A Bill for an Act
Page 1, Line 101Concerning alternative dispute resolution for disputes that
Page 1, Line 102arise between a unit owner and a unit owners'
Page 1, Line 103association.
Bill Summary
(Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.)
Under current law, common interest communities are encouraged to use mediation prior to filing a complaint with the court. The bill requires a dispute between a unit owner and a unit owners' association to go through an internal dispute resolution process and mediation before the parties can file a complaint with the court. If the parties are unable to reach a mediation agreement, the bill allows the parties to undergo arbitration or commence a legal proceeding.
Page 2, Line 1Be it enacted by the General Assembly of the State of Colorado:
Page 2, Line 2SECTION 1. In Colorado Revised Statutes, repeal and reenact, with amendments, 38-33.3-124 as follows:
Page 2, Line 338-33.3-124. Legislative declaration - purpose - mandatory
Page 2, Line 4alternative dispute resolution - definitions. (1) The general
Page 2, Line 5assembly finds and declares that the purpose of this section is to
Page 2, Line 6provide an efficient, fair, and cost-effective process for
Page 2, Line 7resolving disputes between a unit owner and a unit owners'
Page 2, Line 8association while preserving the integrity of community relationships and minimizing the burden on the judicial system.
Page 2, Line 9(2) As used in this section, unless the context otherwise requires:
Page 2, Line 10(a) "Arbitration" means a binding process in which an
Page 2, Line 11arbitrator hears the facts of the dispute and issues a final decision that is enforceable by law.
Page 2, Line 12(b) "Dispute" means any conflict, claim, or disagreement
Page 2, Line 13between a unit owner and a unit owners' association regarding
Page 2, Line 14the interpretation, enforcement, or application of the common
Page 2, Line 15interest community's governing documents, policies, or actions.
Page 2, Line 16"Dispute" does not include a conflict, claim, or disagreement
Page 2, Line 17filed pursuant to part 8 of article 20 of title 13, or disagreement that involves a declarant or an affiliate of a declarant.
Page 2, Line 18(c) "Internal dispute resolution" means a process for
Page 2, Line 19resolving conflicts between a unit owner and a unit owners'
Page 2, Line 20association.
Page 3, Line 1(d) "Mediation" means a process through which parties
Page 3, Line 2involved in a dispute concerning matters arising under this
Page 3, Line 3article 33.3 meet with a mediator to discuss the matter, defining
Page 3, Line 4and articulating the issues and their positions on the issues, with a goal of resolving the dispute.
Page 3, Line 5(e) "Mediator" means an individual who is trained to assist
Page 3, Line 6the parties in reaching a mutually acceptable resolution of the
Page 3, Line 7parties' disputes through the identification and evaluation of alternatives.
Page 3, Line 8(3) A dispute between a unit owner and a unit owners'
Page 3, Line 9association arising under the provisions of this article 33.3 must
Page 3, Line 10undergo internal dispute resolution and, if necessary, mediation prior to the commencement of a legal proceeding.
Page 3, Line 11(4) (a) In the event of a dispute between a unit owner and
Page 3, Line 12a unit owners' association, either party may submit a written
Page 3, Line 13request to the other party to the dispute requesting internal dispute resolution. The written request must include:
Page 3, Line 14(I) A brief description of the dispute between the parties;
Page 3, Line 15(II) A notice that the party receiving the request for
Page 3, Line 16resolution is required to respond within thirty days after receipt or the request will be deemed rejected; and
Page 3, Line 17(III) If the party upon whom the request is being served is the unit owner, a copy of this section.
Page 3, Line 18(b) Service of the request described in subsection (4)(a) of
Page 3, Line 19this section must be made through personal delivery, first-class
Page 3, Line 20mail, express mail, facsimile transmission, or other means
Page 3, Line 21reasonably calculated to provide the party upon whom the request is served actual notice of the request.
Page 4, Line 1(c) (I) A party upon whom a request is served has thirty
Page 4, Line 2days following service to accept or reject the request. If a
Page 4, Line 3party does not accept the request within thirty days, the request is deemed rejected by the party.
Page 4, Line 4(II) If a party rejects a request to participate in internal
Page 4, Line 5dispute resolution, the parties must sign a written statement
Page 4, Line 6detailing that the parties are unable to participate in internal
Page 4, Line 7dispute resolution and state which party refused to participate in the internal dispute resolution meeting.
Page 4, Line 8(III) If a party rejects a request to participate in internal
Page 4, Line 9dispute resolution or does not respond to the request, either party may start a legal proceeding.
