Property - Digest of Bills

Digest of Bills - 2006

PROPERTY

S.B. 06-2 Residential real property - sales disclosures - use of property as methamphetamine laboratory. Requires a seller of residential real property to disclose in writing to the buyer whether the seller knows that the property was previously used as a methamphetamine laboratory unless the property has been properly remediated to meet the standards established by rules of the state board of health. Gives the buyer of residential real property the right to test the property for the purpose of determining whether the property has ever been so used. Requires the test to be performed by a certified industrial hygienist or industrial hygienist.

Specifies that, if the test results indicate that the property has been used as a methamphetamine laboratory but has not been remediated, the buyer must notify the seller and may terminate the contract. Allows the seller 30 days to conduct a second independent test. Specifies that a positive test result triggers the remediation or demolition requirements specified under current law. If the seller does not remediate the property prior to the sale, requires the buyer to provide notice on the date of closing to the department of public health and environment and to remediate the property within 90 days after the date of closing.

Makes a seller who fails to make a required disclosure at or before the time of sale and who knew of methamphetamine production on the property liable to the buyer for costs relating to remediation of the property, costs relating to health-related injuries occurring after the sale to residents of the property caused by methamphetamine production on the property, and reasonable attorney fees for collection of costs from the seller. Requires an action to be filed within 3 years after the date on which the buyer closed the purchase of the property where the methamphetamine production occurred.

Makes the act applicable to contracts for the purchase and sale of residential real property that are offered or entered into on or January 1, 2007.

APPROVED by Governor May 1, 2006
EFFECTIVE January 1, 2007

S.B. 06-71 Real property - foreclosure - limitations. Enacts the "Colorado Foreclosure Protection Act". Prohibits certain deceptive and unconscionable business practices. Requires purchasers of residences in foreclosure and foreclosure consultants to give home owners information necessary to make informed decisions regarding the potential or actual foreclosure of the residences. Specifies minimum requirements for contracts between such parties.

APPROVED by Governor May 30, 2006
EFFECTIVE May 30, 2006

S.B. 06-89 Common interest communities - homeowners' associations - allowable regulations - dispute resolution - financial records - notices - amendment of covenants - meetings - board member conflicts of interest - insurance. Clarifies provisions of Senate Bill 05-100 regarding regulation of political signs and flags in common interest communities (CICs). Allows a CIC unit owners' association (association) to prohibit the parking of commercial vehicles other than police, fire, and paramedic vehicles on community property and to limit the parking of police, fire, and paramedic vehicles so as to preserve adequate guest parking.

Prohibits an association from requiring the use of cedar shakes or other flammable roofing materials.

Simplifies provisions allowing a court to award attorney fees and costs to the prevailing party in litigation, eliminating the requirement of a claim-by-claim analysis of which party prevailed. As of January 1, 2007, requires an association to adopt a written policy for dealing with disputes between the association and unit owners, and to make the policy available to unit owners upon request.

Modifies the requirement imposed by Senate Bill 05-100 that a financial audit or review be completed within 90 days after the close of the association's fiscal year. In place of the requirement that the association's accounting records employ generally accepted accounting principles, requires that the records be kept on a cash or tax basis and be accurate and complete. Replaces the current requirement for a biennial audit or review with an optional procedure whereby a review is only required if requested by 1/3 of the unit owners, and an audit is required only if requested by 1/3 of the unit owners and the association's budget exceeds $250,000. Requires that a person conducting a review (as opposed to an audit, which must be conducted by a certified public accountant) be independent and qualified, and have at least a basic understanding of the principles of accounting based on education or experience.

In provisions specifying notice by mail and publication to first mortgagees regarding proposed changes to a CIC's governing declaration, clarifies that a preexisting process, under which amendments may be authorized by court order, is still available.

Allows supermajority provisions exceeding 67% for the amendment of covenants to continue to apply in phased CICs, declarant-controlled CICs, and CICs in which 67% or more of the votes are allocated to a single owner.

