First Regular Session
Seventy-fifth General Assembly
STATE OF COLORADO
INTRODUCED
LLS NO. 25-0200.02 Chelsea Princell x4335
HOUSE BILL 25-1123
House Committees Senate Committees
Judiciary
A BILL FOR AN ACT
C
ONCERNING ALTERNATIVE DISPUTE RESOLUTION FOR DISPUTES THAT101
ARISE BETWEEN A UNIT OWNER AND A UNIT OWNERS '102
ASSOCIATION.103
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov
.)
Under current law, common interest communities are encouraged
to use mediation prior to filing a complaint with the court. The bill
requires a dispute between a unit owner and a unit owners' association to
go through an internal dispute resolution process and mediation before the
parties can file a complaint with the court. If the parties are unable to
HOUSE SPONSORSHIP
Ricks and Joseph,
SENATE SPONSORSHIP
(None),
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law. reach a mediation agreement, the bill allows the parties to undergo
arbitration or commence a legal proceeding.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, repeal and reenact,2
with amendments, 38-33.3-124 as follows:3
38-33.3-124. Legislative declaration - purpose - mandatory4
alternative dispute resolution - definitions. (1) T
HE GENERAL5
ASSEMBLY FINDS AND DECLARES THAT THE PURPOSE OF THIS SECTION IS TO6
PROVIDE AN EFFICIENT, FAIR, AND COST-EFFECTIVE PROCESS FOR7
RESOLVING DISPUTES BETWEEN A UNIT OWNER AND A UNIT OWNERS '8
ASSOCIATION WHILE PRESERVING THE INTEGRITY OF COMMUNITY9
RELATIONSHIPS AND MINIMIZING THE BURDEN ON THE JUDICIAL SYSTEM .10
(2) A
S USED IN THIS SECTION, UNLESS THE CONTEXT OTHERWISE11
REQUIRES:12
(a) "A
RBITRATION" MEANS A BINDING PROCESS IN WHICH AN13
ARBITRATOR HEARS THE FACTS OF THE DISPUTE AND ISSUES A FINAL14
DECISION THAT IS ENFORCEABLE BY LAW .15
(b) "D
ISPUTE" MEANS ANY CONFLICT, CLAIM, OR DISAGREEMENT16
BETWEEN A UNIT OWNER AND A UNIT OWNERS ' ASSOCIATION REGARDING17
THE INTERPRETATION, ENFORCEMENT, OR APPLICATION OF THE COMMON18
INTEREST COMMUNITY'S GOVERNING DOCUMENTS , POLICIES, OR ACTIONS.19
"D
ISPUTE" DOES NOT INCLUDE A CONFLICT, CLAIM, OR DISAGREEMENT20
FILED PURSUANT TO PART 8 OF ARTICLE 20 OF TITLE 13, OR DISAGREEMENT21
THAT INVOLVES A DECLARANT OR AN AFFILIATE OF A DECLARANT .22
(c) "I
NTERNAL DISPUTE RESOLUTION " MEANS A PROCESS FOR23
RESOLVING CONFLICTS BETWEEN A UNIT OWNER AND A UNIT OWNERS '24
ASSOCIATION.25
HB25-1123-2- (d) "MEDIATION" MEANS A PROCESS THROUGH WHICH PARTIES1
INVOLVED IN A DISPUTE CONCERNING MATTERS ARISING UNDER THIS2
ARTICLE 33.3 MEET WITH A MEDIATOR TO DISCUSS THE MATTER , DEFINING3
AND ARTICULATING THE ISSUES AND THEIR POSITIONS ON THE ISSUES , WITH4
A GOAL OF RESOLVING THE DISPUTE.5
(e) "M
EDIATOR" MEANS AN INDIVIDUAL WHO IS TRAINED TO ASSIST6
THE PARTIES IN REACHING A MUTUALLY ACCEPTABLE RESOLUTION OF THE7
PARTIES' DISPUTES THROUGH THE IDENTIFICATION AND EVALUATION OF8
ALTERNATIVES.9
(3) A
DISPUTE BETWEEN A UNIT OWNER AND A UNIT OWNERS '10
ASSOCIATION ARISING UNDER THE PROVISIONS OF THIS ARTICLE 33.3 MUST11
