HOA Educational Articles for Members

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Published: 14 May 2024

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Insurance—What Is Going On Right Now?!?

If you haven’t looked at your insurance in the past year, you may be saying what?!? when you do. While it has always been a necessary evil, it is something that both individuals and associations alike must obtain, and never before has it been so expensive or near impossible to secure. Insurance provides protection for all of those “what if” scenarios which could devastate an individual or association. However, in today’s insurance market, it is neither a given that insurance is obtainable, nor is it a given that, if insurance is obtainable, it is affordable. So, where does that leave an association?

If your association is seeing a premium/rate hike above and beyond the normal inflation rates seen over the last few years, the increases are likely being driven by several factors:

1. Wildfire. Insurance carriers who underwrite coverage for associations in Colorado are taking a close look at wildfire exposure, triggered in part by the increase in wildfires across the Western United States and in part triggered by the Marshall Fire. Many insurance carriers will use companies such as Core Logic, RedZone or MapRisk to obtain brush score reports. These companies evaluate the wildfire risk of a property or community by providing an easy to understand score (each company uses a slightly different scoring system, so numbers are not comparable across companies). Wildfire scores are generally calculated by looking at a variety of factors which could include slope, aspect, vegetation/fuel, surface composition, windblown embers, or prior fire data for the area. These factors are all weighted differently and combine to form the fire risk score. As a general statement, these scores are increasing year over year, leading to continuing issues with respect to insurability. A high fire risk score will impact premiums and, potentially, the ability to even secure insurance.
2. Reinsurance Markets. Reinsurance is insurance for insurance companies. Insurance companies use reinsurance as a method of transferring a portion of the insurers financial risk to another insurance company, i.e. the reinsurer. Given the number of catastrophic losses over the last few years, floods, hurricanes, fires, etc., the reinsurance market is contracting. These constrictions throughout the reinsurance market are leading to a situation where primary carriers are struggling to obtain additional reinsurance coverage from fewer reinsurers. This is leading to rate increases which further complicates an association’s ability to obtain full replacement cost coverage and worst-case scenario for an association, the inability to secure insurance.
3. Building Costs. Generally, as a country, we are still suffering supply chain issues and high inflation. These factors, while impacting product availability in the general retail market and what these products cost, also has a direct impact on insurance and building material replacement costs. Replacement costs are one of the factors analyzed when property coverage decisions are made. Higher material costs and supply-chain issues are leading, in part, to higher insurance premiums. In addition, labor shortages lead to longer construction and claims-handling times and negatively impact the cost of claims, which could impact the cost of premiums.
4. Miscellaneous Factors. In addition to the above, use of units as short-term vacation rentals, current claim history, and open claims are having major impacts on the availability of insurance, with some carriers even declining to look at the community due to these factors.

What can you do about it?

1. Speak with the Association’s Broker. Be proactive. Reach out to the association’s insurance broker with ample time before the policy expiration to get an understanding of what renewals premiums look like and options for the association.
2. Speak with Legal Counsel. There may be options for the association, depending on the age and type of community, such as transferring current association insurance obligations to individual owners, drafting maintenance and insurance charts, or insurance audits. This will be a fact specific analysis and qualified legal counsel should be able to provide guidance on this matter.
3. Participate in Firewise, if applicable. Firewise USA is a national recognition program that provides instructional resources to inform people how to adapt to living with wildfire and encourages neighbors to work together and take action to reduce their wildfire risk. Participation and designation as a Firewise community, while beneficial to the general wellbeing of a community when dealing with fire risk mitigation, may also positively impact insurance coverage and rates. The State of Colorado provides an interactive website which pinpoints fire risk for individual communities.
4. Manage Your Existing Policy. An association may want to self-insure on smaller claims to preserve the policy for large losses impacting multiple units.

What is the State doing about the insurance issue?

State lawmakers have Introduced HB23-1174, Homeowner’s Insurance Underinsurance. Among other things, the bill would create guaranteed replacement cost coverage in homeowner’s insurance. This means an insurer would be required to pay the full cost to repair or replace a damaged or destroyed structure, even if the amount exceeds the policy limits. The bill also specifies certain factors insurers must consider when determining the replacement costs of a dwelling. It further extends the termination notice period by an insurer from 30 days advance notice to 60 days advance notice. This bill is sponsored by Judy Amabile of Boulder, as introduced on February 6, 2023.

While insurance has always been a complicated issue, the current insurance landscape is beyond what many individuals and brokers have ever experienced, with many moving parts and many unknowns. Therefore, being aware and taking any proactive steps possible is recommended.

Altitude Law Resource article

For more information or if you have any questions, please contact one of our attorneys at 303.432.9999.

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Published: 08 January 2024

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Carbon Monoxide Alarms Required

Summary of House Bill 09-1091/Carbon Monoxide Alarms Required

On and after July 1, 2009, carbon monoxide alarms are required in:

• Homes for sale
• Homes for rent
• Certain remodels of single-family homes and ‘multi-family residences.’

‘Multi-family residences’ include condominiums and townhomes or other attached homes.

Installation Locations

Carbon monoxide alarms must be installed within fifteen feet of the entrance to each room legally used for sleeping purposes or in a location specified by any applicable building code.

