What does Colorado HB26-1099 require of associations leaving declarant control?

Who this obligates

The requirement attaches to a common interest community at the point control passes from the declarant, meaning the developer, to an owner-elected board. That transition is a defined event under CCIOA, and it is the trigger here. Associations well past their transition are generally outside the requirement. Associations approaching one are squarely inside it. The reserve obligations that apply to every Colorado association, transition or not, are on the Colorado reserve study requirements page.

If you are unsure where your association stands, the practical test is whether the declarant still appoints a majority of the board. If so, transition is ahead of you.

The statute

HB26-1099, as enacted and codified within the Colorado Common Interest Ownership Act at C.R.S. Title 38, Article 33.3, requires an association transitioning from declarant control to obtain an independent transition study of the common elements, together with a reserve funding analysis, within the period specified by the statute. Colorado HB26-1099. This summary is under legal review; check the enrolled bill and current C.R.S. text before acting on it.

In plain English

When the developer hands the community over, somebody independent has to look at what is being handed over and write down its condition, and somebody has to say whether the money the association has set aside bears any relationship to what those components will cost. The board cannot skip this, and it cannot use a provider with a stake in the outcome.

The deadline

The statute sets the period running from the transition of control. What that means in practice for your association depends on the date control actually passed, which is a document question rather than a calendar question: it turns on your declaration, your election records, and when the declarant's appointment rights terminated.

Boards routinely get this wrong in the same direction. They date the transition from when the developer stopped attending meetings rather than from the event the governing documents describe, and they discover the difference late. Pull the records before assuming you have time.

The independence requirement, and why it has teeth

This is the provision that changes who a board can hire, and it is the one most likely to be quietly ignored.

The purpose is straightforward. A transition study exists to tell an incoming board whether it is inheriting problems. That answer is worthless if it comes from the party that built the community, or from a contractor who will bid the repairs the study recommends. The incentive runs the wrong way in both cases.

Practically, a board should ask any prospective provider three questions and get the answers in writing:

1. Do you have any affiliation, current or past, with the declarant or the general contractor?
2. Do you or any affiliate perform construction, remediation, or maintenance work of the kind this study might recommend?
3. Do you accept referral fees, commissions, or any other compensation from contractors?

A provider that hesitates on any of the three is answering the question.

Why the timing matters beyond compliance

Colorado construction defect claims are subject to limitations and repose periods that begin to run well before most new boards are paying attention. A transition study completed promptly creates a contemporaneous, independent record of the community's condition at handover. That record is useful for reserve planning and it is considerably more useful if a dispute with the declarant develops later.

A board that waits until year three to assess what it received in year one may find that the assessment arrives after its options have narrowed. This is a question for your counsel, and it is worth asking early rather than late.

What boards should do

1. Establish your actual transition date from the documents, not from memory. The declaration and the election records govern, and the deadline runs from that date.
2. Budget for the study as a transition cost. It belongs in the first owner-controlled budget, not as a surprise in the second.
3. Screen providers on independence in writing. Ask the three questions above. Keep the answers with your transition records.
4. Involve counsel on the defect timeline. The study's value as a record depends on when it is done relative to periods your board may not know are running.
5. Commission the reserve analysis at the same time. The transition assessment produces the component inventory the reserve study needs, so doing them together costs less than doing them separately and produces a single coherent baseline.

Sources

• Colorado HB26-1099, as enrolled
• Colorado Revised Statutes, Title 38, Article 33.3 (Colorado Common Interest Ownership Act), transition of declarant control provisions
• Colorado Division of Real Estate, HOA Information and Resource Center
• Community Associations Institute, National Reserve Study Standards