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Colorado's 71st General Assembly Ends!

Posted by: Luke Miller on Wednesday, May 17, 2017

The 2017 legislative session proved to be a very active one for the Colorado Apartment Association. The House Democrats introduced a "housing package" which included a number of bills focused on regulating landlord practices and behavior. While the Association built good-will by working with proponents of these bills in an attempt to address their concerns, most of the legislation ultimately died in the Republican-controlled Senate. Affordable housing remains a hot topic, with a handful of bills introduced this year to attempt to create an affordable housing fund. The Speaker of the House requested an interim committee to study affordable housing but that failed to pass with no Republican support. It was definitely a year for developing new relationships with newly elected legislators, and the Association certainly took advantage of the opportunity to do that.

LEGISLATION CRITICAL TO THE MULTIFAMILY INDUSTRY

SB17-086 (Fenberg) Authorize Local Government Inclusionary Housing Programs (Rent Control)

Under current law, local governments are prohibited from enacting any ordinance or resolution that would control rent on any private residential property or housing unit. The bill attempted to clarify that this prohibition would not include ordinances or resolutions that require inclusionary housing or inclusionary zoning as a condition of obtaining approval for a development project. The bill defined inclusionary housing or inclusionary zoning as a program that requires the provision of residential units affordable to and occupied by owners or tenants

whose income does not exceed a limit that is established by the ordinance or resolution. These programs could include: requiring property owner or developer to set aside a percentage of units that are affordable to households with certain incomes; offering incentives to property owners or developers for setting affordable rents; providing alternate options for a property owner or developer, such as cash-in-lieu of affordable units or dedicating land to the local government; targeting a specific income range to benefit from inclusionary programs; and specifying the time period that housing must stay affordable.

Position: Oppose
Outcome: Postponed Indefinitely

HB 17-1035 (Jackson/Cooke) Sex Assault And Stalking Victims May Break Leases

This bill allows victims of unlawful sexual behavior or stalking to vacate a residential lease due to fear or imminent danger under the same conditions that current law provides to victims of domestic violence or abuse. The bill prohibits a residential lease from penalizing a tenant for emergency calls in response to a situation involving unlawful sexual behavior or stalking. It also provides that is not tenant misconduct if the tenant is a victim of and the property damage is a result of unlawful sexual behavior or stalking, and the victim provides evidence to the landlord. The bill specifies that the acceptable documentation a tenant may provide to a landlord as evidence of unlawful sexual behavior, stalking, domestic abuse, or domestic violence includes a recent police report, valid protection order, or a statement from an application assistant from the Address Confidentiality Program who has consulted with the victim. Tenants who are victims of unlawful sexual behavior, domestic abuse, or domestic violence may also provide a statement from a medical professional to a landlord. In addition, the bill specifies that if a tenant notifies a landlord that the tenant is a victim of unlawful sexual behavior, stalking, domestic violence, or domestic abuse, or terminates a lease as a result of being a victim of the specified crimes and provides the landlord with his or her new address, the landlord may not disclose the fact that the tenant is a victim of the specified crimes, or the tenant's new address, unless required to so by law, or the victim consents.

Position: Monitor
Outcome: Sent to Governor
Effective Date: Upon Signature

HB 17-1095 (Melton/Kagan) Service Of Process To Secured Dwellings

This bill attempted to provide guidelines for the service of process when access to a residential community is denied by security, and authorize alternative service of process delivery methods. As introduced, it would have essentially required the community's "gate-keeper" to accept service and deliver it to the resident. As amended in committee it would have required property managers to adopt a policy concerning how process servers will be allowed into the community. The bill met with opposition from a number of groups and was amended a number of times but not enough to satisfy the opponents.

Position: Oppose
Outcome: Postponed Indefinitely

HB 17-1159 (J. Becker/Cooke) Remedies For Forcible Entry And Detainer

This bill added to the definition of "forcible detainer" the act of preventing an owner or person authorized by the owner from accessing or possessing his or her property by locking or changing the lock on the property. It allowed plaintiffs alleging an act of forcible entry or detainer to seek a temporary, mandatory injunction ordering that the property be returned to them. The bill created two new crimes: unlawful occupancy and unlawful reentry. A person commits unlawful occupancy if he or she forcibly enters an uninhabited or vacant dwelling knowing he or she is unauthorized to do so, with the intention of taking up residence or providing the dwelling as a residence for someone else. Unlawful occupancy is a class 1 misdemeanor. For a second or subsequence offense, the maximum fine is increased to $25,000. A person commits unlawful reentry if, knowing that the owner recovered possession of the property in a civil action, he or she reenters the property without authorization or permission. Unlawful reentry is a class 1 misdemeanor, except that the maximum fine is increased to $25,000. This bill was brought forward by the Realtors to discourage "squatting," but it faced widespread opposition so the Realtors backed off and let the bill die.

