covenant violation actions.

“In the past, if an HOA cites an owner for say a barking dog violation, that owner will demand to see all the covenant violations actions for barking dogs in the last 30 years,” Rioth said. “They want to argue they are victims of selective enforcement action. This will prevent that selective enforcement defense.”

Now, get your email accounts set up and get written consent before you send out those directories!

Follow this link to the Colorado General Assembly’s final draft of House Bill 1237.

To read the Colorado Home Owners Association Law blog about the new law, click here.

This link takes you to a cheat sheet on the new law with all the details written by the Denver law firm Winzenburg, Leff, Purvis & Payne.

Click here to reach the Homeowners Association registry and complaint website. It is part of the Department of Regulatory Agencies, or DORA, in its Division of Real Estate.

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Carol Zier was shocked when she opened the letter from her Villages at Sand Creek Homeowners Association management company and discovered she was being ordered to paint the trim on her little shed.

And she was given just 30 days to get it done.

Carol was puzzled. The trim on her shed doesn’t need to be repainted. It’s not peeling or chipped.

That’s not the problem, according to the HOA.

Her trim is the wrong shade! It’s not an exact match to the trim on her home, the HOA declared.

And it doesn’t matter the trim has been the same color 12 years. Git ‘er done!

“I am just totally blown away by this,” Carol told me. “If you look at it, you wouldn’t even thing the shade is different.”

Carol assured me she wasn’t some covenant scofflaw who picked fights with the HOA. She’s always been a law-abiding HOA resident since she and her husband, Jerry, bought their home in 1999.

 Heck, she said, Jerry served on the HOA board before his death in 2003.

“I always pay my dues and I work hard to keep my home looking right,” Carol said. “And I never complain about things in the neighborhood they need to fix.”

So I drove out to her tidy home in the Villages at Sand Creek, a 141-acre, pie-shaped neighborhood off of Airport Road with about 500 homes developed in the late 1990s at the confluence of Sand Creek and its east fork. A city walking trail runs along the creeks with HOA-owned walkways providing access between a homes, including Carol’s.

In the evening sun, I studied the paint trim on Carol’s house and then on the shed.

I took some photos and brought them back to my editor, Dena, who studied them. She concluded the house trim was a “sandy” color and, by golly, the shed trim was more of a “putty.”

Her exact words: “The horror!”

She was being sarcastic. (She often gets that way when editing my columns.)

Anyway, I guess it’s true the colors don’t match.

But, really? Who has time to go around conducting CSI analyses of trim paint on hundreds of homes? If it’s so close that it escaped detection 12 years, why go after it now?

I called the HOA for an explanation.

Board member Bob Ricketts said the 12-year delay puzzled him, too.

And, I asked him, if the HOA can spot Carol’s trim mismatch, how did it miss the six-foot-tall fence along the HOA-owned walkway that runs next to her yard?

The wood on the fence is bare, ugly, rotting wood.

Even worse, Carol said a piece of the fence blew down last spring and the HOA declined to fix it saying it was her responsibility.

Ricketts said he was unaware of the fence issue and promised to look into it.

I’m guessing Carol will be forced to paint her shed trim long before that fence is ever painted. Wanna bet?

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Michelle Green

Michelle Green has worked in the homeowners association management business 15 years. She manages the Flying Horse Homeowners Association as an employee of Hammersmith Management.

 It’s more than just a job overseeing enforcement of covenants, collecting dues and hiring maintenance and landscaping crews.

Green has devoted many personal hours and money to taking classes and getting certified, by an industry peer review group, in various aspects of the business.

She’s proven her proficiency at record-keeping, handling financial statements, perusing insurance policies, navigating government regulations of HOAs and more.

In fact, this week she’s mailing in her final exam for grading as she tries to earn certification as a Professional Community Association Manager, or PCAM, from the Community Associations Institute, a nationwide umbrella group for managers like her. Green is a member of the Southern Colorado Chapter of CAI.

 Achieving PCAM status is the pinnacle of HOA management.

So it bothers her that a lot of people out there seem to wake up one morning and decide they are HOA managers and start trying to run large associations.

“Anybody can hang a shingle on the door and call themselves a management company with no previous experience,” Green said. “They’ve got the checkbooks for the associations. They are doing the financials. They should be monitored so associations don’t lose money or get embezzled.”

In fact, HOA fraud is problem. I’ve written about several HOAs victimized by crooks posing as managers.

But a more common problem is simple mismanagement by rookies which leads to huge legal and financial disputes within an HOA.

Complaints against HOAs are so widespread the Colorado General Assembly created the HOA Information and Resource Center to get a handle on the nature and seriousness of the problems. See previous blogs about the HOA office.

Aaron Acker, HOA Information Officer, spoke to a group of property managers on Feb. 15, 2011, in Colorado Springs.

After nearly a year of taking calls, Aaron Acker, the state HOA information officer, is preparing a report to be delivered to lawmakers during their 2012 legislative session.

Leaders of the CAI’s Rocky Mountain chapter fear the report to be a less-than-glowing assessment of HOAs. They expect shock and outrage. To minimize the anticipated fallout, they have made a preemptive strike.