Clarifies provisions relating to notice of meetings and the opportunity for unit owners to offer their views on agenda items prior to action by the executive board. Modifies requirements for the taking of votes by secret ballot and the counting of ballots. Exempts associations whose board members are selected by delegates from secret-ballot requirements.

Replaces Senate Bill 05-100 provisions on board member conflicts of interest with provisions imported from the "Colorado Revised Nonprofit Corporation Act".

Enacts privacy protections with regard to the distribution of unit owners' names and addresses. As to other documents that the association must make available upon request, allows production of the documents at the next regularly scheduled meeting if the meeting occurs within 30 days after the request as an alternative to the current requirement that the documents be produced within 5 business days. Allows the association to charge, and to collect in advance, a fee for copies, not to exceed the association's actual cost per page.

Modifies the disclosure requirements for the seller of a home in a CIC. In the case of a failure to provide full disclosure, makes it an affirmative defense that the purchaser had actual or constructive knowledge of the facts and information required to be disclosed. Allows the seller to authorize the association to provide to the purchaser any association documents listed in the real estate contract upon payment of the association's cost for copies.

In provisions allowing a unit owner to file a claim against the association's property insurance policy to the same extent as a named insured, places conditions on the exercise of that right by requiring the unit owner first to contact the association and to give the association a reasonable opportunity to respond and inspect the damage. Prohibits an insurer from considering a clarification-of-coverage inquiry by a unit owner when setting premiums to be charged to the association.

APPROVED by Governor May 26, 2006
EFFECTIVE May 26, 2006

S.B. 06-105 Buildings - elevators and escalators - regulation - repeal of regulation under sunset law. Creates the "Elevator and Escalator Safety Act" (act). Declares the regulation of mechanical conveyances to be a matter of statewide concern. Specifies the types of mechanical conveyances to which the act applies.

Requires conveyance mechanics, contractors, and inspectors to be certified and sets qualifications for certification. Imposes fees for certification. Prohibits a person from constructing, removing, or servicing a conveyance unless the person is certified. Allows persons who are qualified, though not necessarily certified, to work on conveyances in an emergency or in the case of a shortage of certified mechanics.

After a hearing upon 10 days' notice, authorizes the director of the division of oil and public safety, who is the administrator of the act ("administrator"), to impose civil penalties or suspend or revoke a certification if the certified person fraudulently obtains certification, fails to notify the administrator of a noncomplying conveyance, or otherwise violates the act. Authorizes the subject of a hearing to appeal the outcome of the hearing to the administrator.

Requires existing conveyances to be registered by July 1, 2007, and conveyances constructed or installed on or after July 1, 2007, to be registered before being placed in service. Authorizes the administrator to set registration fees to offset the cost of registration. Credits registration fees to the newly created conveyance safety fund.

Requires certificate holders to comply with the fire code adopted by the administrator. Instructs the administrator to promulgate rules for the construction, alteration, repair, service, and maintenance of conveyances.

Requires the owner of property where a new conveyance is located to obtain a certificate of operation to operate the conveyance. Sets standards, including an inspection by a certified inspector, for the issuance of a certificate of operation. Requires the administrator to promulgate rules regarding the periodic inspection of conveyances.

Clarifies that the act does not affect a conveyance owner's or operator's liability.

Establishes punishment for violations of the act. If a conveyance is deemed to be dangerous, authorizes the administrator to notify the owner or lessee and order alterations or additions found to be necessary. Allows an owner or lessee to temporarily shut down a conveyance in lieu of making such ordered changes. Requires the owner or lessee to make the conveyance safe before returning it to use.

Repeals the requirement for regulation and certification of conveyances and for the certification of conveyance mechanics, contractors, and inspectors on July 1, 2017, pursuant to the provisions of sunset law.