Position: Monitor
Outcome: Postponed Indefinitely

HB17-1169 (Leonard/Tate) Construction Defect Litigation Builder's Right to Repair

Under current law, before a claimant can bring suit against a builder for alleged construction defects, the claimant must notify the builder of the intent to bring suit, and allow the builder and his or her sub contractors reasonable access to the property to inspect the claimed defect. Following this inspection, the builder may offer to settle the claim with a monetary offer, or agree to remedy the claimed defect but the claimant does not have to allow the builder to remedy the claimed defect. This bill would have changed current law to give the builder the option to elect to complete a repair. Under the bill, if the builder elects to complete a repair then the claimant must provide the builder access to the property to effectuate any repairs. If the right to repair is elected then the completion of the repairs cannot be conditioned upon the claimant releasing any claims against the builder. Thus, the change would have given the builder the opportunity to fix the claimed defects. The bill was immediately assigned to the House State Affairs committee, where it was summarily killed.

Position: Monitor
Outcome: Postponed Indefinitely

HB 17-1185 (Singer/Smallwood) Reports Of Suspected Child Abuse Or Neglect

The bill adds officials and employees of county departments of health, human services, or social services to the list of mandatory reporters of child abuse. It also allows these county employees to receive certain follow up information about children about whom they file a report of child abuse or neglect if they continue to be officially and professionally involved in the ongoing care of the child. The bill expands the period for county departments of human services to provide such follow up information to all eligible mandatory reports from 30 days to 60 days after the report of child abuse and neglect is filed. There was brief discussion about adding landlords to this list but that idea was quickly dismissed.

Position: Monitor
Outcome: Sent to the Governor
Effective Date: September 1, 2017

HB17-1279 (Garnett, Saine/Guzman, Tate) Construction Defect Actions Notice Vote Approval

Before an executive board of a homeowners association (HOA) can initiate a construction defect lawsuit, this bill requires that the board first (1) notify all unit owners of the HOA and the builder(s) of the development of any plans to bring a construction defect lawsuit; (2) convene a meeting for the board and the developer to present relevant facts and arguments to HOA unit owners; and (3) obtain the approval of a majority of the unit owners. The bill dictates various disclosures that must be included in the notification to HOA unit owners and construction professionals, and sets deadlines for the board to provide the notifications, convene a meeting, and collect votes for or against a construction defect lawsuit. This bill is considered by many to be a "grand compromise" on construction defects reform. Time will tell.

Position: Monitor
Outcome: Passed Both Chambers
Effective Date: Upon Signature

HB 17-1305 (Foote, Melton/Guzman) Limits On Job Applicant Criminal History Inquiries

This bill, commonly referred to as "ban the box," prohibited an employer from stating in a job posting or on any form of application that a person with a criminal history may not apply or from inquiring into or requiring disclosure of an applicant's criminal history on an initial application. These rules do not apply if an employer is advertising a position that federal, state, or local law prohibits individuals with specific criminal convictions from holding. The bill also exempted any employer hiring as part of a program to encourage the employment of people with criminal histories. An employer may obtain a criminal background report during any stage of the hiring process.

Position: Monitor
Outcome: Postponed Indefinitely

HB17-1309 (Winter, Jackson/ Coram, Guzman) Documentary Fee to Fund Affordable Housing

Under current law, when the total amount paid by the purchaser on a real property transaction exceeds $500, the county clerk and recorder collects a one cent documentary fee for each $100 of the amount paid for the recording of a real estate deed or other documents. The bill increased the documentary fee to two cents per $100 and required 50 percent of the fees generated to be used as prescribed by current law and 50 percent to be deposited in the newly created Statewide Affordable Housing Investment Fund (fund), administered by CHFA. The bill specified that moneys in the fund, as allocated by CHFA, must be used for new or existing programs that: facilitate the construction or rehabilitation of residential affordable housing units; and provide financial assistance to a nonprofit or political subdivision that make loans to households for the financing, purchase, or rehabilitation of residential housing. The bill defined affordable housing as housing that is affordable for households with an income that is up to 80 percent of the area median income for rental occupancy and up to 110 percent for home ownership. It also specified that a portion of the funds be used for programs that serve counties with a population of 175,000 or less. HB 17-1309 was supported by many, including local governments and housing providers. However, it was opposed by the Realtors and therefore made it through the House easily but was killed by the Senate State Affairs committee during the final days of the session.

