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CONO Council of Neighbors and Organizations
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HOA, CA & Associate Members
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Council of Neighbors and Organizations (CONO) Guidebook (Edition - Draft, 15 Apr 04) for Homeowners Associations (HOA), Neighborhood Associations (NA), and Community Associations (CA)
Provide guidelines, background, source references, contacts, and checklists for new start-up Homeowner Associations (HOA) Neighbor Associations (NA), and Community Associations (CA). The following brief description of distinctions between HOA, NA, and CA are generic for most cases. Specific requirements of HOAs, NA, and CAs depend on what is included in the Association documentation such as covenants, State incorporation, and others. Usually in an HOA, only property owners can be members and there are usually covenants that can be enforced on the owners. Usually in a NA, there is no ownership required and no covenants to be enforced. Usually, in a CA any person can be a member, but only owners can vote. A CA is usually a collective of organizations and individuals associated with a specific geographic area and membership is not mandatory. Information provided will include how to:
§ Determine if there is an existing Association with existing documentation; § Decide whether to form a HOA or NA; § Write by-laws and covenants if required; § Organize, § Register with the State; and § Interact with City Agencies.
In addition, details regarding who to contact for assistance; what responsibilities and liabilities the Board and organization incur; and information regarding insurance, taxes, etc. Information included in this Guidebook is based on past experiences of members of Council of Neighbors and Organizations (CONO), and is not intended to be legally binding nor as replacement of Government documents governing HOAs, NAs or CAs. CONO recommends reading the checklist in Appendix One first to get an overall perspective of what will be needed, and then read the details found in the following paragraphs.
In general, there are three phases in a Homeowners/Neighborhood Association. The first phase is the start up of an entirely new Association, which can be an Association being formed in an older established neighborhood or one resulting from a new development. The second phase is the maintenance of an existing and active Association. The third phase is the re-activation or re-enforcement of an inactive Association. This Guide will only address the first phase while future follow-on efforts will address the other phases.
Often the question of having a neighborhood organization arises from some issue causing neighbors to come together to solve – new development in the area, crime, traffic issues, neighborhood watch, etc. This issue results in rallying neighbors to be involved, and becomes the vision. Effective neighborhood organizations have a vision or cause, are organized, have some source of funds, actively participate in City government, have the backing of a majority of residents, and speak as one to influence outcomes. How to do this is the key.
a. New Organization in Established area First, determine why a neighborhood organization is needed. In a very real way neighborhood organizations are the first level of government. If you think of it as a chain, the value of the association becomes clear: neighborhood, city, county, state, and federal. If you don't have an association, you lose the first level of government of the people, by the people and for the people. Determine what is needed, and what is to be accomplished by the neighborhood organization. There are numerous reasons for organizing. Some examples have been traffic problems, increasing crime, deteriorating infrastructure (streets, sidewalks, poor street lighting, etc.), the need for increased police or fire protection, and the threat of a large housing development or commercial area (especially in an older neighborhood). There may simply be a need for a forum of communication or place to discuss issues and problems. An organized neighborhood provides power in numbers. When an issue goes before the city government, it is better to have spokespeople presenting a united front, rather than a lone resident speaking as a single voice in the wilderness. When "complaining" about something in the community, it is better to have the association behind the complaint, rather than just an individual. In addition, a neighborhood organization provides a means of communication, a way to get out information - helpful hints, educational events, concerns, etc. It can be an effective and timely communication tool, especially if the organization has a line of communication set up (block captains, newsletters, e-mail and telephone listings, etc.).
A neighborhood organization can increase safety and security within an area. It is a very effective way to get to know your neighbors, and perhaps form a Neighborhood Watch. As an example, Park Hill Neighborhood Association originally formed out of the establishment of Neighborhood Watch groups on various streets, which then came together as an ad hoc committee. Neighborhood Watch groups are formed in conjunction with, and with the assistance of, the Crime Prevention Unit that serves the neighborhood. Local police may be more than willing to help if the problem involves law enforcement issues, because their assistance to a neighborhood also makes their job easier. The local police or sheriff’s office will usually work with neighborhood groups.
