2013 Colorado Association of REALTORS®
Legislative Review
MESSAGE FROM TONY ROSE
2013 CAR LEGISLATIVE POLICY COMMITTEE CHAIR
The 2013 legislative session differed from the previous two sessions as the Democrats controlled each chamber of the legislature and the governor’s office. This legislative environment required CAR to become more nimble to defeat and/or amend some well-intentioned yet potentially harmful legislation for the real estate industry. The session continued the promising budget projections of years past, permitting the legislature to restore some education funding. Partisans on both sides of the aisle agree that this was a momentous session; however, the agreement ends there. Both sides are now busily spinning why 2013 was either one of the best, or worst, sessions in recent memory.
CAR successfully passed our seller financing bill that exempts licensed brokers, working on behalf of exempted seller financers, from having to be licensed mortgage loan originators. We also worked with the time share association, ARDA, to pass meaningful regulations while ensuring that REALTORS® acting within the scope of their licenses would not become vulnerable to further deceptive trade practice claims. We were also able to halt a late attempt to require the disclosure of remediated homes in which meth was manufactured or used, while adding our voice to a growing chorus of stakeholders that believe the state needs to better regulate hygienists responsible for certifying the remediation of contaminated properties. Overall, CAR’s goals of maintaining an environment that ensures our economic vitality remains healthy were accomplished.
The Colorado Association of REALTORS® 2013 Legislative Policy Committee (LPC) sought to adhere to the goals set forth by its Legislative Policy Statements. The 2013 Policy Statements, approved by the Board of Directors, establishes guidelines to support legislation which ensures economic vitality, provides jobs and housing opportunities, preserves the environment, protects property owners, and builds better communities.
Members of the LPC actively participate in various subcommittees to review and recommend action on specific bills that fall within these guidelines. There were 36 active and committed REALTOR® members on the LPC this year – representing local boards and associations across the state. Both commercial and residential REALTORS® were represented.
As the gavel went down on May 8, 2013, in each chamber of the General Assembly, CAR had actively reviewed 53 bills and took a position on 36 of them. We accomplished much but there are still issues requiring our attention between now and the 2014 session.
The session did bring to light a few issues that were not completely addressed, and thereby we already know of a few issues we can expect to work on between now and the 2014 session. Most likely, a renewed attempt at further foreclosure reform will be undertaken. Moreover, we expect further discussions and legislation involving judicial review of land use decisions, HOA registration and regulations, and possibly an attempt to regulate home inspectors. As always, it is absolutely crucial that we strive to take proactive stances on these and any other issues that are important to us while continuing to be the voice for real estate in Colorado.
Lastly, CAR would like extend our sincere gratitude to Senator Mary Hodge and Representative Dan Pabon for sponsoring SB-118. There were also many other legislators that deserve our heartfelt appreciation for their dedication to Colorado and REALTOR® interests. On behalf of REALTORS® across Colorado – Thank you!
Tony Rose
Chair, 2013 Legislative Policy Committee
Business Taxation & Housing:
A vibrant economy creates jobs, expands the tax base, and enhances and revitalizes communities. CAR closely monitors legislation which affects economic vitality and business competitiveness:
HB-1277 – ConcerningHOA Reg. License Common Interest Community Managers – HB-1277 creates a licensing program for community association managers in the Division of Real Estate (division) in the Department of Regulatory Agencies (DORA). Beginning July 1, 2015, individuals or business entities that are paid to manage common interest communities must obtain a license from the division. The director of the division is authorized to adopt rules for the program and charge a fee to applicants. Following licensure, the director may conduct audits of the business records of a licensee, conduct administrative hearings, investigate complaints, impose fines, and take other disciplinary actions.
A licensed community association manager must:
• be at least 18 years old with either a high school diploma or the equivalent general education development certification;
• have a professional community management credential;
• pass a competency examination;
• obtain a state and national fingerprint-based criminal history background check conducted by the Colorado Bureau of Investigation (CBI) in the Department of PublicSafety; and
• maintain a policy of professional malpractice insurance in an amount and under terms and conditions specified by rule.
Before a license is issued to a partnership, limited liability company, or corporation, an active qualified manager must be designated, and all persons the entity employs to perform community association management duties must pass the competency examination. The bill specifies prohibited activities and other grounds for disciplinary action by the state.
The bill’s fiscal note projects that 625 HOA managers will be affected by the bill. The proposed licensing fees will be $330 for an initial license and $170 per renewal. License periods will be determined by the Division of Real Estate.
