First Regular Session Seventieth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 15-0293.01 Jennifer Berman x3286HOUSE BILL 15-1040 HOUSE SPONSORSHIP Thurlow, SENATE SPONSORSHIP (None), House Committees Senate Committees State, Veterans, & Military Affairs A BILL FOR AN ACT Concerning modifications to the licensing requirements of persons who manage the affairs of common interest communities under the "Colorado Common Interest Ownership Act". 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://www.leg.state.co.us/billsummaries.) Under current law, a person who performs at least one community association management practice relating to the management of a common interest community is required to obtain a community association manager license from the director of the division of real estate in the department of regulatory agencies. The bill limits that requirement in a number of ways. Section 1 of the bill redefines "common interest community" to exclude common interest communities with fewer than 200 units, those containing only units restricted to nonresidential use, and those containing only time share units. Section 1 also repeals language requiring a separate license for a chief executive officer that employs or contracts with individuals engaged in community association management practices or executives with oversight and supervision of individuals engaging in community association management practices. Finally, section 1 redefines "community association manager" to be a person who engages in 4 or more community association management practices. Section 2 requires that if more than one individual engages in community association management practices for a single common interest community then only one of the individuals is required to obtain a license, which must be a designated manager's license. Under current law, when a partnership, limited liability company, or corporation designates a manager and that manager applies for a designated manager's license, all individuals that the entity employs to engage in community association management practices must take and pass an examination in order for a designated manager's license to be issued to the designated manager. Section 3 removes the examination requirement for everyone except the designated manager. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, 12-61-1001, amend (2), (4) (a), and (4) (b) (I) as follows: 12-61-1001. Definitions. As used in this part 10, unless the context otherwise requires: (2) "Common interest community" has the meaning set forth in section 38-33.3-103 (8), C.R.S.; except that for purposes of this part 10, "common interest community" does not include a common interest community: (a) With fewer than two hundred units; (b) Containing only units restricted to nonresidential use; or (c) Containing only time share units, as defined in section 38-33-110 (7), C.R.S. (4) (a) "Community association manager" or "manager" means any person, firm, partnership, limited liability company, association, or corporation that, in consideration of compensation by fee, commission, salary, or anything else of value or with the intention of receiving or collecting such compensation, engages in or offers or attempts to engage in community management in Colorado. The term includes: (I) The chief executive officer of a business entity that employs individuals or contracts with other business entities to perform community association management services; and (II) Any executive of a business entity who has direct supervision or oversight of an individual who performs community association management services. (b) "Community association manager" or "manager" does not include: (I) A person who performs not more than one engages in three or fewer of the practices listed in paragraphs (a) to (g) (f) of subsection (3) of this section, or any clerical, ministerial, accounting, or maintenance function not requiring substantially specialized knowledge, judgment, or managerial skill, under the direct supervision and control of a licensed community association manager or of a contractor employed by a licensed community association manager or by the common interest community's executive board; SECTION 2. In Colorado Revised Statutes, 12-61-1002, amend (1) as follows: 12-61-1002. License required - rule-making authority - violations - administrative and legal remedies. (1) Effective July 1, 2015, it is unlawful for any person to engage in, or to hold out himself, herself, or itself as qualified to engage in, the business of community association management without first having obtained a license from the director in accordance with section 12-61-1003 or during any period in which the manager's license is revoked or suspended; except that, if more than one individual performs community association management duties for a single common interest community, then only one of the individuals must obtain a designated manager's license from the director in accordance with section 12-61-1003 (6) (b), and the other individuals performing community association management duties for the common interest community need not obtain a license with respect to that common interest community. SECTION 3. In Colorado Revised Statutes, 12-61-1003, amend (6) (b) as follows: 12-61-1003. Application for license - criminal history record check - examination - rules. (6) (b) A partnership, limited liability company, or corporation, in its application for a license, shall designate a qualified, active manager to be responsible for management and supervision of the licensed actions of the entity and all persons employed by, or acting at any time on behalf of, the entity. A license may not be issued to the entity unless the designated manager so designated, and all persons that the entity employs to perform community association management duties on behalf of the entity, take and pass takes and passes the examination required by this part 10. Upon these persons' the designated manager successfully passing the examination and upon compliance with all other requirements of law by the entity as well as by the designated manager, the director shall issue a designated manager's license to the designated manager. SECTION 4. Applicability. This act applies to conduct occurring on or after the effective date of this act. SECTION 5. Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.