b. New Organization in New Development In many new residential developments, the Developer institutes a mandatory HOA with mandatory HOA dues included in the management fee, and acts as the HOA agent until 75% (a stipulated number) of the development is complete (Kiowa Law). When the stipulated percentage of completion is reached, the HOA transitions from the developer to the Homeowners. This transition can be tricky, and the Homeowners must be aware of their responsibilities and rights. The Charter, the covenants, the State registration, the remaining funds from HOA dues, and HOA organization transfers to the Homeowners. The County Recorder's Office maintains original documentation on file and will provide upon request for a fee. Prior to this transition, the Homeowners should be organized with at least an ad hoc Board of Directors who will do the preliminary planning for the transition. The planning should include a General Membership meeting; the orderly transfer of the paperwork, responsibilities, Covenants enforcement, and rights; and the transfer of funds.
a. New Organization in Established area Once the purpose has been determined, an ad hoc committee of 4-7 (10 or less is ideal and manageable), or more persons should be formed as a nucleus to organize the venture. From the outset, CONO recommends inviting the local law enforcement district Neighborhood Resource Officer (NRO), or county equivalent, to all meetings and planning sessions. To provide legitimacy, CONO recommends the ad hoc committee hold an election very early to identify at least a President, Vice-President, Treasurer, and Secretary within the committee, and document the election in official minutes of the meeting. A documented election establishes the Board as duly elected officials of an organized group, and not just power hungry people taking control with personal agendas. It is also important, especially if the impetus for organization is a potentially contentious issue, to consider what kind and what level of insurance or legal protection is required for the Board and the organization.
This committee must document all activities from the very beginning. The committee must also do the preliminary research to determine what has been or hasn’t been done to date. In addition, the committee will define the boundaries to be included in the organization, and initiate the first steps of forming a neighborhood organization. The committee can begin scheduling regular meetings at a suitable location, ideally in or very near the neighborhood area. A nearby library, police or fire station, school, church or similar facility is a good place to look first for a meeting location. Occasionally a nearby restaurant or business may donate meeting space for this purpose.
The ad hoc committee should also determine if a Homeowners Association (HOA) or a Neighborhood Association (NA) is more appropriate for the need and the area. In general, the difference lies in home ownership and covenants. In an HOA, only homeowners can be members and there are usually covenants that can be enforced on the owners. In a NA, there is no ownership required and no covenants to be enforced. In some cases (e.g., there are a large number of rental homes within the boundaries of the planned Association with absentee owners), it is best to set up a Neighborhood Association (NA) rather than a Homeowner's Association (HOA). Perceptions are a NA is friendlier, has a softer, less threatening connotation, and probably gets better "press". It may be easier to get members and participation if it has a less legal sounding name. When a group forms because of an issue, the issue can be used in the initial name of the organization to encourage participation (e.g., XYZ Neighbors for Speed Control). The name can be changed later to be more encompassing as a HOA or NA.
Before an association is formed, those trying to get the
Association organized must be very clear about their purpose. It is
probably easier to do the organizing when you have a burning issue (zone change,
development, crime, etc.). However, a group can be formed on softer issues
- but, the aims and goals must be clearly stated and attractive to the residents
or they will not participate.
b. New Organization in New Development Before the HOA transitions from the developer to the Homeowners, the Homeowners must organize for the transition. Working with the Developer, when possible, there should be at least an ad hoc "Board of Directors" who must understand the process and prepare for it. They should know the status of the paperwork, funds, and the schedule for transition. They will do the preliminary planning for the transition. The planning should include a General Membership meeting; the orderly transfer of the paperwork, responsibilities, Covenants enforcement, and rights; and the transfer of funds.
The ad hoc committee should research sources to determine whether there is or has been a neighborhood organization for the area in the past and whether there are covenants in place for the area. The State Web site (www.sos.state.co.us), and the County Clerk and Recorder are good sources. What is still in effect? Many properties have documents but nobody really knows about them. Often homeowners receive homeowner association and covenant documents at closing but don't pay attention to them unless there is an active group and/or it is mandatory and they get a bill for dues. Boundaries must be determined if there is not a group already set up via the documents. What area do you want to include and why? What is your reason for organizing? Be sure you have only the appropriate properties included. Limit the size of the area, otherwise the organization is too large and loses its effectiveness. If there is a need for a very large group, split it up and form several HOAs/NAs, perhaps with an umbrella "parent" organization.