VETOED by Governor May 26, 2006

H.B. 06-1254 Co-ownership of real property - joint tenancy - tenancy by the entirety.Clarifies the ways that a joint tenancy in real property is created or is presumed to be created. Establishes that any conveyance to 2 or more persons that does not create or is not presumed to create an estate in joint tenancy shall be a tenancy in common. Modifies the procedures for proving the death of a joint tenant.

Prohibits a conveyance of real property from creating a tenancy by the entirety. Establishes that a conveyance executed before July 1, 2006, that purports to create a tenancy by the entirety shall be presumed to create a joint tenancy and a conveyance executed on or after July 1, 2006, shall create a joint tenancy.

APPROVED by Governor March 31, 2006
EFFECTIVE July 1, 2006

H.B. 06-1268 Abandoned graves - right of cemetery to reclaim. Allows a cemetery corporation, cemetery authority, cemetery district, or municipality that maintains a cemetery (cemetery) to reclaim title to a lot, grave space, niche, or crypt in the cemetery in which no remains have been interred, no burial memorial has been placed, and no other improvement has been made for a continuous period of at least 75 years.

Requires a cemetery seeking to reclaim title to a lot, grave space, niche, or crypt to:

● Send written notice to the owner's last-known address by first-class mail; and

● Publish a notice in a newspaper of general circulation in the area in which the cemetery is located once per week for 4 weeks.

Specifies the provisions to be included in the notice. States that if the cemetery does not receive from the owner of the lot, grave space, niche, or crypt a letter of intent to retain ownership within 60 days after the last publication of the notice, all rights and title to the lot, grave space, niche, or crypt shall transfer to the cemetery. States that the cemetery may then sell, transfer, or otherwise dispose of the lot, grave space, niche, or crypt without risk of liability to the prior owner. States that if a person submits a valid claim to a lot, grave space, niche, or crypt that the cemetery has reclaimed, the cemetery shall transfer to the person at no charge an equivalent lot, grave space, niche, or crypt to the extent possible.

Prohibits a cemetery from conveying title to the real property surveyed as a lot in a cemetery for use as a burial space. Allows a cemetery to grant interment rights to a lot, grave space, niche, or crypt in a cemetery.

APPROVED by Governor April 13, 2006
EFFECTIVE August 7, 2006
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see page vi of this digest.

H.B. 06-1387 Real estate foreclosures. Modifies the law of real estate foreclosure in the following areas:

Public trustees

Clarifies the fees that a public trustee is entitled to receive for processing a foreclosure. Allows a public trustee to collect:

● A fee of $50 for processing an administrative withdrawal of a foreclosure;

● A fee of $100 for processing a partial release of property from a deed of trust; and

● Reimbursement for the public trustee's expenses in processing a foreclosure.

Allows the public trustee to retain from moneys received as fees the amount necessary to pay staff wages and any benefits provided pursuant to the county's personnel policy.

Expands the types of accounts that a public trustee may establish to include:

● An automated clearing house account;

● An escrow account;

● A custodial account; and

● Accounts with a savings and loan association.

Allows a public trustee to transfer moneys electronically to the attorney for the person commencing a foreclosure (holder of an evidence of debt).

Commencement of foreclosure proceedings

Requires a holder of an evidence of debt or the holder's attorney to file the following documents with the public trustee in order to foreclose on a property:

● A signed notice of election and demand;

● The original evidence of debt, along with any indorsement or assignment, or in lieu of the original evidence of debt a corporate surety bond or a copy of the evidence of debt certified by a specified institutional holder of the evidence of debt (qualified holder);

● The original recorded deed of trust securing the evidence of debt, or in lieu of the original deed a copy of the deed certified by the county clerk and recorder or by a qualified holder;

● A notice of sale, right to cure, and right to redeem (combined notice); and

● A mailing list of persons entitled to receive the combined notice (mailing list).

