Regulation of Community Association Managers
Enacting HB 1078 will have a noteworthy impact on the management practices within common interest communities across Colorado. Proponents of the bill argue that it is crucial for protecting homeowners from potential financial mismanagement by ensuring that only qualified and vetted professionals manage community affairs. The legislation incorporates measures for maintaining transparency and accountability among licensed entities, setting the standard for professionals in the field to adhere to the state’s laws governing community associations. Additionally, if the bill passes, the Director of the Division will create a points-based disciplinary system to address violations among licensed managers, providing a structured response mechanism to manage infractions effectively.
House Bill 1078 proposes the regulation of community association managers (CAMs) in Colorado, aiming to establish licensure requirements for businesses conducting community association management. Starting July 1, 2025, it will become illegal for any business entity to provide such management services without obtaining a license from the Colorado Division of Real Estate. The bill outlines the necessary compliance criteria, including proof of insurance, a designated controlling manager, the payment of fees, and the submission of criminal history records for staff involved in CAM activities. This regulation intends to significantly optimize the governance of community associations, including homeowners’ associations (HOAs).
There are significant discussions surrounding the implications of establishing such regulatory measures. Advocates for the bill highlight its necessity in safeguarding homeowners' interests and holding CAMs accountable for mismanagement or unethical practices. Conversely, there may be opposition from those within the CAM industry who see this regulation as overly burdensome, potentially increasing operational costs and stifling smaller businesses in the market. Furthermore, the bill includes a sunset provision that will repeal the licensing requirement by September 1, 2029, pending a review to assess the efficacy and necessity of such licensing. This aspect could lead to future discussions on whether regulatory oversight is sufficient to protect stakeholders without hampering administrative efficiency.