Find out about the Associations that may exist adjacent to your immediate neighborhoods. The City Planning Department has maps and lists of many existing Associations, and CONO has names and contacts. Often Associations in a specific area of town need to band together and it is good to know about these other groups before that time arrives. You may all have common concerns and can learn from each other. Join together and contact each other frequently. For example, Rockrimmon has about seven groups that are joined in the Rockrimmon Coalition. They meet when a common issue surfaces and are in regular contact with one another. It has been very effective and time saving through the fifteen or so years that it has existed. City Planning appreciates it because they know they have one point of contact. All parties still do the legal notices as required but it is easier in the beginning to start with one person.
a. New Organization in Established area After the research has shown there is not or has not been an association for the area, and the boundary of the planned Association has been determined, the committee must petition to organize an association (HOA or NA). The petition (see Appendix 2 for process and samples) includes the mission statement; by-laws to include Board structure, dues, whether mandatory or not; and the mandatory number of signatures. The petition is recorded with the County Clerk. If the petition drive is successful, CONO recommends the organization be registered with the State (Colorado Secretary of State: http://www.sos.state.co.us), and the Association added to the City Planning listing and map (Gladys Akbari, 385-5351).
See Appendix 3 for samples of By-Laws. Use as many existing examples of Covenants, By-laws, etc from groups as you can as samples. Take from them what works for you. Do not start from scratch. Use available documents to help with the format, etc. Start the organization and the By-Laws with the Board of Directors. Plan to have a President, a Vice-President, a Secretary and a Treasurer as a minimum Board of Directors. Plan to have several additional directors. Seven directors is a very effective number to work with because you still have a good number present when some cannot attend, and, with an odd number, often avoid the potential of a split vote. It is important to write up job descriptions from the start so everyone understands their job and no one individual has too much power, and to have a clear approval process for expenditure of Association funds. As soon as possible, CONO recommends the acting-duly-elected-ad hoc committee “Board of Directors” plan and have a General Membership Meeting of the new Association. The first order of business is to elect the Association Board of Directors so the Board is legitimately constituted and defined, and it is clear the Association and the Board are not just power hungry people with personal agendas taking control. CONO further recommends requiring in the By-Laws the use of Robert’s Rules of Order, Simplified Edition for all meetings, and documenting all meetings with official published minutes.
b. New Organization in New Development The Developer should already have the required documents, and State registration for transfer to the Homeowners at the requisite percentage of completion of the development. If this isn’t so, the information above is applicable.
If some type of funding can be obtained, an ad hoc committee can begin publishing a neighborhood newsletter. Distribution of newsletter can begin on just one street at a time, and gradually spread to each surrounding street. At the start, hand delivery is the cheapest and quickest, but requires a dependable volunteer on each street involved. Park Hill originally used Neighborhood Watch Block Captains to do this. Later, if funding is available, it can be mailed.
Whether dues are voluntary or mandatory, establish realistic dues and state the proposed uses for the dues exactly. If it is not mandatory membership, then you have to prove your case for the money. CONO strongly recommends the Association have a published budget available to the members, and have a clearly defined process for approval of and tracking of expenditure of Association funds. Include such items as printing, mail, administration (stamps, paper, copies), annual State registration fee, possibly a social event or a community project such as bringing in dumpsters for clean-ups or advertising for a community garage sale, and be sure to include the fee for CONO membership and other memberships. As part of the fiduciary responsibility of the Board of Directors, it is important to document planned uses of Association funds, and to document the proper disbursement of the funds. In addition to dues, the Board of Directors can request special funds from the membership for special issues (presentation to city council requires pictures, printing, etc). See the sample budget in Appendix 4.
To avoid using a personal Social Security Number and incurring personal taxes for any interest earned, obtain an Employee Identification Number (EIN) from IRS (http://www.irs.gov/, 1-800-829-1040) as soon as possible. Then the Association can open a checking account. Air Academy Exchange National Bank, and Ent Credit Union are very good for this because they do not charge fees, and are very cooperative with Associations. Although the financial institute may only recognize/require one signature, be sure the Board has to approve issuance of checks and that at least two people have to sign checks (maybe for over a certain amount - like over $50.00 to start with). Absolutely clear, accurate records must be kept and a financial review presented at each meeting. Expensive computer financial systems are not required and a simple ledger book may suffice. A large Colorado Springs Association processes about $18,000 through their treasury each year using paper and pencil.