Position: Neutral
Status: Signed by the Governor
Regulatory:
CAR believes strongly in legislation aimed at protecting the ability to own, use, and transact real estate, taking great interest in the state of our industry. Several pieces of legislation during the past session dealt with regulatory issues.
HB-1225 – Concerning the Homeowner’s Insurance Reform Act – HB-1225 creates the "Homeowner's Insurance Reform Act of 2013" and makes a number of changes to the regulation of homeowner's insurance primarily for single-family homes used as a primary residence by the owner. It requires insurers to provide to homeowner's insurance policyholders a specific disclosure at least annually regarding policy limits, replacement value, and the importance of preparing an inventory of the contents of the home and outbuildings. Other changes require that:
• insurers include additional living expense (ALE) coverage of not less than 12 months with an option to purchase a total of 24 months of coverage;
• insurers make available extended replacement-cost coverage and law and ordinance coverage;
• the text of all homeowner's insurance documents must not exceed the tenth-grade reading level by January 1, 2015;
• insurers consider an estimate from a policyholder's licensed contractor or architect as the basis for establishing the replacement cost;
• at renewal, insurers provide written notification to policyholders describing changes in insurance policy language;
• insurers make an electronic or paper copy of the homeowner's insurance documents available within three business days of the policyholder's request; in the event of a total loss of a furnished dwelling, insurers offer a minimum of30 percent of the value of the contents coverage without requiring a written inventory;
• if a policyholder receives the depreciated value of contents, the insurer make available to the policyholder the methodology used for determining the depreciated value;
• an insurer allow a policyholder up to 180 days after a total loss claim to submit an inventory of lost or damaged property, or in the event of a disaster, up to 270 days;
• an insurer allow a policyholder up to 180 days after the expiration of ALE to replace property and receive recoverable depreciation on that property;
• insurance agents selling homeowner's insurance must complete at least three hours of continuing education in homeowner's insurance coverage every two years; and
• at least annually, insurers provide policyholders with a specific disclosure form that clarifies that the policyholder is responsible for the adequacy of his or her replacement cost coverage and for maintaining a home contents inventory.
Finally, on or after January 1, 2014, the bill makes void any provision in a homeowner's policy that requires the policyholder to sue the insurer in the case of any dispute within a shorter period of time than allowed for by the applicable statute of limitations.
Position: Neutral
Status: Signed by the Governor
Land Use:
CAR Supports legislation which protects private property rights, including notification to surface owners, eminent domain and condemnation issues, and local control of land use planning.
SB-212 – Concerning Energy District Private Financing Commercial – Under Property-Assessed Clean Energy (PACE) financing programs, local governments or financing districts sell bonds to investors, then loan the proceeds to property owners to cover the cost of renewable energy or energy efficiency improvements. The loans are typically repaid over time (15 to 20 years) through an annual assessment on the property owner's property tax bill.
In May 2008, Colorado enacted HB08-1350 which enabled Colorado counties and cities to propose a local improvement district (LID) specifically for clean energy improvements. HB10-1328 further expanded this authority by creating the Colorado New Energy Improvement District, a clean energy statutory public entity encompassing the entire state of Colorado. The bill authorized the district to issue up to $800 million in bonds to fund PACE financing programs. Local governments wishing to provide PACE financing programs to their citizens may opt to join the statewide district and access this bond revenue for clean energy loans. To date, while several counties have expressed interest in joining the district, none have done so.
This bill makes several modifications to the operation of the Colorado New Energy Improvement District.
- Program Expansion - The district currently allows for the financing of new energy improvements for residential real estate. This bill expands the scope of the program to include commercial property. In addition, the bill repeals the maximum 95 percent loan-to-value requirement for qualified applicants as well as the percentage of value and dollar caps on allowable new energy improvements. The bill also includes fuel cells within the definition of renewable energy improvement.
- District board - The bill directs the Governor to appoint all five voting members to the district board by September 1, 2013, and specifies qualifications. The bill directs the district to develop a program for financing new energy improvements by private third-party financing in addition to district bonds.
- District assessments - Current law includes increased market value and decreased energy bills as factors to be used in the calculation of district assessments. This bill repeals these factors from this calculation and eliminates the requirement that assessments be prepaid. The bill also specifies that if district special assessments are attributable to new energy improvements financed by a private third party, the proceeds from the assessments will be credited to the third party.
- Mortgage Holder Consent - The bill directs the district to develop the processes for ensuring in all cases that consent of existing mortgage holders is obtained to subordinate the priority of their mortgages to the priority of the district's lien.