Clarifies the provision under which a qualified holder that forecloses without the original evidence of debt or the original recorded deed of trust or a certified copy of the deed indemnifies persons who are liable on the debt and persons who rely on a sale if the original evidence of debt or a certified copy is subsequently presented for payment.

Allows a holder of an evidence of debt to foreclose a deed of trust against a portion of the property encumbered by the deed of trust only if the portion is encumbered as a separate parcel or lot.

Requires a notice of election and demand commencing a foreclosure to contain the following:

● The names of the original grantors of the deed of trust and the original beneficiaries or grantees;

● The name of the holder of the evidence of debt;

● The date of the deed of trust;

● Information on the recording of the deed of trust;

● The amount of the original principal balance of the secured indebtedness;

● The amount of the outstanding principal balance;

● A description of the property;

● A statement of whether the property described in the notice of election and demand is all or a portion of the property encumbered by the deed of trust;

● A statement of the violation of the covenant of the evidence of debt of deed of trust on which the foreclosure is based; and

● The name, address, and bar registration number of the attorney for the holder of the evidence of debt.

Allows a holder of an evidence of debt consisting of multiple instruments to foreclose on only some of the instruments. Allows a holder of an evidence of debt to assign or transfer the debt at any time while a foreclosure action is pending. Allows a portion of the property to be released from the deed of trust being foreclosed.

Allows the public trustee to require the holder of an evidence of debt to pay a deposit against the public trustee's fees and costs. Authorizes the public trustee to allow the holder's attorney to establish one or more accounts with the public trustee for the payment of fees and costs to the public trustee and the transfer of moneys to the holder.

Notice of foreclosure

Requires the public trustee to record a notice of election and demand received by the public trustee with the county clerk and recorder within 10 days and to retain a copy of the notice, which shall be available for public inspection.

Requires the public trustee to mail a combined notice no more than 20 days after the recording of the notice of election and demand to the following persons:

● The original grantor of the deed of trust or obligor under any other lien being foreclosed;

● Any person personally liable under the evidence of debt; and

● The occupant of the property.

Requires the public trustee to mail a combined notice between 60 and 45 days before the first scheduled date of sale to the following persons:

● The original grantor of the deed of trust or obligor under any other lien being foreclosed;

● The owner of the property as of the recording of the notice of election and demand or lis pendens;

● Any person personally liable under the evidence of debt;

● The occupant of the property; and

● Each person who appears to have a recorded interest in the property that may be extinguished by the foreclosure.

Requires a sheriff to mail a combined notice between 16 and 30 days after receiving a mailing list and a decree of foreclosure or writ of execution directing the sheriff to sell property to the following persons:

● The original grantor of the deed of trust or obligor under any other lien being foreclosed;

● The owner of the property as of the recording of the notice of election and demand or lis pendens;

● Any person personally liable under the evidence of debt;

● The occupant of the property; and

● Each person who appears to have a recorded interest in the property that may be extinguished by the foreclosure.

Specifies the content of the combined notice. Requires the public trustee or sheriff processing a foreclosure (officer) to publish the combined notice once each week for 5 consecutive weeks in a newspaper of general circulation. Directs the officer to review publications of the combined notice for accuracy.

Cure of default

Allows the following persons to cure a default for nonpayment under an evidence of debt, deed of trust, or other lien being foreclosed in specified circumstances:

● The owner of the property;

● The property owner's spouse, heir, personal representative, legal guardian, or conservator;

● An entity affiliated with the property owner;

● The owner of the property as a result of a merger or similar event occurring after the commencement of the foreclosure;

● A person entitled to the property under a court order as a result of a divorce, property settlement, quiet title action, or similar proceeding occurring after the commencement of the foreclosure;

● A person liable under the evidence of debt;

● A surety or guarantor of the evidence of debt;

● The holder of an interest junior to the lien being foreclosed or a contract vendee of the property, if the instrument evidencing the interest was recorded before the recording of the notice of election and demand or lis pendens.