Web Sites:
CONO: http://www.cscono.org/
Neighborhood Links: http://www.neighborhoodlink.com
CITY OF COLORADO SPRINGS WEB SITE: “Springsgov.com” is a very useful and easy-to navigate web site, which contains a wealth of information. Council, Planning Commission and other meeting schedules and agendas can be found here. Also, official minutes of meetings, information about the various City Departments, including Police and Fire Departments, Planning and Parks and Recreation are included. Hard copies of the documents can be obtained at the City Government Offices.
CAI (Community Associations Institute) is a wonderful organization that is most effective for condo communities. But they have wonderful educational programs. It is wise to get on their mailing list so that you know about the programs. Web Site: http://www.caionline.org/ http:/www.caicolorado.org. Local Chapter: Jan Mangum, Chapter Executive Director, jmangum@gbronline.com, tel. 264-0302, fax 278-0974; Michelle Green, President, Mgreen@CABanc.com, tel 720-318-8921. National Neighborhood Website: Neighborhood Resources Center of Colorado: http://nrc-neighbor.org Homeowners Associations Questions and Answers: http://www.hoaqanda.com State Registration: Colorado Secretary of State. http://www.sos.state.co.us http://www.sos.state.co.us/pubs/business/main.htm http://www.sos.state.co.us/periodic-report Grant web sites Colorado Springs Utility: http://www.csu.org/community/cff/index.html El Pomar: http://www.elpomar.org/grant1.html Pikes Peak Library/El Pomar Resource Center: http://www.ppld.org/aboutyourlibrary/services/ElPomar/ResourceCenter.ASP State Financial Assistance: http://www.dola.state.co.us/LGS/FA/FAindex.htm Federal HUD Grants: http://www.hud.gov/ Federal HUD Grants: http://www.hud.gov/offices/cpd/ IRS Web Site and Phone Number 1-800-829-1040 CITY OF COLORADO SPRINGSCity Information 385-CITY (385-2489) City Clerk/Treasurer 385-5901 Crime Stoppers 634-STOP Student Crime Stoppers 444-STOP Police Dept (Non-Emergency) 444-7000 Neighborhood Watch Program Crime Prevention Offices: Sand Creek Division 444-7276 Gold Hill Division 444-7593 Falcon Division 444-7246 Neighborhood Resource Offices: Sand Creek Division 444-7290 Gold Hill Division 444-7588 Falcon Division 444-7227 City Traffic Engineering 385-5908 30 South Nevada #405 Colorado Springs, CO 80901-1575 Development Review and Zoning 385-5905 Building Permit Information: 327-2880 City Planning Department 385-5905 30 South Nevada #301 Colorado Springs, CO 80901-1575 City Land Use Regulations 385-5982 City Planning N/HOA Guide/Map Gladys Akbari 385-5351 City Code Enforcement 444-7891 Zoning Code Enforcement 385-5905 City Land Use Inspection 385-5085 Abandoned Vehicle Report 444-7706 Graffiti Removal 634-5713 Street Light Repair 448-4800 Colorado Springs Utilities Customer Service 448-4800
EL PASO COUNTY County Clerk/Recorder 520-6200 County Land Use Regulations 520-6300 Sheriff (Non-Emergency) 390-5555 Regional Building and Development (RBD) 385-5982 City Planner with RBD 385-5088 Health Department 578-3199 Planning Department 520-6300 Planning Commission 520-6444 27 E. Vermijo Colorado Springs CO 80903 520-6397 (FAX)
NOTE: Regular reading of the Colorado Springs Gazette and the Colorado Springs Independent often provides a variety of information useful to neighborhoods. Keep an eye out for other local news publications also. Sometimes information appears in them that is not seen in the others. NOTE: The Gazette publishes a complete list of names, phone numbers, addresses and email addresses for all local and area public officials each month. It usually appears during the first week of the month in the “Metro” section, on the Editorial page. This is a good information resource on how to reach City Council members, County Commissioners, and State Senators and Representatives. This list should be accessed each time it is printed, because the addresses, phone numbers, etc. change occasionally.