Application to Condominiums, Townhomes and Attached Homes Used for Rental Purposes

Condominiums, townhomes and attached homes used for rental purposes are subject to the same carbon monoxide alarm installation requirements as other homes.  This includes installation requirements upon changes in rental occupants and remodels after July 1, 2009.
There is an exception regarding installation location of the carbon monoxide alarms in any multi-family residence used for rental purposes.  As long as there is a centralized alarm system or other mechanism for a responsible person to hear the alarm at all times, the multi-family residence may have an operational carbon monoxide alarm installed within twenty-five feet of the fuel-fired heater or appliance, fireplace or garage in a location specified by the applicable building code.

Responsibility for Maintenance and Back-up Power

The law requires that alarms have back-up power.

Owners of rental property must replace any alarm that is stolen, removed or found not operational after the previous occupancy. They must ensure that batteries necessary to make the alarm operational are provided to the tenant at the time the tenant takes residence.

Owners of rental property must also replace any alarm if notified by the tenant that the alarm was stolen, removed, found missing or found not operational, and fix any deficiency of which the owner receives notice.

Except as provided above, owners of single-family dwellings or units in multi-family dwellings used for rental purposes are not responsible for the maintenance, repair or replacement of an alarm or the care and replacement of batteries for such alarm.

The tenant of any rental property is required to keep, test and maintain all alarms in good repair. They must notify the owner in writing if the alarm needs to be replaced or if there is any deficiency in the alarm that the tenant cannot correct.

Liability Limitations for Proper Installations

If a carbon monoxide alarm is installed according to the manufacturer’s instructions and the new law, then the owner of the home, their agents, persons in possession and the installer, are immune from liability for damages resulting from operation, maintenance or effectiveness of the alarm.

Application

This law became effective May 14, 2009, with the alarm required after July 1, 2009.

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Published: 09 October 2023

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Unless you’ve been hiding under a rock, you know we’re headed for some extremely cold temperatures very soon (tonight!).  And if you’re on a condo or townhome board, you know what’s next…frozen pipes and finger pointing.

If you haven’t already done so, send an email blast (dare I say a cold blast?) to your residents to ensure they’ve reduced the chance of pipes freezing during what’s supposed to be one of the worst cold snaps in 30 years.  Here are four easy things to do to keep pipes from freezing:

1. Let Faucets Drip

This helps relieve pressure building from ice inside the pipe.

2. Keep Your Cabinets Warm  

Check your cabinets in your kitchen, bathroom, laundry room etc., for exposed pipes. Then leave the doors open to let the warm air in from the rest of your house.

3. Keep Your House Warm

Traveling? Maintain at least 60°F, even when you’re not there.

4. Disconnect Your Hoses

If a hose is still connected, this can cause ice to back up into the pipe. Remove, drain, and store hoses.

And, if pipes do end up freezing, and you end up flooded with water leak questions, then keep this article handy for the inevitable question of: Who Pays for What In a Water Leak Situation? 

Questions? Don’t hesitate to contact an Altitude Community Law attorney at 303-432-9999 or This email address is being protected from spambots. You need JavaScript enabled to view it..

Stay Warm Colorado.

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Published: 21 August 2023

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SB23-178: To Veg, or Not to Veg? That is the Question.

Filed Under Legislation
Posted June 1, 2023
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Now that SB23-178 has been signed into law and has become part of the Colorado Common Interest Ownership Act (effective August 9, 2023), the predominant question is “what does this mean for my community?”

To start, if your community is a condominium community or townhome community with shared walls, the new law does not change anything for your association. Although your community must still comply with the laws already in existence allowing owners to install xeriscaping on their properties, you will not be subject to the changes in the law discussed in this article.
On the other hand, if your community is a single-family detached form of housing, the new law applies to your association.

First and foremost, the new law expands owners’ rights to install xeriscaping on property the owner is responsible to maintain, including limited common elements, right-of-ways, and tree lawns. Associations, however, may prohibit xeriscaping on property that is maintained by the association (regardless of whether such property is owned by the owner). The determining factor as to whether an owner may xeriscape property is whether the owner is responsible for the maintenance of said property and not necessarily ownership.

Additionally, associations must allow owners to plant vegetable gardens in the front-yards, side-yards, and backyards of their homes. Associations must also adopt three pre-approved garden designs, (pulled from the Colorado State University’s downloadable designs, from a municipality, or from the website of another entity creating such designs). The preapproved designs may be used by owners without going through the association’s architectural approval process.

The three pre-approved plans must be posted on the association’s website so that owners can readily access them. Although the statute does not provide actual URL’s where the garden designs may be found, we have included links to two sources that appear to contain such designs. However, because the legislation is not entirely clear on this issue, we recommend associations conduct further research on this topic.

Additionally, the new law creates more restrictions affecting an association’s ability to adopt rules governing installation of xeriscaping, which include the following:
• Associations cannot require use of hardscape on more than 20% of the landscaping;
• Associations must provide an option consisting of at least 80% drought-tolerant plantings; and
• Associations must continue to allow artificial turf in backyards (this was already in the statute).

So, what does all of this mean for you? If you are a single-family detached community, and you currently have a xeriscaping policy, the policy will need to be rewritten to comply with the new law.

If you are a single-family detached community that does not currently have a xeriscaping policy, you are not required to adopt one, but you are still required to post three preapproved garden plans on your website. As such, you are better off adopting a policy addressing this component; otherwise, the association will not have control over xeriscaping in the community.