Q: If an association decides to implement the $400 annual homeowners assessment to avoid complying with all of the details in CCIOA, does it prohibit one-time, or special assessments?

A:  CCIOA states that if a planned community (i.e., single family or townhome community) created in this state after July 1, 1998, provides in its declaration, that the annual average common expense liability of each unit restricted to residential purposes, exclusive of optional user fees and any insurance premiums paid by the association, may not exceed $400, as adjusted per CCIOA, it is only subject to a very limited number of provisions of CCIOA.  Such a limitation must be in the declaration.

CCIOA defines common expenses as expenditures made or liabilities incurred by or on behalf of an association, together with any allocations to reserves.  This definition is very broad, and would include expenditures for capital improvements or other major expenses which may be funded through a special assessment.  Accordingly, the $400 cap would limit the total amount of assessments imposed on owners in any given year, regardless of whether the assessment takes the form of a regular, annual assessment or a one-time special assessment, or both.

If an association is a limited expense community, and it imposes an assessment that exceeds the statutory cap, that does not necessarily mean the association is suddenly subject to all of CCIOA.  Rather, any assessments imposed in excess of the cap may be unenforceable and uncollectible.

Also, note, there is a similar exemption for planned communities created on or after July 1, 1992, but before July 1, 1998, if the declaration provides that the annual average common expense liability of each unit restricted to residential purposes, exclusive of optional user fees and insurance premiums, may not exceed $300. 

Q:  Can our board amend the bylaws to state that a director can be removed by the board?

A:  In most cases, the answer is no.  Pursuant to the Colorado Revised Nonprofit Corporations Act (CRS 7-128-108), any director elected by the members may only be removed by the members regardless of whether the bylaws provide otherwise.  One exception to the above rule is a director elected/appointed by the board (i.e. to fill a vacancy).  Such director may be removed by the remaining board members as long as the vacancy filled by that director was not a vacancy of a board member elected by the homeowners.  If it is, only the owners can removed the director.

You additionally inquired whether the board can amend the bylaws to dictate how directors are removed.  Again, the bylaws cannot be amended to allow directors to unilaterally remove other directors except as provided above.  Furthermore, the Nonprofit Act requires that the number of votes needed to remove directors must be as high as the number of votes required to elect the directors.

If your community was created after July 1, 1992, the Colorado Common Interest Ownership Act requires (regardless of what your bylaws say) a vote of 67% of all owners present in person or by proxy at a meeting (where there is at least quorum present) to remove directors.

Based on the foregoing, there is very little a board can customize with respect to director removal.  Therefore, if this is something your board is interested in doing, the association's legal counsel should be consulted.

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