- Property Assessment - The bill prohibits county assessors, when assessing the value of real property, from including any increase in market value resulting from a new energy improvement in the market value of that property.
- Repeal - Under current law, the district is repealed on January 1, 2016. This bill eliminates that repeal.
Some in the banking industry opposed this legislation because a lien created under C-PACE should be a junior lien subordinate to the first mortgage and C-PACE financing should be limited to unencumbered real estate. They feel that C-PACE makes no sense in Colorado, where commercial real estate values continue to be impaired.
CAR shared similar concerns with the creation of the original Colorado New Energy Improvement District, which remain with any expansion into commercial properties. This year’s bill does address to some extent the priority of liens by setting up a process to ensure consent by the existing mortgage holder is obtained in order to subordinate the priority of their mortgage to the priority of the district’s lien. However, it did not satisfy all of our concerns.
The LPC elected to remain neutral on SB-212 and worked with the bill’s sponsor and our industry partners on amendments that will limit C-PACE financing to unencumbered real property, as well as to ensure that any property that has obtained district financing can be paid off before any conveyance. We are pleased that the bill was amended to address these issues.
Position: Neutral (CAR Amended)
Status: Signed by the Governor
Water:
REALTORS® recognize that one of the most important elements of our quality of life is the protection of the environment, including water, air quality, parks and open space.
SB-258 – Concerning Stages in the Development Permit Approval Process – Under current law, a local government may not approve an application for a development permit unless it determines that the applicant has satisfactorily demonstrated that the proposed water supply will be adequate. The term "adequate" is defined to mean a water supply that will be sufficient for build-out of the proposed development in terms of quality, quantity, dependability and availability to provide a supply of water for the type of proposed development. A local government is permitted to make the adequacy determination only once during the development permit approval process.
The bill modifies the definition of the term "development permit" to clarify both that it is the local government that may determine the adequacy of water supply, and that the local government can determine at what stage of the development permit process to require evidence of adequate water.
SB-258 is a response to a district court ruling that CAR believes erred in its interpretation of HB08-1141. CAR worked tirelessly on HB-1141 to ensure proof of adequate water for new residential developments, while confirming a local government’s purview to determine that their standard is met. Further, CAR fought diligently against attempts from some stakeholders to add language that we believe was designed to stop most future developments. The erroneous ruling, if left to stand, could have reopened the efforts of “no-growth” advocates to use the judicial system to severely limit future development, possibly putting an end to planned unit developments.
Position: Support
Status: Signed by the Governor
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Thank You!
SPECIAL THANK YOU TO LPC MEMBERS, LEADERSHIP AND STAFF
Members of LPC come from all corners of the state and actively participate in various subcommittees to review and recommend action on specific bills. There were 36 active and committed REALTOR® members on the committee this year. CAR depends on countless volunteer hours from its devoted members to be successful. Your hard work and dedication demonstrates that you truly care about your profession and the future of the industry in which you work – Thank you!
2013 COLORADO ASSOCIATION OF REALTORS® LEGISLATIVE POLICY COMMITTEE
Metro District: Sunny Banka, Heather Blake, James Browning, Ann Connelly, Gary Davis, Bill Greer, Dave Kupernik, Stew Meagher, John Mitchell, Caroline Nordyke, Scott Peterson, VafaSohi, Mark Trenka and Brian Urdiales
Mountain District: Nancy Burton, Dennis Clauer, Janene Johnson, Doug Landin, Dave Moloney, Jack Pretti and Bill Small
Northeast District: Kurt Albers, Sean Dougherty, Christopher Guillan and Carol Schack
Northwest District: Janene Bettin, Vicki Burns, Lois Dunn and Tom Kenyon
Southeast District: Barbara Asbury, Jack Beuse, Kevin Butcher, Tony Rose and Preston Troutman
Southwest District: Jarrod Nixon and Geoff Overington
Subcommittee Chairs:
Business, Tax & Housing – Janene Johnson
Land Use – John Mitchell
Regulatory – Sunny Banka
Water – Kurt Albers
Leadership/Staff:
CAR President Keith Kanemoto
CAR President-elect Jolon Ruch
Division VP Brian Urdiales
LPC Chair Tony Rose
CAR CEO Don Flynn
CAR VP of Public Policy Rachel Nance
CAR Government Affairs Director Ted Leighty
CAR Government Affairs Coordinator Jaclyn Dearien
Local Government Affairs Directors: Susan Aldretti, Clarissa Arellano, Ken Hotard, Barbara Koelzer, Duncan McArthur and Sarah Thorsteinson
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