If the officer receives a notice of intent to cure, requires the attorney for the holder of an evidence of debt or the holder to file with the officer a statement of the amount required to cure the default. Imposes a fine of $150 or 1/32 of 1% of the outstanding principal balance on a holder of evidence of debt who receives a request for a cure statement more than 30 days before the date of sale but fails to file the statement within 10 days after the request.

Increases the amount of time a property owner or debtor has to cure a default by increasing the time between the commencement of a foreclosure and the initial date of the sale from 45-60 days to:

● 110-125 days for a sale of nonagricultural property by the public trustee;

● At least 110 days for a sale of nonagricultural property by the sheriff;

● 215-230 days for a sale of agricultural property by the public trustee; and

● At least 215 days for a sale of agricultural property by the sheriff.

Foreclosure sale

Modifies the required form and content of the bid. Requires the officer to make the holder's bid available to the public. Requires the holder to bid an amount that is no less than the holder's good faith estimate of the fair market value of the property, less unpaid taxes, net expenses of maintaining and selling the property, and amounts secured by senior liens, up to the amount due to the holder. Requires bidders other than the holder to tender the amount of their bid at the time of sale or at another time on the day of the sale as directed by the officer. Specifies the allowable fees and costs of the foreclosure.

Prohibits a provider of a property inspection, broker's price opinion, appraisal, insurance, repair, or maintenance service or product from paying or providing to a holder of an evidence of debt any remuneration in connection with a foreclosure in which such a service or product was used unless the total value of the remuneration is shown and credited against amounts owed to the holder in a bid, cure statement, or redemption statement.

Establishes a procedure for the officer to determine whether property is agricultural if it is not clear from the legal description.

Specifies the procedures for a public trustee to conduct a foreclosure sale. States that the proceeds from a foreclosure sale in excess of the amount of the holder's bid plus fees and costs shall be paid after the expiration of all redemption periods:

● First, to the holder of the evidence of debt to the extent of any deficiency as indicated in the holder's bid;

● Second, to each junior lienor, in order of recording priority, who filed a notice of intent to redeem or was not redeemed in full, up to the amount of the lien, plus fees and costs; and

● Third, to the owner of the property.

Directs the officer to execute and record a certificate of purchase within 5 days after the sale. Specifies the content of the certificate.

Continuance of sale

Directs the officer to continue a foreclosure sale at the request of the holder of the evidence of debt or the holder's attorney in order to correct errors in the notice of sale or for other good cause. Automatically continues a sale not held on the scheduled date from week to week until the sale is held or continued by the officer. Increases from 6 to 9 months the maximum time that a sale can be continued from the originally scheduled date, except when required during a bankruptcy proceeding.

States that a sale that is not held on the scheduled date and is not continued by the officer is continued for one-week intervals until the sale is held or continued by the officer, unless the sale is stayed by bankruptcy proceedings. States that a sale shall not be continued to a date later than 9 months after the date designated in the combined notice, except as a result of bankruptcy proceedings.

Directs the officer to continue a sale if the holder of the evidence of debt fails to file a cure statement in the required time.

Withdrawal and termination

States that the foreclosure shall be deemed withdrawn or dismissed if the cure statement is not filed by 12 noon on the 7th day before the last permitted date of sale.

Allows the holder of an evidence of debt or the holder's attorney to terminate a foreclosure by filing a written withdrawal of the notice of election and demand with the public trustee. Allows the public trustee to withdraw the notice of election and demand if no sale is held and the holder does not withdraw the notice.

Electronic documents

Allows an officer to accept any document or record related to a foreclosure in electronic format and to make any document or record available to the public in electronic format. Directs the officer to establish and uniformly apply policies determining whether and the extent to which the officer shall accept documents or records in electronic form. Prohibits an officer from requiring the use of an electronic format for any purpose.

