The Second Regular Session of the 68th General Assembly of the State of Colorado adjourned on May 9, 2012, with the 90-day period following adjournment for referendum petitions to be filed expiring August 7, 2012. Several new laws were enacted pertaining to real estate issues, and this article provides brief summaries of those laws. A reference to the complete list of laws enacted during this session is cited below. Those laws most directly related to real property matters are summarized as follows:
HB 12-1105: Concerning Wind Energy Property Rights. Colorado law now specifies that the right to wind energy is a nonseverable interest in real property appurtenant to the surface estate. Nevertheless, wind energy may be developed by third parties pursuant to wind energy agreements, which includes leases, licenses, easements, or other agreements to develop wind-powered energy generation. The owner of the surface estate or the wind energy developer must record either the wind energy agreement or a memorandum thereof in the real property records of the county in which the land subject to the agreement is located. The statute contains provisions regarding the transferability of the rights under the wind energy agreement and a process where an affidavit may be recorded in the real property records providing notice that the generation of electricity has commenced. Wind energy agreements existing prior to July 1, 2012, were given until September 1, 2012, to comply with the new requirements. Once the wind energy agreement has been terminated, the owner of the surface estate has the right to request the wind energy developer to remove the agreement of record, the failure of which will subject the wind energy developer to liability for any damages from failing to record a termination. Unless the parties otherwise agree, all easement interests acquired after July 1, 2012, for the purpose of producing wind energy will revert to the owner of the surface estate if wind energy generation has not commenced, or if wind energy production has ceased, for a period of 15 continuous years. This law also exempts equipment used in the development of wind energy from personal property taxes until the equipment is first used in accordance with statutory provisions. The law became effective August 8, 2012.
HB 12-1110: Concerning the Regulation of Appraisal Management Companies, and, In Connection Therewith, Making an Appropriation. Real estate appraisers must be licensed in Colorado, consistent with federal law. Federal guidelines now require mortgage lenders to use "appraisal management companies," who in turn hire real estate appraisers, to value property for lending purposes. Appraisal management companies are now subject to the governance and licensing requirements similar to those imposed on real estate appraisers. In addition to defining which entities meet the definition of appraisal management companies, entities that directly perform appraisal services, that solely distribute orders to a client-selected panel of appraisers, and certain mortgage companies that manage a panel of appraisers are excluded from the definition. The statute includes registration, licensing, and certification requirements, as well as continuing education procedures. Criminal history and fingerprinting are part of the background checking process. Appraisal management companies are required to maintain errors and omissions insurance and post surety bonds as part of the licensing process. Specific prohibited activities are listed as grounds for disciplinary actions. The statute also contains appropriations from division of real estate funds for implementing these governance provisions.
HB 12-1237: Concerning the Records Kept by the Unit Owners Association of a Common Interest Community. This law, which will become effective January 1, 2013, contains amended provisions for which records are required to be retained and distributed by an owners association concerning finances, board meeting minutes, and other affairs of the common interest community. The amendments adopt, with some changes, suggested language from the uniform law commission concerning these matters. More specifically, the association may require owners to submit written requests describing the records sought with particularity, at least 10 days prior to production or inspection, and with limiting times for examination and inspection to normal business hours or at any executive board meeting that will occur within 30 days of the request. Certain limitations are placed on obtaining a membership list or part thereof, and their use and sale to third parties. The statute also lists various records that may be withheld from inspection or copying. The existing provisions remain largely unchanged regarding providing a common interest community's governing documents to buyers under a contract to buy and sell real estate, upon payment of the association's usual fee.
HB 12-1329: Concerning the County Treasurer Becoming the Public Trustee in Certain Counties Where the Public Trustee Is Currently Appointed by the Governor. These new statutory provisions pertain to public trustees, budgets, and audit rights. Each public trustee must adopt a budget pursuant to the Local Government Budget Law of Colorado and submit it for review and approval by the Board of County Commissioners of the county in which they serve. The Office of the Public Trustee is subject to an annual audit under the Colorado Local Government Audit Law, unless the Public Trustee is appointed by the Governor, in which event they will be subject to a separate individual annual audit and will not be included in the county audit. Public trustees appointed by the Governor are subject to the State Procurement Code for any purchases of $20,000 or more and for any multiple-year purchase agreement, unless the procurement rules established for that county require an open and competitive bidding process, in which event the county procurement rules shall apply. This law became effective August 8, 2012.
SB 12-30: Concerning Administrative Matters Related to a Foreclosure Sale. This law became effective on September 1, 2012, and amends certain portions of the existing foreclosure sale laws, which changes include, among others:
- The form of Cure Statement is now provided by statute for submittal by the holder of the evidence of debt to the person executing the notice of election and demand, specifying the itemized amounts, categories and form to be used for the statement of all sums necessary to cure a default.
- Provides that a Cure Statement must be received by 12:00 noon on the day it is due to meet the deadline for that day, rather than when the public trustee's office closes operations for that day, and modifies procedures pertaining to the Cure Statement.
- Requires that a rule 120 hearing notice, comprising an order authorizing sale of the property, be posted no less than 14 days (rather than 15 days) before the hearing date, and that if a person at the residence is impeding the posting of notice, then the notice may be handed to that person to satisfy the posting requirement.
- Specifies that upon a request from the holder of evidence of debt or their attorney to restart the foreclosure action, that the public trustee is to re-record the notice of election and demand and proceed as though the foreclosure had just been commenced.
- Amends the provisions that deem unclaimed intangible property and overbids to be abandoned after a certain time period, and when such unclaimed amounts are to be handled under the "Unclaimed Property Act" rather than deposited in the county general fund.
- Amends the requirements for electronic transfer payments to an account of the public trustee to comply with the conditions placed on the account by the public trustee.
- Requires that if there is a loan servicer— who is not the holder—of the debt described in the notice of election and demand, a statement must be executed by the holder of the evidence of debt or their attorney identifying to the best of their knowledge the name of the loan servicer.
- Clarifies that bids must not only be "timely submitted" to the officer, but "received by" the officer by the deadlines.
- Specifies additional steps the public trustee must take in sending notices to owners when the amount of the excess proceeds are $25 or more, and clarifies who must hold excess proceeds and overbids until they are claimed.
- Clarifies that if there has been an assignment of the lien to the person attempting to redeem, that the original assignment, or certified copies thereof, must be attached to the notice of intent to redeem.
- Provides that a confirmation deed may be obtained at an earlier date if the officer receives all statutory fees and costs and a notice from the appropriate holder that the certificate will not be assigned.
- Contains a procedure for releasing deeds of trust recorded in the wrong county.
SB 12-38: Concerning Measures to Protect Consumers who Engage a Roofing Contractor to Perform Roofing Services on Residential Property. Effective May 15, 2012, roofing contractors offering to perform roofing work on residential property in Colorado must now sign a written contract with the property owner detailing the contractual agreement among the parties. The contract must include terms such as the scope of work, approximate dates of services, approximate costs of the services, contact information for the contractor and identification of the contractor's surety and liability coverage insurer. The new law permits property owners to rescind a contract within 72 hours after signing, and to obtain a refund of any deposit paid if rescinded. Roofing contractors are prohibited from paying or rebating insurance deductibles applicable to an insurance claim for payment of roofing work. For purposes of this law, residential property includes one- or two-family dwellings and multiple single-family dwellings not more than three stories in height with separate entrances. The statute excludes new construction and structures comprising multiple attached single-family dwellings, unless an association is responsible for the repair, maintenance, or replacement of the roof.