Miscellaneous State Land Use Regulation 303-866-3567 Silver Key Intake Services: 632-1521 Legal Sources with HOA/NA/CA experience (not an endorsement, for information only)/Resources: Scheuerman and Associates 471-7955 ext 131 Joan Goldsmith 528-5048 Lenard Rioth 632-3545 Vanatta, Sullan, Sandgrund and Sullan, P.C. 303-779-0077 (Ronald Sandgrund)
A. Two keys for a successful HOA or NA are ensuring all activities are conducted in an open public process, and all activities are documented thoroughly. B. It is not necessary to get computers and all that. Paper and pencil work just fine and don't cost anything. There will be someone who wants to get all technical and thinks a computer must be purchased and all the software. C. Recruit volunteers to deliver newsletters. This method takes footwork and organization, but is much cheaper than mailing. D. Occasionally local officers can obtain grant funding for “seed money”. E. Establish a location for regular meeting space. F. Make a point to learn the names and titles of your local elected officials. This will include city council members, county commissioners, state senators, and state representatives. G. In Colorado Springs, addresses and phone numbers for all local officials are published monthly in the Gazette, usually the first week of the month. H. It is imperative to plan on working with your local officials. I. Work within the system; you will accomplish much more, much faster. J. Document everything! Carefully maintain files of all paper work and keep good notes regarding your efforts. You never know when you will be glad you did. K. The MOST IMPORTANT THING OF ALL WHEN TRYING TO ESTABLISH A NEIGHBORHOOD ASSOCIATION IS TO JOIN THE COUNCIL OF NEIGHBORS AND ORGANIZATIONS (CONO)! L. The sooner it is publicly announced about what is going on, the better. Do not ever let there be an opportunity for rumors to start. This is a great event for rumors. Be sure the purpose is clearly stated. There will always be someone who thinks the formation is for the purpose of addressing house colors - no right to do that unless Covenants are written and everyone votes and they are properly recorded with deeds - very, very difficult to do. M. REINSTATING COVENANTS: (Example – Tamaron) If Covenants have not been enforced or the existing Association has been dormant for years, it is possible to reinstate and reactivate the Covenants and the Association. It is a process similar to forming a new Association, except the Covenants are pre-existing. If the Covenants aren't defunct or inactive due to excess time elapsed without renewal, written notice can be given of reactivation and re-formation of Board of Directors. After written notification to all homeowners inviting them to participate, and after re-formation of a Board of Directors, the Covenants can then be enforced. N. LEGAL ASSISTANCE: Much of the organization can be done without costly legal assistance. The first thing to do is to canvass the neighborhood to see if there is a lawyer who is willing to help out as a volunteer effort. When you need legal help, make lists of concerns and questions so you are very clear to the lawyer what you need in order to minimize costs. Attending programs that CONO, CAI and the City conduct can be a very effective way to get legal advice at a very low cost. CONO, CAI, and the City offer programs with general advice that can help you get to the point of knowing what you need help with and asking clearer questions. O.
CITY COUNCIL and CITY PLANNING COMMISSION: Attend meetings or
watch sessions on TV (Adelphia Channel 18) to learn how presentations are made.
This will help when you are involved in a development issue, or any other issue,
in your neighborhood. APPENDIX 2 – Petition Process and Sample APPENDIX 3 – City Planning Development Review – N/HOA Guide and Map Letter Appendix 10
DEFINITIONS
Covenants - Covenants run with the land and some do need to be renewed. Most will automatically renew. Old ones that have been dormant can be reinstated with notice - as of such and such a date they will be in effect and there will be a meeting to elect the Board, etc. Must seek legal counsel before making any statements about this.
Homeowners Association (HOA) - only property owners can be members and there are usually covenants that can be enforced on the owners.
Neighborhood Association (NA) - In a NA, there is no ownership required and no covenants to be enforced.
Community Association (CA) - In a CA, there is no ownership required for membership, but only property owners may vote, and there may or may not be covenants to be enforced. A CA is a collective of individuals and/or organizations within and representing a specific geographic area.
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