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. Mandatory alternative dispute resolution -
Page 2, Line 4purpose - legislative declaration - 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 relations 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) "Dispute" means any conflict, controversy, or
Page 2, Line 11disagreement between a unit owner and a unit owners' association.
Page 2, Line 12(b) "Mediation" has the same meaning as set forth in section 13-22-302.
Page 2, Line 13(3) A dispute between a unit owner and a unit owners'
Page 2, Line 14association must undergo an informal negotiation pursuant to
Page 2, Line 15subsection (4) of this section and, if unsuccessful, mediation
Page 2, Line 16after filing a lawsuit unless mediation has already been attempted.
Page 2, Line 17(4) (a) In the event of a dispute, either party may request an informal negotiation to resolve the dispute.
Page 2, Line 18(b) After a party requests an informal negotiation, the
Page 3, Line 1unit owners' association shall submit a written notice to the unit owner. The written notice must include:
Page 3, Line 2(I) A brief description of the dispute between the parties;
Page 3, Line 3(II) A requirement that the unit owner meet with the unit
Page 3, Line 4owners' association within sixty days of receiving the notice; and
Page 3, Line 5(III) A copy of this section.
Page 3, Line 6(c) Service of the notice described in subsection (4)(b) of
Page 3, Line 7this section must be made by certified mail, return receipt requested.
Page 3, Line 8(d) The informal negotiation described in this subsection
Page 3, Line 9(4) must take place at a regularly scheduled unit owners'
Page 3, Line 10association board meeting in executive session, or, if there is not
Page 3, Line 11a meeting scheduled within sixty days following delivery of the
Page 3, Line 12written notice, at a special unit owners' association board
Page 3, Line 13meeting in executive session during that sixty-day period to
Page 3, Line 14informally negotiate a resolution of the dispute.
Page 3, Line 15Communications during the unit owners' association board
Page 3, Line 16meeting during the informal negotiation are confidential and
Page 3, Line 17protected communications consistent with rule 408 of the
Page 3, Line 18Colorado rules of evidence and section 13-22-307. The portion of
Page 3, Line 19the unit owners' association board meeting in which an informal
Page 3, Line 20negotiation takes place must be closed to anyone who is not a
Page 3, Line 21party to the dispute that is the subject of the informal negotiation.
Page 3, Line 22(e) For disputes governed by the dispute resolution
Page 3, Line 23process described in section 38-33.3-209.5 (1.7), the informal
Page 4, Line 1negotiation must take place pursuant to the process described in section 38-33.3-209.5 (1.7) prior to filing a complaint in court.
Page 4, Line 2(f) A provision of an agreement entered into between the
Page 4, Line 3parties that resolves the dispute is not a waiver of a covenant or enforcement right by the association in another matter.
Page 4, Line 4(g) Either party may be represented by an attorney at the informal negotiation at the party's own expense.
Page 4, Line 5(5) (a) In the event that the dispute is not resolved
Page 4, Line 6through informal negotiation as required in subsection (4) of
Page 4, Line 7this section, either party may file a complaint in a court of
Page 4, Line 8competent jurisdiction. Once a complaint is filed, but before an
Page 4, Line 9answer or other responsive motion is filed, the court shall
Page 4, Line 10order mediation unless the parties have attempted voluntary
Page 4, Line 11mediation on issues identified in the complaint within ninety days
Page 4, Line 12prior to the date the complaint is filed. The cost of mediation must be equally shared by the parties.
Page 4, Line 13(b) This subsection (5) does not preclude the parties from
Page 4, Line 14voluntarily taking part in mediation before filing with a court
Page 4, Line 15of competent jurisdiction if the parties are unable to reach a
Page 4, Line 16resolution through an informal negotiation pursuant to subsection (4) of this section.
Page 4, Line 17(6) This section does not apply to a dispute involving a
Page 4, Line 18reasonable threat of immediate injury, harm, or damage to a person or property.
Page 4, Line 19(7) A unit owners' association shall annually provide a copy of this section to each of its unit owners.
Page 4, Line 20(8) A unit owners' association must update the
Page 5, Line 1association's written policies to comply with the requirements
Page 5, Line 2of this section and provide a copy of the updated written policy
Page 5, Line 3to its unit owners within fourteen days after updating the written policies.
Page 5, Line 4SECTION 2. Safety clause. The general assembly finds,
Page 5, Line 5determines, and declares that this act is necessary for the immediate
Page 5, Line 6preservation of the public peace, health, or safety or for appropriations for
Page 5, Line 7the support and maintenance of the departments of the state and state institutions.