As the title of this post suggests, as of July 1, 2018, there are big changes coming to those communities formed before July 1, 1992. Seemingly out of the blue, our legislature this year decided with little fanfare that it was time to undertake a relatively significant amendment to the budget provisions of the Colorado Common Interest Ownership Act. House Bill 18-1342, which passed out of the legislature and is now sitting on Governor Hickenlooper’s desk (and which is expected to be signed, or in the absence of a veto will automatically become law), requires ALL non-exempt Colorado community associations, with certain limited exceptions, to follow the budget consideration process set forth in CCIOA. The exceptions apply to communities formed before July 1, 1992 where the declaration sets a maximum assessment amount or limits increases in an annual budget to a specific amount and the budget proposed by the executive board does not exceed the maximum amount or limits set in the declaration.
All other non-exempt communities must follow the CCIOA budget consideration process. Paraphrasing CCIOA, this requires that the Association’s board of directors adopt the budget, and within 90 days after that, mail or otherwise deliver a summary of the budget to all owners in the community and set a date for a meeting of the owners to consider the budget. The meeting must occur within a reasonable period of time after the mailing or deliver of the budget. Notice of the meeting must be given as required by the community’s bylaws. Unless the declaration requires otherwise, the budget proposed by the board of directors does not require approval of owners, and it is deemed approved by the owners in the absence of a veto at the meeting by a majority of owners or any larger percentage of owners specified in the declaration.
Okay – the plain English version: (1) the board adopts the budget; (2) the budget (or a summary is mailed to all owners; (3) the board calls a meeting of the owners, following the notice provisions of the community’s bylaws; (4) owners have a right to veto the budget (this is not a right of disapproval!) by at least a majority of ALL owners, or any higher percentage specified in the declaration; (5) if the owners fail to veto the budget, it is automatically approved.
This will be a big change in how many pre-July 1, 1992 communities operate. Again, this law is effective this coming July 1. This process is not required to be followed if the community’s declaration already sets a maximum assessment amount or limits increases, and the proposed budget doesn’t exceed those amounts.