UNDERGO INTERNAL DISPUTE RESOLUTION AND , IF NECESSARY, MEDIATION12
PRIOR TO THE COMMENCEMENT OF A LEGAL PROCEEDING .13
(4) (a) I
N THE EVENT OF A DISPUTE BETWEEN A UNIT OWNER AND14
A UNIT OWNERS' ASSOCIATION, EITHER PARTY MAY SUBMIT A WRITTEN15
REQUEST TO THE OTHER PARTY TO THE DISPUTE REQUESTING INTERNAL16
DISPUTE RESOLUTION. THE WRITTEN REQUEST MUST INCLUDE :17
(I) A
BRIEF DESCRIPTION OF THE DISPUTE BETWEEN THE PARTIES ;18
(II) A
NOTICE THAT THE PARTY RECEIVING THE REQUEST FOR19
RESOLUTION IS REQUIRED TO RESPOND WITHIN THIRTY DAYS AFTER20
RECEIPT OR THE REQUEST WILL BE DEEMED REJECTED ; AND21
(III) I
F THE PARTY UPON WHOM THE REQUEST IS BEING SERVED IS22
THE UNIT OWNER, A COPY OF THIS SECTION.23
(b) S
ERVICE OF THE REQUEST DESCRIBED IN SUBSECTION (4)(a) OF24
THIS SECTION MUST BE MADE THROUGH PERSONAL DELIVERY , FIRST-CLASS25
MAIL, EXPRESS MAIL, FACSIMILE TRANSMISSION, OR OTHER MEANS26
REASONABLY CALCULATED TO PROVIDE THE PARTY UPON WHOM THE27
HB25-1123
-3- REQUEST IS SERVED ACTUAL NOTICE OF THE REQUEST .1
(c) (I) A
PARTY UPON WHOM A REQUEST IS SERVED HAS THIRTY2
DAYS FOLLOWING SERVICE TO ACCEPT OR REJECT THE REQUEST . IF A3
PARTY DOES NOT ACCEPT THE REQUEST WITHIN THIRTY DAYS , THE4
REQUEST IS DEEMED REJECTED BY THE PARTY .5
(II) I
F A PARTY REJECTS A REQUEST TO PARTICIPATE IN INTERNAL6
DISPUTE RESOLUTION, THE PARTIES MUST SIGN A WRITTEN STATEMENT7
DETAILING THAT THE PARTIES ARE UNABLE TO PARTICIPATE IN INTERNAL8
DISPUTE RESOLUTION AND STATE WHICH PARTY REFUSED TO PARTICIPATE9
IN THE INTERNAL DISPUTE RESOLUTION MEETING .10
(III) I
F A PARTY REJECTS A REQUEST TO PARTICIPATE IN INTERNAL11
DISPUTE RESOLUTION OR DOES NOT RESPOND TO THE REQUEST , EITHER12
PARTY MAY START A LEGAL PROCEEDING .13
(IV) T
HE STATEMENT MUST BE FILED WITH THE COURT IF THE14
PARTIES START A LEGAL PROCEEDING . IF THE DISPUTE PROCEEDS TO15
COURT, THE COURT MAY TAKE THE PARTY 'S REFUSAL TO PARTICIPATE IN16
AN INTERNAL DISPUTE RESOLUTION MEETING INTO CONSIDERATION IN17
DETERMINING AN AWARD FOR ATTORNEY FEES .18
(d) I
F THE PARTY UPON WHOM THE REQUEST IS SERVED ACCEPTS19
PARTICIPATION IN DISPUTE RESOLUTION , THE PARTIES MUST SET A20
MUTUALLY AGREED UPON DATE AND TIME FOR AN INTERNAL DISPUTE21
RESOLUTION MEETING. IF EITHER PARTY INTENDS TO BE REPRESENTED BY22
AN ATTORNEY AT THE INTERNAL DISPUTE RESOLUTION MEETING , THAT23
PARTY MUST NOTIFY THE OTHER PARTY AT LEAST FORTY -EIGHT HOURS24
PRIOR TO THE INTERNAL DISPUTE RESOLUTION MEETING THAT THEY WILL25
BE REPRESENTED BY AN ATTORNEY . IF A PARTY FAILS TO PROVIDE26
ADVANCE NOTICE OF A PARTY 'S INTENT TO BE REPRESENTED BY AN27
HB25-1123
-4- ATTORNEY AT THE INTERNAL DISPUTE RESOLUTION MEETING , THE1
INTERNAL DISPUTE RESOLUTION MEETING MUST BE RESCHEDULED IF THE2
PARTY WHO DID NOT RECEIVE ADVANCE NOTICE REQUESTS THE MEETING3
BE RESCHEDULED.4
(5) (a) I
F THE PARTIES ARE UNABLE TO RESOLVE THE DISPUTE5
THROUGH INTERNAL DISPUTE RESOLUTION PURSUANT TO SUBSECTION (3)6
OF THIS SECTION, THE PARTIES MUST UNDERGO MEDIATION PRIOR TO7
