Colorado

Jan 9, 2014 10:09 PM by Andy Koen

News 5 Investigates: HOA bylaws cast doubt on legitimacy

El Paso County - The homeowners association that recently foreclosed on a family in Peyton may be operating in violation of state law. The News 5 Guardians sorted through the HOA bylaws, as well as property and court records and found multiple violations.

The Wrights moved out just after Christmas. Their homeowners association, Woodmen Hills Filing No. 11 Design Review Council, foreclosed the house for $900 in unpaid dues and fines. That debt ballooned to $10,900 after the HOA tacked on late charges and attorney's fees. When the Wrights didn't show up to court, the HOA won the right to foreclose.

Christopher Wright said they offered to settle the debt in exchange for the deed granted by the courts, but the HOA refused their offer.

"Why would you not want to give somebody's home back and put five children, you know, with three of them under ten, into a homeless shelter?"

The Wrights circumstances are extreme, but they aren't alone.

Property records filed with El Paso County Clerk and Recorder show Woodmen Hills Filing No. 11 Design Review Council has placed 225 liens on their 853 members. Court records show they sued their members 126 times and started foreclosure on at least 5 properties.

Yet the current bylaws governing the association clearly violate due process protections granted to homeowners under state law.

Homeowners in this filing can't vote for the board. They can't attend board meetings, nor are they allowed hearings to dispute fines and charges. On top of that, the board members have no term limits and can appoint themselves to office.

When we reached out to the board, we were told to talk to their lawyers.

"This is not, in fact, a homeowners association," said attorney Jerry Orten. "It's just a design review council that is subject to only three very minor provisions of the Colorado Common Interest Ownership Act."

Woodmen Hills Filing No. 11 Design Review Council claims to be exempt because the association dues are less than $400 a year.

"As a limited expense planned community, they're only subject to three very minor provisions of the common interest ownership act," Orton said.

But the Design Review Council is registered with the Colorado Department of Regulatory Agencies (DORA) as a Planned Community Homeowners Association.

Additionally, when they foreclosed on the Wrights, the lawyers used a legal mechanism called a Super Priority Lien to rush the case through the courts. It's a mechanism only available to homeowners associations and not limited expense planned communities.

The Design Review Council claimed the same Super Priority Lien privilege in foreclosure filings against two other homeowners; Robert Dias and Joanne Cook. Those cases were settled out of court.

The News5 Guardians sent Orten a follow-up email for clarification. He replied by saying, "the lawsuit that was prepared in this foreclosure did reference the superlien, in error."

He maintains that the Wrights debt was legitimate and the foreclosure legal.

The Design Review Council apparently knew its bylaws were out of compliance with state three years ago.

The News 5 Guardians obtained a copy of Amended and Restated Bylaws that were drafted October 13, 2010. The board never filed them with the clerk and recorder.

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