Position: Monitor
Outcome: Postponed Indefinitely

HB17-1310 (Jackson, Kennedy/Fenberg) Residential Landlord Application Screening Fee

As introduced, this bill would have limited the application screening fee that a landlord can charge to a prospective tenant, to a fee that covers only the landlord's actual costs. It also required landlords to provide prospective tenants who have paid the fee with either a disclosure of anticipated expenses or an itemized receipt of actual expenses. If the fee exceeded the actual screening costs, the landlord was required to return the overage amount to the tenant. A landlord that violated any of these provisions would be liable to his or her tenant for two times the amount of the application screening fee, plus court costs and reasonable attorney fees. The bill was amended in the House to only require a landlord to disclose the application fee and what it entails, but still included the penalty and attorney fees therefore the amendment was not enough to persuade the Apartment Association to drop its opposition to the bill. The bill passed the House then was assigned to the Senate State Affairs committee, where it was quickly postponed indefinitely.

Position: Oppose Unless Amended
Outcome: Postponed Indefinitely

HB17-1312 (Exum, Benavidez/Moreno) Residential Lease Copy and Rent Receipt

When a written rental agreement is in place, the bill required the landlord of a residential premise to provide each tenant with a copy of the executed rental agreement within seven days of it being signed. As introduced, upon receiving any payment made by a tenant, the landlord also was required to provide the tenant with a receipt. After lengthy discussions between the Apartment Association and the bill sponsors and proponents, the bill was amended to clarify that receipts would be required for cash payments made in person, and for money orders upon request. It also clarified that a monthly statement counts as a receipt. Despite the Apartment Association going neutral on this bill, after it passed the House it was assigned to the Senate State Affairs committee where it was killed during the final days of the session.

Position: Oppose Unless Amended
Outcome: Postponed Indefinitely

HB 17-1334 (Melton) Registration Process Servers

This bill required a person acting as a process server to be registered with the Department of Regulatory Agencies (DORA) by February 2018. Any person who serves process or presents him or herself as a process server without an active registration commits a class 2 misdemeanor. Subsequent offenses are a class 1 misdemeanor. Certified peace officers who serve process do not need to register. The registration required by this bill would have been quite costly to process servers, including private investigators who serve process.

Position: Monitor
Outcome: Postponed Indefinitely

HB 17-1364 (Arndt/Hansen) Authority Local Government Master Plan Include Water Plan Goal

Under current law, local governments and other public water suppliers are required to adopt a water use master plan to encourage the efficient use of publicly supplied water among consumers. These water plans are then incorporated into county and municipal master development plans. If a local government's master plan includes a water element, this bill required that the element include water conservation policies, which may include goals specified in the state water plan, and may also include policies to implement water conservation and other state water plan goals as a condition of development approvals, including subdivisions, planned unit developments, special use permits, and zoning changes.

Position: Monitor
Outcome: Postponed Indefinitely

SB17-45 (A. Williams, Grantham/Wist, Duran) Construction Defect Claim Allocation of Defense Costs

In civil suits brought to court as a result of an alleged construction defect, this bill allowed an insurance company to request that the court apportion the defense costs (e.g., attorney fees) equitably among all liability insurers who have a duty to defend against the claim. The bill required that the district court set the contribution claim within 90 days after the filing of the action, and promptly resolve the case. The district court would be required to enter such orders as are necessary to hold an expedited evidentiary hearing. Following a final judgment resolving all claims, the bill authorized any insurer to apply to the district court for a final apportionment of the defense costs, and required the district court equitably to allocate defense costs among the insurers. This bill was introduced at the very beginning of the session and touted by the Senate President and House Speaker as a great bill to address construction defects reform. Stakeholders did not agree and as a result the bill spent literally months awaiting its hearing in Senate Appropriations.