Last week, the Colorado chapter of the CAI asked the state Department of Regulatory Agencies, or DORA, to initiate an investigation of HOA managers to determine if it’s time for them to join manicurists, barbers and boxers among the dozens of professions licensed and regulated by the state. Check out the list of all the professions licensed by the state!

Green is all for licensing and regulation.

“It would be beneficial for HOAs and their boards if managers were monitored and licensed,” she said. “Managers are handling thousands of dollars, if not millions. Nail technicians and hair stylists all have licensure. Why should someone managing your homeowners association be any different?”

Good question.

I also spoke to Chris Pacetti, a Denver-area manager who is also chairman of the Rocky Mountain CAI’s manager licensing committee. He says the group asked for the investigation by DORA in advance of Acker’s report.

Pacetti said licensing is not new. Nine states and Washington D.C. have enacted manager licensing or certification standards and seven more states are debating the idea.

His group envisions a two-prong test for managers.

One would test an applicant’s skills and knowledge in managing homeowners associations. The other would test for knowledge of Colorado law regarding HOAs.

They would be similar, Pacetti said, to the tests given for basic certification in the industry.

For example, to reach the first rung on the property manager certification ladder, Green took a two-day course followed by a 100-question multiple-choice test.

 Then came the CMCA or Certified Manager of Community Associations exam and another 100 questions. After she logged five years in the industry and passed those two tests, she took the AMS to earn accreditation as an Association Management Specialist.

Now she’s seeking the PMAC.

Green and Pacetti think it’s reasonable to expect every property manager to have a basic education and command of issues before taking the reins of a homeowners association.

But it’s not guaranteed that DORA will agree when it concludes its Sunrise study, likely in 120 days or so.

Attorney Jerry Orten tells me the Legislature studied the issue in 1990 and concluded that new rules were needed to bond managers and protect HOA finances by mandating separate accounts for finances and strict accounting to HOAs of their finances. But lawmakers did not order licensing.

Orten believes licensing would elevate the overall level of servivce to homeowners, resulting in fewer complaints to the new HOA information office.

To recommend licensing managers, DORA must decide the request satisfies three key criteria:

1. Whether the unregulated practice of homeowner association management harms the public and whether potential for harm is easily recognized.
2. Whether the public needs and can be reasonably expected to benefit from occupational competence.
3. Whether protection for homeowners can be achieved by other means in a more cost-effective manner.

 In other words, DORA must find that licensing is needed to protect the health safety and welfare of homeowner, that there is a public need and similar benefit is not available by other means.

Of course, if DORA declines to initiate licensing, individual lawmakers can bypass the agency and simply introduce a bill requiring it.

Stay tuned, HOA fans!

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Dietmar and Jean Voitel

Oh, and CAS pays an HOA attorney for collection services on delinquent accounts.

“They are collecting money and doing nothing,” Dietmar said. “How can this happen?”

It happens because the last board member to serve — before he sold his house and moved away in early 2010 — signed a contract with CAS authorizing it to handle HOA finances. The fine print included a clause that automatically renews the contract each year, whether there’s an HOA board or not.

CAS branch manager Greg Smith said he sympathized with Dietmar and shared his frustration.

“Mr. Voitel wants the association revived,” Smith said. “He wants a thriving community to help improve property values. He wants us to do inspections and covenant enforcement. But we can’t. We’re not authorized to do it.”

Most surprising is that the neighbors seem fine with it. In May, Voitel and his wife, Jean, contacted every neighbor, exposing the dues payments and trying to gauge their interest in the HOA. They also invited everyone to a meeting which Smith coordinated. Only one other homeowner showed up.

Jack Scheuerman, an attorney who represents 170 HOAs, said Canterbury is unique.

“I just don’t see this,” he said. “Apathy to this point is unusual. Usually, it’s just the opposite – people get too involved in their HOA.”

Scheuerman said it would an involved and expensive process to dissolve the HOA, which is a legal corporation with specific rules and fiduciary obligations and responsibilities.

It would be best, he said, if three homeowners took control by gathering support either through attendance at a special meeting or by collecting proxies.

Dietmar would like a thriving HOA. But he’d be happy with any decision of the neighborhood.

“I want things to run properly,” Dietmar said. “But we don’t necessarily need an HOA. If they want to dissolve it, let’s do it. But let’s stop paying for something that gives us absolutely nothing in return.”

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The Rocky Mountain chapter of the Community Associations Institute, an umbrella group for homeowners association boards and management companies, is offering an educational seminar Friday, April 29, for HOA boards and professionals focusing on surviving the economic downturn.

It’s open to the public and will provide tips for HOAs facing declining dues and experiencing neighborhood foreclosures, delinquencies and bankruptcies

“Running an HOA is like running a business,” said Brian Terhark, president of the Community Associations Institute – Rocky Mountain chapter.  “HOA boards and managers are trying to understand what the impact is to their bottom line.”

CAI reports a recent national survey found that more than half of the nation’s estimated 310,000 HOAs are enduring financial strain and 54 percent of the responding HOAs described their problems as “serious” or “severe.”

