Published in the Colorado Real Estate Journal
In an article published on 8/20 in the Colorado Real Estate Journal, Lee Freedman discusses Alternative Dispute Resolution (ADR) in community associations and House Bill 25-1123. HB25-1123 had been introduced in Colorado, and intended for disputes between a unit owner and unit owners’ association to go through an internal resolution process prior to either party seeking legal action through court proceedings; however, this process is very costly to community associations since few restrictions were imposed on the types of disputes that could be mediated.
“Allowing an unlimited number and type of disputes to be presented to an association would have resulted in an enormous expense for most associations,” said Freedman. “Community associations are nonprofit corporations that do not operate from any funds they make from selling something. They operate only from funds received from assessments levied against the units within the community based on an annual budget. The amount and type of services an association provides are based on the governing documents and requirements under the law.”
The Bill places the financial burden of each case on the association, and an influx of disputes would force many to cut resources or increase the costs each unit pays.
Other proposals did start to get traction, like C.R.C.P. 11. Freedman notes “C.R.C.P. 11 helps limit the number of frivolous claims that can be asserted in a court of law in Colorado by requiring attorneys of parties to sign every complaint affirming that, among other things, the attorney has a reasonable and good faith belief that the complaint (or other pleading) is well grounded in fact and law and is not presented for an improper purpose. This helps limit the filing of frivolous or groundless complaints.”