APPENDIX 5

• Jurisdiction: Colorado

APPENDIX 5

HOA CD ACTION APPROVAL REQUIREMENTS TASK LIST (C.R.S. § 38-33.3-303.5/HB 17-1279)

This task list describes steps homeowners association attorneys may want to take in light of HB 1279's 2017 amendments to the Colorado Common Interest Ownership Act's (CCIOA) C.R.S. § 38-33.3-303.5 regarding homeowners association approval of construction defect lawsuits (CD Actions).

1. Send CDARA Notice of Claim.

• In most instances, a homeowners association claimant will probably elect to send the Construction Defect Action Reform Act (CDARA) statutory Notice of Claim before beginning the CD Action approval process because associations will likely not ask homeowners to vote whether to pursue construction defect claims against construction professionals before providing the involved construction professionals with notice and an opportunity to offer to repair or settle the claims. This task list assumes that the homeowners association sent the CDARA Notice of Claim before beginning the CCIOA CD Action approval process.

2. Schedule Pre-CCIOA Notice Meeting.

• Although CCIOA does not require it, the association's counsel may elect to schedule a pre-CCIOA notice meeting to educate and inform owners about the construction defects, the anticipated defect action, and the disclosure and voting process.
• It may make sense to schedule this meeting after the construction professionals respond, or fail to respond, to the Notice of Claim, and before the Notice of Claim tolling period ends, so that the association board can provide and comment on the construction professionals' responses to owners and minimize any lapse in tolling.

3. Schedule the CD Action Approval Meeting.¹

• The CD Action Approval meeting is a meeting for the owners to consider whether to approve the proposed CD Action. When choosing a date for the CD Action Approval Meeting, consider the mailing deadlines described below for the Advisory Notice and the Meeting and Disclosure Notice.²
• Construction professionals, and their designees, may attend and make a presentation at this meeting.³
• Consider scheduling a court reporter and/or videographer to document the meeting; at a minimum, tape-recording the meeting may be advisable.

4. Mail the Advisory Notice.

• The association must mail the Advisory Notice to each construction professional against whom a construction defect action is proposed, at its, her, or his last-known address, five business days before sending homeowners and construction professionals the Meeting and Disclosure Notice described below.⁴ The Advisory Notice must state the date and time of the CD Action Approval Meeting.⁵
• C.R.S. § 38-33.3-303.5 provides no tolling before the association sends the Meeting and Disclosure Notice. Consider sending the Advisory Notice before CDARA tolling ends to maximize the chances of continuous tolling.

5. Mail the Meeting and Disclosure Notice.

• The association must mail the Meeting and Disclosure Notice to both construction professionals and homeowners, at least 10 and not more than 15 days before the CD Action Approval Meeting.⁶
• Mailing the Meeting and Disclosure Notice triggers up to 90 days of tolling.⁷ Tolling ends after 90 days or when the association determines that the CD action is approved or disapproved, whichever occurs first.⁸
• The mailing requirement does not apply to potentially liable construction professionals identified after the association mails the Meeting and Disclosure Notice, or to construction professionals later joined in an action that owners previously approved.⁹
• Failure to hold the CD Action Approval Meeting

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