Position: Monitor
Outcome: Postponed Indefinitely

SB 17-085 (Zenzinger) Increase Documentary Fee & Fund Attainable Housing

Under current law, county clerk and recorder offices are authorized to collect a $3 surcharge for each recording or filing the county receives. Beginning January 1, 2018, the bill increased the surcharge by $4 per document, to be deposited in the newly created Statewide Attainable Housing Investment Fund (fund). The fund was created in and administered by the Colorado Housing and Finance Authority (CHFA). Of the moneys in the fund, up to 25 percent must have supported new or existing programs that assist households earning an income of up to 80 percent of the area median income with financing, purchasing, or rehabilitating single family homes. Programs could include those making loans to such households for specified purposes. Any money in the fund at the end of the fiscal year must have remained in the fund and money in the fund may not be transferred to other funds in CHFA.

Position: Monitor
Outcome: Postponed Indefinitely

SB 17-098 (Kefalas/Ginal) Mobile Home Parks

This bill modified state laws related to mobile home park sales, and resolution of disputes between mobile home park owners, managers, and homeowners. Under current law, a mobile home park owner must notify all mobile homeowners, as well as the city or county government in which the park is located, if the owners intends to sell the park or change the use of the land. The bill added notification requirements for a mobile home park in which a homeowners association (HOA) or cooperative has been formed. It also provided that, during the notice period, the park owner may consider an offer to purchase the park by an HOA or cooperative, as long as the HOA or cooperative is open to all homeowners. If an agreement is reached, the HOA or cooperative would have time beyond the period to obtain financing for the purchase. The bill did not give a homeowner or group of homeowners any right of first refusal. Under current law, mediation may be used to resolve disputes between park management of and homeowners in a mobile home park. The bill specified that other forms of alternate dispute resolution may also be used, and encouraged the use of the Office of Dispute Resolution in the Judicial Department, as well as local government or nonprofit agencies that provide dispute resolution services. In addition, the bill authorized rental agreements to contain a clause encouraging the use of alternative dispute resolution among park owners, management, and homeowners within mobile home parks. Additionally, the bill required that city and county master plans or other land use documents encourage the preservation of existing mobile home parks and development of new manufactured home parks.

Position: Monitor
Outcome: Postponed Indefinitely

SB17-155 (Tate/Saine) Statutory Definition of Construction Defect

This bill attempted to define the term "construction defect" to mean a defect in the design or construction of any improvement to real property that causes damages to or the loss of use of personal property, or causes personal injury. The bill sponsors intended for the bill to be a placeholder in the event that stakeholders came up with a good, useful definition for "construction defect." Other construction defect legislation took priority and this bill fell between the cracks and ultimately did not move forward.

Position: Monitor
Outcome: Laid Over to May 11 (dead)

SB17-156 (Hill/Saine, Wist) Homeowners' Association Construction Defect Lawsuit Approval Timelines

The bill would have required that a homeowners' association (HOA) use mediation or arbitration before a lawsuit could be filed in disputes involving construction defects against a development party. The bill provided as follows: If an HOA has governing documents that require mediation or arbitration at the time of construction, the HOA must adhere to that original policy in construction defect cases. The parties involved in a dispute must mutually agree upon a mediation or arbitration service provider, with preference given to a provider specified in the HOA governing documents. The bill detailed the alternative dispute resolution process. In addition to submitting to mediation or arbitration before filing a lawsuit, the bill required the HOA's executive board to send an advance notice to all unit owners that includes a general description of the claim, the relief sought, and a good-faith estimate of the benefits and risks involved in a format outlined in the bill. It also required that the HOA's executive board must obtain signed, written consent from a majority of the unit owners acknowledging that the owner has received the notice required under the bill and approves of the board's proposed action. Prior to the purchase and sale of property in an HOA, the bill required that a disclosure notice inform the purchaser that he or she is required to become a member of the HOA, and that the community bylaws may require that certain disputes be resolved by mandatory binding arbitration. The bill also added notice requirements for lawsuits initiated by HOAs in matters other than construction defect claims. Specifically, it required that the HOA provide notice to unit owners at least 30 days prior to commencement of the legal action. This is the bill that was brought forward and supported by the Homeownership Opportunity Alliance (coalition in support of construction defects reform). It passed through the Senate easily, but was sent to the House State Affairs committee, also known as the "kill" committee, where it died the day after the same committee passed HB 17-1279.