The conference Friday is designed to address questions including:

•  What is the role of the new Division of Regulatory Agencies HOA Information Office?
•  How can you secure a loan for your community?
•  What is the best way to collect delinquent assessments?
•  How should an HOA plan for natural disasters like a tornado, flood or hail storm?

The conference is part of  CAI-RMC’s annual Spring Showcase Conference.  Open to the public, this is the largest conference of its kind for Colorado HOAs and offers educational sessions to HOA managers, volunteer board members, homeowners and industry professionals who face increased challenges from the recession. 

The HOA conference is scheduled for 7:30 a.m. to 6 p.m., Friday, at the Wings Over the Rockies Air & Space Museum,    7711 East Academy Boulevard, Denver, 80230,  in Denver’s Lowry neighborhood.

For more information, go to www.hoa-colorado.org or call 303-951-4973.

Events Schedule – $70 registration fee includes:

• Breakfast and lunch
• Nine education sessions on:

• Delinquencies, Foreclosures and Deficits – Best practices for dealing with these issues
• Strategic Planning for an Emergency – How to prepare your HOA for a disaster
• 60 Questions in 60 Minutes – Free legal advice from leading HOA attorneys
• DORA Panel Discussion – Insight on the new HOA Information and Resource Office
• Managing the Basics of an HOA
• What I Wish I Would Have Known – Senior HOA managers share lessons learned
• Asbestos/Mold/Lead – How to identify and manage these hazards
• How to Build a Sense of Community Within Your HOA
• Close Encounters of a Dangerous Kind – How to handle fair housing requests

• Admission to the exhibit hall
• Complimentary conference bag and prizes

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Aaron Acker, director of Colorado's new HOA Information and Resource Center, speaks Tuesday, Feb. 15, 2011, in Colorado Springs to the Southern Colorado Chapter of the Community Associations Institute.

Colorado’s new HOA boss, Aaron Acker, came to Colorado Springs with a clear message for homeowners association board members and professional property managers: he and the new HOA Information Office and Resource Center are not the enemy. 

“We’re not going to be condo cops,” Acker said Tuesday in a speech to the Southern Colorado Chapter of the Community Associations Institute, the trade group for property managers and HOAs. 

“We are not a regulatory agency,” Acker said. “And we are not in the business of mediating disputes. 

“We are strictly an information-gathering agency and resource center for homeowners and for associations.” 

The crowd of more than 100 seemed wary, however, and even a bit suspicious of Acker. 

Acker said about 3,500 HOAs had registered so far, covering about 250,000 homes in Colorado. But he said many more need to get registered by logging onto his web site and paying the $8.95 fee. 

Finally, folks in Colorado have some place to turn besides Side Streets to report a rotten homeowners association!

The state has opened its HOA Information Office and Resource Center within the Division of Real Estate, which is under the umbrella of DORA — the Department of Regulatory Agencies in Denver.

The resource center actually invites folks to submit a complaint about their HOAs.

There’s just one catch . . . the resource center won’t investigate your complaint or your HOA, as I often do. (Nor will some irreverent, sarcastic smarty pants at the resource center write about your HOA as I do.)

It will simply log your complaint, along with all the others it receives, and report its findings to lawmakers.

Supporters hope, and critics fear, that it’s the first step toward strict oversight of the 12,000 or so HOAs operating statewide. 

So far, about 1,200 HOAs and management companies are registered. And you can search the database to see if your HOA is in compliance. It’s important to know if your HOA tries to file a lien against you. If the HOA hasn’t registered, it loses its right to file and enforce liens against its residents, said Marcia Waters, director of the Division of Real Estate.

In fact, HOA scofflaws may face civil lawsuits if they fail to register, Waters said.

The center was created in 2010 by the Colorado General Assemblyto get a handle on the growing issue of HOA abuse. 

Colorado Statehouse

It is the brainchild of Aurora Democrats Rep. Su Ryden and Sen. Morgan Carroll, who introduced and sponsored House Bill 1278 .

Originally, they envisioned creating an HOA ombudsman with power to investigate allegations of abuse by HOA boards as well as to mediate disputes.

Ultimately, lawmakers compromised and agreed to create the resource center, effective Jan. 1, 2011.

It requires each HOA to register with the center, which will gather data on HOAs and track complaints filed by the estimated 1.6 million Coloradans living in associations.

In addition, the center will serve as a clearinghouse for HOA board members and residents, providing basic information about the rights and responsibilities of property owners related to neighborhood covenants — rules governing everything from paint colors to landscaping and parking.

 The sponsors said the bill was a response to growing complaints from people living in covenant-controlled communities — neighborhoods, condos, townhomes and time-share complexes. Voluntary HOAs aren’t affected by the law.

The HOA Information and Resource Center is patterned after a state agency in Nevada, created in 1997 to help people resolve HOA disputes besides suing in civil court. Today its ombudsman has a $1.5 million budget and a staff of 15.

Follow this link to read a previous column on the HOA resource center.

And this link will take you to an earlier Side Streets blog on the topic.

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