DENVER (CBS4)- There are more than 7,500 homeowners' associations in Colorado. They govern more than 2 million people. HOA's are big business. And when neighbors are governing neighbors there are bound to be problems.
"Spending my money for other people's expenses, didn't sit well," Karen Templeton said of her homeowners' association.
"They wouldn't let me see the books… could not see the books. I questioned financial statements, they wouldn't tell me answers," Jim Burneson said of his HOA.
"Where did the money go? What's going on?" said Sue Williams about her HOA
A group of homeowners met with CBS4 to discuss their problems with their various homeowner's associations. They represent several neighborhoods but describe the same sort of issues. Conflicts in homeowner's associations can get petty and personal.
"It had gotten so tenuous, they hired an attorney and got a PPO from the court, permanent protection order, that I was not to annoy the board of directors," Burneson told CBS4.
In the state of Colorado, HOA's are free to regulate practically anything, as long as they don't violate state and federal fair housing laws regarding age, race or handicapped access. They're very powerful with the authority to assess fines, impose liens, and even foreclose on a home.
In 2005, Colorado lawmakers tried to balance the power with the Colorado Common Interest Ownership Act, a bill of rights for homeowners. Since the Act went into effect, lawmakers have found that it's not enforceable. A violation doesn't fall under the criminal justice system. State regulatory agencies have no jurisdiction. A homeowner's only recourse is to take civil action and that takes money.
"The money and financial resources tends to reside with the HOA and the board. If you fight them they're using your dues," said Colorado Senator Morgan Carroll.
There are certain steps a homeowner can take when they're about to engage in battle with their HOA.
- Read the bylaws - they change and update on a regular basis, so make sure you have the latest version
- Engage your neighbors – the more people who back you – the more likely the HOA will come around to your way of thinking
- Write a letter – try to persuade your board and keep a record
Carroll recognizes homeowner's frustrations with HOA's. In January, she helped create the HOA Information Office through the Division of Real Estate at Colorado's Department of Regulatory Agencies (DORA). The office provides basic information about HOA's, tracks complaints, and requires all HOA's to register with the state.
"We've got tremendous positive feedback from the information we've been providing to homeowners regarding their rights and responsibilities under the law," said Aaron Acker of the HOA Information Office.
The office has no authority under the law to fix problems and that is a cause of concern for homeowners with complaints.
"That office is just collecting complaints, they can't do anything. What's the point?" said Williams
"Does the HOA Information center… does it go far enough?" CBS4 Consumer Investigator Jodi Brooks asked Senator Carroll.
"No," Carroll replied.
But the Senator points out that for the first time problems are being identified and recorded. That means that if further legislation is needed, the data to back up the new laws will be there.
"It tells policy makers how broad and deep is this problem? Is this happening in one or two HOA's or is this something that appears to be more system wide?" Carroll explained.
Mediation is another option for those homeowners who are fighting their HOA. Colorado has an HOA Mediation Board through the State Judicial Department. It requires two willing parties and costs about $75 an hour. If mediation doesn't work, you can resort to the courts.
Civil litigation doesn't always go the way you want it to. Jim Burneson sued his HOA and lost. He even ended up going to jail.
"I called him a tort twister, and they found that that was an annoyance, so they sent me to jail for 60 days in the Arapahoe County jail."
He served 31 days. He and other Colorado homeowners hope to see the day when lawmakers pass sweeping reform of HOA's.
"I want to see state oversight, " said Stephen Richardson, an HOA member.
"You need checks and balances. There is no checks and balances," said Dan Garcia, an HOA member.
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