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

EMERGENCY RULE

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 emergency 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 Real Estate to promulgate rules, or to amend, repeal or repeal and re-enact the present rules related to community association managers.

Section 1.	Statement of Basis and Authority
Section 2. 	Scope and Purpose
Section 3.	Applicability
Section 4. 	F Rules – Professional Standards - Investigations 
Section 5. 	Effective Date

Section 1. 	Statement of Basis and Authority

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.  

Section 2.	Scope and Purpose

The Director of the Division of Real Estate (“Director”) finds that immediate adoption of this emergency rule is imperatively necessary to comply with state law, including §§ 12-61-1001, C.R.S., et seq. (the “Act”) and that compliance with the rulemaking requirements of § 24-4-103, C.R.S., applicable to non-emergency rules, would be contrary to the public interest.

In 2013, the General Assembly enacted House Bill 13-1277, which requires licensing for anyone who engages in certain defined activities of a “community association manager” relating to the management of a common interest community.  Individuals needing to be licensed must do so by July 1, 2015.  As a result of the passage of HB 15-1343, which modifies the Act by redefining the licensed activities of a community association manager, it is imperatively necessary that the Director promulgate rules pertaining to the requirements needed for licensure on an emergency basis.    

The purpose of this emergency rule is to ensure compliance with §§ 12-61-1001, C.R.S., et seq., and is to effectuate the legislative directive to promulgate necessary and appropriate rules for the implementation of part 10 of Title 12, Article 61.

The specific purpose of the emergency rules is to promulgate rules with respect to the requirements of professional standards of a community association manager license.

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Without the immediate adoption of the emergency rules, the public’s interest is not served.  Wherefore, pursuant to § 24-4-103(6), C.R.S., the Director has stated needs to adopt these emergency rules.

Section 3.	Applicability

The emergency rules govern community association managers who are subject to the requirements of Part 10 of Title 12, Article 61 of the Colorado Revised Statutes.

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

Section 4.	F RULES – PROFESSIONAL STANDARDS - INVESTIGATIONS

F Rules – Professional Standards – Investigations

F-3) Licensee must respond to complaint or audit notice in writing.
When a 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 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 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 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)	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 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 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 license, the licensee is responsible for immediate compliance with the following:

1)	Cease any activities requiring a 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 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.

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Section 5.	Effective Date
This emergency rule is effective May 21, 2015.