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DEPARTMENT OF REGULATORY AGENCIES
DIVISION OF REAL ESTATE
COMMUNITY ASSOCIATION MANAGERS
4 CCR 725-7

NOTICE OF PROPOSED PERMANENT RULEMAKING HEARING
July 22, 2015
	
F RULES:  PROFESSIONAL STANDARDS - INVESTIGATIONS

Pursuant to and in compliance with Title 12, Article 61 and Title 24, Article 4, C.R.S. as amended, notice of proposed rulemaking is hereby given, including notice to the Attorney General of the State of Colorado and to all persons who have requested to be advised of the intention of the Director of the Division of Real Estate (“Director”) to promulgate rules, or to amend, repeal or repeal and re-enact the present rules related to community association managers.

STATEMENT OF BASIS

The statutory basis for the rules titled Rules Regarding Community Association Managers is Part 10 of Title 12, Article 61, Colorado Revised Statutes, as amended.  

STATEMENT OF PURPOSE

The purpose of this rule is to effectuate the legislative directive to promulgate necessary and appropriate rules in conformity with the state statutes of the Community Association Managers Practice Act.

SPECIFIC PURPOSE OF THIS RULEMAKING

The specific purpose of this rule is to promulgate rules with respect to the requirements of professional standards and ensures that community association managers are familiar with current regulations.

Proposed New, Amended and Repealed Rules

[Deleted material shown struck through, new material shown ALL CAPS. Rules, or portions of rules, which are unaffected are reproduced.  Readers are advised to obtain a copy of the complete rules of the Director at www.dora.colorado.gov/dre

F RULES:  PROFESSIONAL STANDARDS - INVESTIGATIONS

F-3) Licensee must respond to complaint or audit notice in writing.
When a CAM licensee has received written notification from the Director, or a representative of the Director, that: (1) a complaint has been filed against the  licensee, (2) the licensee has been selected for an audit, or (3) that an audit has identified record keeping or trust account deficiencies, such licensee must submit a written response to the Director. Failure to submit a written response within the time set by the Director in its notification will be grounds for disciplinary action unless the Director has granted an extension of time for the response in writing. This is true regardless of whether the underlying complaint warrants further investigation or subsequent action by the Director. The CAM’s LICENSEE’S written response must contain the following: 

1)	A complete and specific response to the factual recitations, allegations or claims made in the complaint filed against the licensee, whether made by a member of the public, on the Director’s own motion or by an authorized representative of the Director;
2)	A complete and specific response to any additional questions, allegations or claims presented in the notification letter;
3)	Any documents or records requested in the notification letter; and
4)	Any further information relative to the complaint that the licensee believes to be relevant or material to the matters addressed in the notification letter.

F-4) Immediate notification of conviction, plea or violation required. 
A CAM LICENSEE must notify the Director in writing pursuant to § 12-61-1010(1)(j), C.R.S., within 30 calendar days of any of the following: 
1)	A plea of guilty, a plea of nolo contendere or a conviction of any crime identified in § 12-61-1010(1)(i), C.R.S. 
2)	A violation or aiding and abetting in the violation of the Colorado or Federal Fair Housing Laws. 
3)	Any disciplinary action taken against the CAM in any other jurisdiction, if the CAM’s  action(s) would constitute a violation of the community association manager licensing law in Colorado. 
4)	Any practice restrictions as set forth in § 12-61-1010(1)(o) and (p), C.R.S.

F-5) Community association manager maintaining current contact information and all information required for licensing.
Each CAM LICENSEE must maintain all current contact information and all information required for licensing, in a manner acceptable to the Director, which will be included in the Division of Real Estate database. 
1)	CAM LICENSEE contact information must include, but is not limited to: 
a)	E-mail address, if applicable; 
b)	Legal first, middle and last names; 
c)	Physical home address; 
d)	Home phone number; 
e)	Physical business address; 
f)	Business phone number; and 
g)	Business name. 	
2)	Information required for licensing includes, but is not limited to:
a)	Errors and omissions insurance provider; 
b)	Errors and omissions policy number;
c)	Errors and omissions effective and expiration dates; 
d)	Crime fidelity insurance provider;
e)	Crime fidelity policy number; and
f)	Crime fidelity insurance effective and expiration dates.
3)	Within 30 calendar days of any changes, individuals required to be licensed as a CAM must update the Director with any changes to the information defined in this rule in a manner prescribed by the Director.

F-7) Designated manager responsibilities.
Designated managers’ responsibilities include, but are not limited to, the following:
1)	Maintaining all bank accounts and accounting records for any managed common interest communities.
2)	Providing reasonable supervision over the licensed activities of all employees.
3)	Taking reasonable steps to ensure that violations of statutes and the Director rules do not occur or reoccur.
4)	Taking reasonable steps to ensure a licensed CAM LICENSEE responds to any notices from the Director or its designee.
5)	Providing supervision of licensed activities for all offices operated by the CAM company.

F-10) License revoked, expired, suspended or inactivated.
Upon suspension, revocation, expiration or inactivation of a CAM license, the licensee is responsible for immediate compliance with the following:

1)	Cease any activities requiring a CAM license.
2)	Return the license to the Director. If the individual is a designated manager, inform all employed licensees of the change in license status and the effect of such change on the license status of those licensees.
3)	Cease all advertising, including, but not limited to, the use of signage, newspapers, magazines, internet, and direct mailings.
4)	Inform all common interest communities they are managing that their CAM license has expired, or has been suspended, revoked or inactivated, pursuant to § 38-33.3-402, C.R.S., not later than 5 business days after any such expiration, suspension, revocation or inactivation.
5)	Inform the common interest community and its executive board of the action taken and the impact that the change in license status will have on the common interest community, if any. 
6)	In the case of a designated manager who is being replaced by a new designated manager, the departing designated manager must properly account for and transfer all entrusted funds to the new designated manager, and provide all records and documents related to management services to the new designated manager.
7)	In the case of a designated manager who will not be replaced and the licensed CAM company will be dissolved, the designated manager is responsible for an accounting of all funds and for making all final disbursements. The CAM COMPANY is responsible for maintaining all records for 3 years.
8)	Fees earned prior to the suspension, revocation, expiration or inactivation may be retained by the licensee.
9)	Pursuant to § 38-33.3-402, C.R.S., any agreement by a common interest community to pay a fee for the services of a CAM or to hold harmless or indemnify the CAM for any act or omission in the course of providing those services is void and unenforceable for any period in which the CAM’s license is expired, suspended, revoked or inactivated.  This would not apply, however, if a CAM company had a licensed designated manager or additional licensed CAM within its company, whose license is in full force and effect, and who is providing the management services for the common interest community pursuant to a management agreement.

A hearing on the above subject matter will be held on Wednesday, July 22, 2015, at the Colorado Division of Real Estate, 1560 Broadway, Suite 110-D, Denver, Colorado 80202 beginning at 10:00 a.m.
Any interested person may participate in the rule making through submission of written data, views and arguments to the Division of Real Estate.  Persons are requested to submit data, views and arguments to the Division of Real Estate in writing no less than three (3) days prior to the hearing date and time set forth above. However, all data, views and arguments submitted prior to or at the rulemaking hearing or prior to the closure of the rulemaking record (if different from the date and time of hearing), shall be considered.
Please be advised that the rule being considered is subject to further changes and modifications after public comment and formal hearing.