Redemption

Eliminates the right of the owner of foreclosed property to redeem the property after sale. Allows a lienor to redeem the property if:

● The lienor's lien is a deed of trust or other lien created or recognized by state or federal law or by judgment of a court;

● The lien is a junior lien;

● The lien was recorded before the commencement of the foreclosure and the lienor would be entitled to cure; and

● The lienor files a notice of intent to redeem, along with certain documents, within 10 days after the foreclosure sale, except in certain circumstances.

If a lienor files a notice of intent to redeem, requires the purchaser of the property at the foreclosure sale to provide a statement of the amount necessary to redeem the property. Allows the officer to calculate the amount necessary to redeem if the purchaser fails to provide the statement.

Allows the junior lienor with the most senior recorded lien to redeem the property by paying to the officer the amount for which the property was sold, plus interest, fees, and costs, between 15 and 20 business days after the sale. Gives each subsequent lienor who is entitled to redeem 5 business days to redeem the property. Authorizes the officer to accept a lesser amount with the agreement of the holder of the certificate of purchase or certificate of redemption. Directs the officer to execute and record a certificate of redemption upon receipt of a redemption payment.

Requires a lienor with a lien on less than all of the property to redeem the entire property.

Miscellaneous provisions

In an action to terminate the interest in property of a party who was omitted from the foreclosure proceeding, requires the court to give full consideration to whether the party had actual notice of the foreclosure and was given the opportunity to exercise rights to cure or redeem.

States that an officer is not liable for determining:

● The amount or reasonableness of a bid, cure amount, or redemption amount;

● The accuracy of the legal description of property in a release of a deed of trust;

● The accuracy or completeness of a mailing list submitted to the officer; or

● The legal sufficiency of the property description in a notice of election and demand.

States that a waiver of or agreement to shorten the period to exercise the right to cure a default that is made before the date of a default is void as against public policy.

Authorizes a public trustee to provide to property owners, debtors, and the general public information concerning foreclosures, including available community resources and foreclosure prevention information, that is approved by the attorney general, a government agency, or the public trustee's attorney. Allows the public trustee to charge the property owner or debtor a fee of up to $25 for providing such information.

States that liens for taxes due to the state, except liens on income taxes withheld, may be divested by a foreclosure and that the state shall have the same redemption rights as other lienors in the foreclosure.

In an action for possession of foreclosed property, directs the court to enter a default judgment in favor of the plaintiff if the defendant fails to file an answer to the complaint.

APPROVED by Governor June 1, 2006
EFFECTIVE June 1, 2006

H.B. 06-1411 Eminent domain - definition of "public use" - burden of proof in condemnation actions - blight. Clarifies that, without the consent of the owner of the property, private property shall not be taken or damaged by the state or any political subdivision for a public or private use without just compensation.

Excludes from the meaning of "public use" the taking of private property for transfer to a private entity for the purpose of economic development or enhancement of tax revenue. Specifies that private property may otherwise be taken solely for the purpose of furthering a public use.

Specifies that, by enacting the act, the general assembly does not intend to create a new procedural mechanism to bring about the condemnation of private property. Specifies that, by enacting the act, the general assembly intends to limit only as provided in the act, and not expand, the definition of "public use".

Specifies that nothing in the act shall affect the right of a private party to condemn property as otherwise provided by law.

Specifies that, in any condemnation action, without the consent of the owner of the property, the burden of proof is on the condemning entity to demonstrate, by a preponderance of the evidence, that the taking of private property is for a public use, unless the condemnation action involves a taking for the eradication of blight, in which case the act requires the condemning entity to demonstrate, by clear and convincing evidence, that the taking of the property is necessary for the eradication of blight.

Specifies that any condemnation action commenced by an urban renewal authority shall satisfy the requirements of the act. In the case of a conflict between the provisions of the urban renewal law and the provisions of the act, specifies that the provisions of the act shall control.

APPROVED by Governor June 6, 2006
EFFECTIVE June 6, 2006