Executive board members and officers - powers and duties - reserve funds - reserve study - audit
Governs the composition, powers, fiduciary standards, declarant-control transition, and budget-and-audit process of the Colorado HOA/condo executive board. Subsection (1) gives the board residual authority to act on behalf of the association and entitles every board member to all association information. Subsection (2) imposes a fiduciary duty on declarant-appointed board members and a wanton-and-willful-acts-only liability standard for owner-elected board members. Subsection (4)(a) sets the budget ratification procedure — board mails proposed budget summary to all owners within 90 days, owner meeting scheduled, budget deemed approved absent a majority veto. Subsection (4)(b) imposes audit-and-review requirements (audit required only when revenues/expenditures ≥ $250,000 AND 1/3 of owners request; review required when 1/3 of owners request). Subsection (5) sets declarant-control termination thresholds. Subsection (9) is the turnover document delivery checklist.
Reviewed · Colorado changes feed
| Ref | Requirement |
|---|---|
| (4)(a) | The board sets the budget, sends a summary to all owners within 90 days, schedules an owner meeting, and the budget passes silently unless a majority of owners affirmatively veto it at that meeting. If owners veto, the last good budget rolls forward. Owners don't have to vote yes — they have to vote no, and most never do, so most budgets pass. |
| (4)(b) | Colorado HOAs are NOT required to commission annual audits or reviews automatically. An audit happens only when the HOA is large (>$250K revenue) AND a third of owners formally request one. A review (cheaper, less rigorous) requires only the third-of-owners trigger. Small HOAs can operate with internal financials only — but they still must produce the §209.4(2)(d) annual financial statement. |
| Ref | Requirement |
|---|---|
| (1)(a) | The board is the default decision-maker for everything the association does, with three narrow exceptions in §303(3): amending the declaration, terminating the community, and electing other board members or setting board qualifications/terms. |
| (1)(b) | A board cannot keep one of its own members in the dark. Every director is entitled to every report, contract, and professional-advisor communication that any other director has access to. Bylaws cannot override this — and this applies retroactively to pre-1992 communities under §117(1)(i.7). |
| (2) | Two different liability standards. Developer-appointed directors owe a full fiduciary duty (the strict standard). Owner-elected directors are protected from liability except for wanton and willful acts — Colorado's version of business judgment with stronger protection. Indemnification is permitted but only within these limits. |
| (5)(a)(I) | The developer can control the board only during the initial build-out and sales period. Once 75% of units have been sold (or the 2-year stalling clocks hit), the developer must turn over control to owner-elected directors. Large planned communities have longer windows but the same earliest-trigger rule. |
| (9) | When the developer turns the HOA over to owners, the developer must hand over a complete document set within 60 days — including a CPA-audited accounting of all association funds (the developer pays for the audit). This is the owners' one-time chance to know exactly what they're inheriting. Boards often discover misappropriations or contractual surprises at this stage. |