Joseph A. Bucceri – July 27, 2021
On July 2, 2021, Governor Polis signed HB 21-1229 (“Bill”) into law, which becomes effective September 7, 2021. This law modifies how HOAs are regulated in Colorado in three ways. First, the Bill makes it more difficult for an association to deny the installation of solar panels for aesthetic reasons. Second, it prevents an association from prohibiting nonvegetative turf grass in backyards. Finally, it modifies what constitutes an association record and how an association must respond to a request for documents.
Short Summary of HB 21-1229
- Aesthetic requirements for solar panel installation cannot increase the cost or reduce the productivity or efficiency of the panels by more than 10%.
- An application for installation of solar panels is deemed approved if not denied within 60 days.
- Associations cannot prohibit the installation of nonvegetative turf grass in rear yards.
- A list of all current unique and extraordinary fees that are charged in connection with the sale of a unit is now considered an “Association Record” and must be produced on request as required by state law.
- An association can be charged up to $500.00 (or the owner’s actual damages if greater) for its failure to produce records within 30 calendar days after receipt of a written request under C.R.S. § 38-33.3-317.
Restrictions on Approval of Solar Panels
This section of the Bill is not really a new restriction, but more clearly defines an existing statute. The Bill doesn’t modify the Common Interest Ownership Act (“CCIOA”), but clarifies C.R.S § 38-30-168, which more broadly regulated and voided restrictions and covenants affecting any real property that effectively prohibited or restricted the installation and use of solar panels (and other renewable energy generation devices). This means the statute prohibitions also apply to declarations and other governing documents for all common interest communities.
C.R.S § 38-30-168 previously allowed an owners association to impose reasonable restrictions on dimensions, placement, and appearance of the solar panels if it did not “significantly increase the costs” or “significantly decrease performance of efficiency” of the panels. HB 21-1229 removes the “significantly” language and replaces it with a more concrete standard, that is, the aesthetic restrictions imposed by an association cannot increase the cost or reduce the efficiency of the solar panels by “more than ten percent.”
This concrete number may be helpful to associations as it could reduce the likelihood of litigation where the parties disagree on whether an increase in cost or decrease in performance is “significant.” However, with such a low number, many aesthetic rules may not be enforceable.
The final addition to this section is a timing requirement. The architectural review process for solar panel installation cannot take more than 60 days. This includes a “deemed approved” clause, which means, the owner can begin installation without approval if an association does not deny the application within 60 days. This section also requires the association to give a reason for the denial, which is generally a best practice.
New Restrictions on Prohibiting Nonvegetative Turf Grass
For instance, if design guidelines require 50% of the square footage of a backyard must be grass, an owner could instead install nonvegetative turf grass. An association could likely require the nonvegetative turf grass to be a certain color, quality, and be kept in good condition.
An association can still prohibit nonvegetative turf grass in front yards. Additionally, this section applies only to nonvegetative turf grass, not all non-vegetative landscaping, which means an association can still prohibit an owner from installing plastic Christmas trees in their backyard or using other plastic foliage in their landscaping.
New Requirements on Association Records
The final section of the Bill modifies section 317 of CCIOA, which deals with association records and owner’s rights to inspect and copy them. First, it requires an association to maintain “[a] list of the current amounts of all unique and extraordinary fees, assessments, and expenses that are chargeable by the association in connection with the purchase or sale of a unit and are not paid for through assessments.” So if there are any fees that an association, or its management company, might charge during the sale of a unit, such as a status letter fee or a property transfer fee, the association has to maintain (and thus produce for the owner on request) a list of all these fees. This allows owners to clearly communicate to prospective buyers all the costs associated with the sale of the property.
The Bill’s second major change to section 317 establishes a 30-day deadline for an association to allow an owner to inspect and copy association records after receipt of a written request. It also imposes a $50-a-day penalty (with a maximum of $500 or the owner’s actual damages) on the association for any failure to comply. However, this penalty is back-dated to the 11th business day after the request was received if the documents are not provided by the 30th day.
There are two more minor provisions in this section of the Bill. The first states that the association’s mandatory annual disclosures under CCIOA section 209.4 are also association records under section 317. The second clarifies what can be charged to an owner making a records request.
Associations should update their records inspection policies to include the new records they are required to maintain and make available.
Do you have any questions regarding the effect of HB 21-1229 on your community? Please contact our office to assist you in addressing any issues or document revisions needed to comply with the new statutory requirements.
You can read the entirety of HB 21-1229 here.