Page 4, Line 10(IV) The statement must be filed with the court if the
Page 4, Line 11parties start a legal proceeding. If the dispute proceeds to
Page 4, Line 12court, the court may take the party's refusal to participate in
Page 4, Line 13an internal dispute resolution meeting into consideration in determining an award for attorney fees.
Page 4, Line 14(d) If the party upon whom the request is served accepts
Page 4, Line 15participation in dispute resolution, the parties must set a
Page 4, Line 16mutually agreed upon date and time for an internal dispute
Page 4, Line 17resolution meeting. If either party intends to be represented by
Page 4, Line 18an attorney at the internal dispute resolution meeting, that
Page 4, Line 19party must notify the other party at least forty-eight hours
Page 4, Line 20prior to the internal dispute resolution meeting that they will
Page 4, Line 21be represented by an attorney. If a party fails to provide
Page 4, Line 22advance notice of a party's intent to be represented by an
Page 5, Line 1attorney at the internal dispute resolution meeting, the
Page 5, Line 2internal dispute resolution meeting must be rescheduled if the
Page 5, Line 3party who did not receive advance notice requests the meeting be rescheduled.
Page 5, Line 4(5) (a) If the parties are unable to resolve the dispute
Page 5, Line 5through internal dispute resolution pursuant to subsection (3)
Page 5, Line 6of this section, the parties must undergo mediation prior to starting a legal proceeding.
Page 5, Line 7(b) The association must provide the unit owner with
Page 5, Line 8notice of mediation within fourteen days after the completion of the internal dispute resolution meeting.
Page 5, Line 9(c) Mediation must take place within thirty days after the unit owner receives notice of mediation.
Page 5, Line 10(d) The mediator assigned to carry out the mediation must be an impartial third party and must be approved by both parties.
Page 5, Line 11(e) (I) If the parties cannot reach a mediation agreement
Page 5, Line 12within fourteen days after mediation begins, the mediation
Page 5, Line 13process is considered unsuccessful and the parties may proceed to arbitration or may commence a legal proceeding.
Page 5, Line 14(II) If mediation is unsuccessful, the mediator must issue
Page 5, Line 15a certificate of compliance stating that one or more of the following conditions are met:
Page 5, Line 16(A) The parties participated in mediation in good faith and were unable to reach a mediation agreement;
Page 5, Line 17(B) One party refused to participate in mediation; or
Page 5, Line 18(C) The dispute is exempt from the requirements of this
Page 5, Line 19section pursuant to subsection (6) of this section.
Page 6, Line 1(III) The party starting a legal proceeding must include the certificate of compliance when filing with the court.
Page 6, Line 2(IV) Failure to file a certificate of compliance when
Page 6, Line 3starting a legal action is grounds for an objection or a motion
Page 6, Line 4to strike, unless the court finds that dismissal of the action for
Page 6, Line 5failure to comply would result in substantial prejudice to one of the parties.
Page 6, Line 6(f) If a mediation agreement is reached, the terms of the
Page 6, Line 7mediation agreement must be in writing and signed by both
Page 6, Line 8parties and the mediation agreement is enforceable as a contract.
Page 6, Line 9(g) The cost of mediation must be shared equally between
Page 6, Line 10the unit owner and the association, unless otherwise agreed upon by the parties.
Page 6, Line 11(6) The requirements of this section do not apply to the following:
Page 6, Line 12(a) A dispute involving a violation of local, state, or federal law;
Page 6, Line 13(b) A dispute involving a claim of discrimination, harassment, or other civil rights violation;
Page 6, Line 14(c) A case in which one party seeks emergency relief or injunctive relief from the court; or
Page 6, Line 15(d) A dispute that has already been adjudicated in court or through arbitration.
Page 6, Line 16(7) A unit owners' association shall, on an annual basis,
Page 6, Line 17provide written notice to each of its unit owners stating that
Page 6, Line 18the failure of a unit owner to comply with the alternative
Page 7, Line 1dispute resolution requirements of this section may result in the
Page 7, Line 2loss of the unit owner's right to sue the unit owners' association
Page 7, Line 3regarding enforcement of the governing documents or applicable law.
Page 7, Line 4SECTION 2. Safety clause. The general assembly finds,
Page 7, Line 5determines, and declares that this act is necessary for the immediate
Page 7, Line 6preservation of the public peace, health, or safety or for appropriations for
Page 7, Line 7the support and maintenance of the departments of the state and state institutions.