Concerning protecting the financial condition of common interest communities.
Summary
HB26-1099 would add new protections for the financial health and recordkeeping of common interest communities in Colorado, including planned communities and condominiums. The bill requires a declarant, before transferring control of a new community to the owners’ association, to commission and pay for an independent reserve study that projects the cost of maintaining, repairing, and replacing common elements over a 30-year period. The reserve study must be updated as the project is built in phases, and a final version must reflect the community as completed.
The bill also requires disclosure and transfer of that reserve study to purchasers and the association. Before control transfers, prospective buyers must receive the study at least 24 hours before closing; after transfer, the association must make it available to unit owners on reasonable notice. In addition, the declarant must contribute 1.5% of the amount needed to fully fund reserves at or before transfer of control, and the reserve study must be included among the materials turned over to the association when control shifts from the declarant.
Impact
The bill amends the Colorado Common Interest Ownership Act by adding new declarant duties, expanding association disclosure obligations, and strengthening turnover requirements. It creates a statutory reserve-study requirement for new planned communities and condominiums, adds the most recent reserve study to the list of records associations must disclose to owners, and requires declarants to deliver the reserve study as part of the turnover package. It also imposes new penalties on former association management companies that fail to timely return association property and records, including daily monetary penalties, liability for resulting late fees and damages, and treble damages plus attorney fees and costs for willful violations.
Sentiment
The available context suggests the bill was treated as a consumer- and homeowner-protection measure aimed at improving transparency and long-term financial stability in common interest communities. The fact that it was enacted and signed by the governor indicates overall support for the policy direction. No committee transcript or recorded vote details were provided, so there is no evidence in the supplied materials of organized opposition or divided sentiment.
Contention
The main points of potential contention are the new costs and compliance burdens placed on declarants and association management companies. Declarants must pay for reserve studies and contribute to reserve funding before turnover, which could be viewed as increasing development costs. Management companies face strict 45-day turnover deadlines and significant penalties for late delivery of records, including daily fines and enhanced damages for willful noncompliance. On the other side, the bill appears designed to address concerns from homeowners and associations about underfunded reserves, incomplete disclosures, and difficulty obtaining records after management transitions.