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Real Estate & Property Law

: Colorado Homeowners Association Law Blog

Conflict of Interest Bill Clears Senate Committee on Local Government

By Lawrence B. Leff, Mark K. Payne, Suzanne M. Leff, Stan V. Jezierski

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The Senate Committee on Local Government ('Committee') today considered House Bill 11-1124 ('HB 1124') which addresses conflicts of interest for individuals serving on the board of their homeowners' association ('HOA') and on special district boards.

The bill was passed unanimously by the Committee with a favorable recommendation to the full Senate. In addition, the Committee is recommending that the bill be placed on the Senate Consent Calendar. We expect the Senate will approve HB 1124 which currently contains the following provisions:

? Every HOA in Colorado is required to adopt 9 Responsible Governance Policies (commonly referred to as 'SB 100 Policies'). One of the SB 100 Policies addresses conflicts of interest of board members. HB 1124 would require inclusion of the following provisions in this particular policy: (1) a definition or description of when a conflict of interest exists; (2) the procedures a board of directors of an HOA must follow when a conflict of interest exists -including whether the board member must recuse him or herself from discussing or voting on the issue which is the subject of the conflict.

? The policy addressing conflicts of interest of board members must be periodically reviewed by the board of directors of each association.

? An individual running for a seat on the board of a special district must disclose whether he or she serves on the board of an HOA which is located within the special district.

We will carefully monitor HB 1124 as it is considered by the Senate. Assuming no amendments are adopted by the Senate prior to final passage, HB 1124 will then be sent to Governor Hickenlooper for consideration. We will continue to provide updates on significant developments to the bill.

Full post as published by Colorado Homeowners Association Law Blog on March 22, 2011 (boomark / email).