STARTING A LEGAL PROCEEDING.8
(b) T
HE ASSOCIATION MUST PROVIDE THE UNIT OWNER WITH9
NOTICE OF MEDIATION WITHIN FOURTEEN DAYS AFTER THE COMPLETION10
OF THE INTERNAL DISPUTE RESOLUTION MEETING .11
(c) M
EDIATION MUST TAKE PLACE WITHIN THIRTY DAYS AFTER THE12
UNIT OWNER RECEIVES NOTICE OF MEDIATION .13
(d) T
HE MEDIATOR ASSIGNED TO CARRY OUT THE MEDIATION MUST14
BE AN IMPARTIAL THIRD PARTY AND MUST BE APPROVED BY BOTH PARTIES .15
(e) (I) I
F THE PARTIES CANNOT REACH A MEDIATION AGREEMENT16
WITHIN FOURTEEN DAYS AFTER MEDIATION BEGINS , THE MEDIATION17
PROCESS IS CONSIDERED UNSUCCE SSFUL AND THE PARTIES MAY PROCEED18
TO ARBITRATION OR MAY COMMENCE A LEGAL PROCEEDING .19
(II) I
F MEDIATION IS UNSUCCESSFUL, THE MEDIATOR MUST ISSUE20
A CERTIFICATE OF COMPLIANCE STATING THAT ONE OR MORE OF THE21
FOLLOWING CONDITIONS ARE MET :22
(A) T
HE PARTIES PARTICIPATED IN MEDIATION IN GOOD FAITH AND23
WERE UNABLE TO REACH A MEDIATION AGREEMENT ;24
(B) O
NE PARTY REFUSED TO PARTICIPATE IN MEDIATION ; OR25
(C) T
HE DISPUTE IS EXEMPT FROM THE REQUIREMENTS OF THIS26
SECTION PURSUANT TO SUBSECTION (6) OF THIS SECTION.27
HB25-1123
-5- (III) THE PARTY STARTING A LEGAL PROCEEDING MUST INCLUDE1
THE CERTIFICATE OF COMPLIANCE WHEN FILING WITH THE COURT .2
(IV) F
AILURE TO FILE A CERTIFICATE OF COMPLIANCE WHEN3
STARTING A LEGAL ACTION IS GROUNDS FOR AN OBJECTION OR A MOTION4
TO STRIKE, UNLESS THE COURT FINDS THAT DISMISSAL OF THE ACTION FOR5
FAILURE TO COMPLY WOULD RESULT IN SUBSTANTIAL PREJUDICE TO ONE6
OF THE PARTIES.7
(f) I
F A MEDIATION AGREEMENT IS REACHED , THE TERMS OF THE8
MEDIATION AGREEMENT MUST BE IN WRITING AND SIGNED BY BOTH9
PARTIES AND THE MEDIATION AGREEMENT IS ENFORCEABLE AS A10
CONTRACT.11
(g) T
HE COST OF MEDIATION MUST BE SHARED EQUALLY BETWEEN12
THE UNIT OWNER AND THE ASSOCIATION , UNLESS OTHERWISE AGREED13
UPON BY THE PARTIES.14
(6) T
HE REQUIREMENTS OF THIS SECTION DO NOT APPLY TO THE15
FOLLOWING:16
(a) A
DISPUTE INVOLVING A VIOLATION OF LOCAL , STATE, OR17
FEDERAL LAW;18
(b) A
DISPUTE INVOLVING A CLAIM OF DISCRIMINATION ,19
HARASSMENT, OR OTHER CIVIL RIGHTS VIOLATION;20
(c) A
CASE IN WHICH ONE PARTY SEEKS EMERGENCY RELIEF OR21
INJUNCTIVE RELIEF FROM THE COURT; OR22
(d) A
DISPUTE THAT HAS ALREADY BEEN ADJUDICATED IN COURT23
OR THROUGH ARBITRATION .24
(7) A
UNIT OWNERS' ASSOCIATION SHALL, ON AN ANNUAL BASIS,25
PROVIDE WRITTEN NOTICE TO EACH OF ITS UNIT OWNERS STATING THAT26
THE FAILURE OF A UNIT OWNER TO COMPLY WITH THE ALTERNATIVE27
HB25-1123
-6- DISPUTE RESOLUTION REQUIREMENTS OF THIS SECTION MAY RESULT IN THE1
LOSS OF THE UNIT OWNER'S RIGHT TO SUE THE UNIT OWNERS' ASSOCIATION2
REGARDING ENFORCEMENT OF THE GOVERNING DOCUMENTS OR3
APPLICABLE LAW.4
SECTION 2. Safety clause. The general assembly finds,5
determines, and declares that this act is necessary for the immediate6
preservation of the public peace, health, or safety or for appropriations for7
the support and maintenance of the departments of the state and state8
institutions.9
HB25-1123
-7-