Position: Monitor
Outcome: Postponed Indefinitely

SB17-157 (A. Williams/Melton) Construction Defect Actions Notice Vote Approval

Before an HOA can bring a lawsuit against a developer or builder in a construction defect case, this bill required that the HOA's executive board first obtain approval from a majority of the unit owners. In seeking prior approval, the bill detailed various disclosures that must be made to unit owners, including details about the lawsuit, and its potential costs and benefits. The bill limited the amount and type of contact that a developer who is subject to the lawsuit may have with the unit owners in the HOA. Prior approval by unit owners not required for cases in which the alleged construction damages are valued under $100,000. The Homeownership Opportunity Alliance opposed this bill, which was strikingly similar to language offered by the trial lawyers during the construction defects negotiations last year.

Position: Monitor
Outcome: Postponed Indefinitely

SB17-215 (Priola/Gray) Sunset Licensed Real Estate Brokers & Subdivision Developers

This bill continues the regulation of real estate brokers and subdivision developers by the Real Estate Commission (commission) in the Department of Regulatory Agencies (DORA) for nine years until September 1, 2026, and implements recommendations from the 2016 DORA sunset review of the Division of Real Estate. Among its many changes, the bill: creates a license endorsement for real estate brokers who also act as property managers, conditioned on prescribed education and requiring a financial surety; requires the commission to adopt rules for the number of transactions that must be completed by a real estate broker that employs other brokers; consolidates several cash funds used by the Division of Real Estate into a single cash fund; and modifies the composition of the commission to require that one of the three broker members have experience with and actively practice property management. As introduced, SB17-215 required a new property manager "endorsement" that was recommended in the Sunset report from the Department of Regulatory Agencies. The Apartment Association and NAIOP joined other stakeholders in opposing this provision and ensured that it was amended out of the bill.

Position: Oppose Unless Amended
Outcome: Sent to Governor
Effective Date: July 1, 2017

SB 17-216 (Gardner/Lontine, K. Becker) Sunset Continue Fair Debt Collections Act

The bill continues the Colorado Fair Debt Collection Practices Act for 11 years, through September 1, 2028, and implements the recommendation from the Department of Regulatory Agencies' (DORA) sunset report that the Collection Agency Board be repealed. The bill also makes clarifications to debt collection laws that apply to consumer debts bought or sold on or after January 1, 2018. It defines the term "debt buyer"; makes debt buyers exempt from bond requirements, with an exception for debt buyers that provide third-party debt collections; and outlines the legal process for actions on debts owned by a debt buyer by a debt collector or a collection agency. The bill also clarifies that the one-year statute of limitations on debt collection-related actions applies to private actions, and a two-year statute of limitations applies to public actions brought by the Administrator of the Uniform Consumer Credit Code. Finally, the bill requires the administrator to prepare a biannual report to be submitted to the Judiciary committees of the General Assembly and published online on the Attorney General's website by July 1 and December 1 of each year. The report must address enforcement actions, complaint outcomes, and how changes to the program relate to industry and customer concerns, as well as several other detailed requirements outlined in the bill. In addition, to promote information sharing, the administrator must host biannual meetings to share the report and attend a variety of other meetings, as outlined in the bill. The bill's reporting and meeting requirements are repealed July 1, 2020.

Position: Monitor
Outcome: Passed Both Chambers
Effective Date: Upon Signature

SB17-245 (Priola/Pabon) Tenancies One Month to One Year Notice

Under current law, a residential tenancy of one month or more but less than six months may be terminated by either party with seven days notice. This bill extends the notice to 21 days. The bill also requires 21 days notice for a landlord to increase rent in tenancies of one month or longer, but less than one year, and where there is no written agreement between the landlord and the tenant.

Position: Monitor
Outcome: Sent to Governor

Effective Date: August 9, 2017

SCR17-002 (Kefalas) Real Estate Transfer Tax for Affordable Housing

This concurrent resolution refers a constitutional amendment to voters in the November 2017 election to approve a new 0.1 percent transfer tax on the sale of real property beginning in 2019. New revenue from the tax is dedicated to affordable housing. The new tax is collected by the County Clerk and Recorder when a deed is recorded. Counties may retain up to 5 percent of the new tax, with remaining revenue deposited in the state Housing Investment Trust Fund to be administered by the Division of Housing within the Department of Local Affairs. These funds must be spent on affordable housing, defined as housing that is affordable to households with 60 percent of area median income or less. At least 30 percent of funds are required to support affordable housing for households with 30 percent of area median income or less.

Position: Monitor
Outcome: Postponed Indefinitely

 

For more information, please contact Nancy Burke or Luke Miller

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