Nearly half of Colorado lives in neighborhoods governed by homeowners associations, which have the authority to levy fines and even file for foreclosure against residents. Yet the state has done little to ensure that HOAs are not abusing this power.

This article was produced for ProPublica’s Local Reporting Network in partnership with Rocky Mountain PBS. Sign up for Dispatches to get stories like this one as soon as they are published.

It was Christmastime in 2021, and Michael St. James didn’t feel much like celebrating.

From his top-floor condo overlooking Denver’s Capitol Hill neighborhood, St. James said he spent much of his time in the final weeks of December trying to recover nearly $30,000 that had disappeared from the bank account of his condo’s homeowners association.

“Half of the board has checked out for the year. ... The bankers are about to go on vacation, too,” said St. James, who volunteers as the HOA’s board president. “Meanwhile, every day, I’m looking at the bank account, like, ‘What’s going on?’”

More than eight months later, the London House HOA said it still has not recovered its funds. The HOA realized its money was missing, St. James said, when he asked its management company if he could use the association’s bank card to pay for building expenses.

The company, Mastino Management, replied he should not use the card because the community’s account was restricted by the bank over “some fraud activity.” St. James said he followed up with the bank, which told him that Mastino had reportedly paid $29,996 out of the HOA’s funds to a “fraudster” after receiving a “compromised email” with an invoice requesting immediate payment.

The HOA said the transaction was so large it exceeded the balance of the association’s operating account, funded by monthly dues and other fees paid by owners of the building’s 65 units. Records gathered by the HOA show the bank reached out to Mastino several days after it processed the payment because the community’s account was overdrawn, and Mastino authorized the bank to take $20,000 out of the community’s reserves to cover the transaction. It was a payment so large that, under the community’s rules, the board would need to sign off on the expenditure and transactions, but the board told Rocky Mountain PBS and ProPublica that Mastino never asked.

The board fired Mastino in February. St. James said the company has since refused to provide the HOA with its accounting records and has also yet to provide proof of the emailed invoice to the HOA. Mastino reported the incident to police in Aurora, where the company’s office is located, but an investigator closed the case after police said the company failed for months to provide bank statements for the transaction, despite repeated requests.

About two months after its funds disappeared, the board reached out to the office of Denver’s district attorney for advice. The office’s staff advised the board to file a complaint with the HOA office in the Colorado Department of Regulatory Agencies (DORA).

The board put together a detailed complaint, attaching the evidence it had gathered, and sent it to regulators. A few weeks later, it received an email reply it still struggles to understand: Like every other complaint received by the state HOA office this year, London House’s concerns could not be investigated. That’s because HOA managers, also known as “community association managers,” are no longer subject to any government oversight in Colorado.

“I feel like we have done every single thing we were supposed to do,” St. James said. “And yet we don’t seem to get any remedy for getting ripped off for $30,000.”

State records show the majority of Colorado’s 10,000-plus HOAs hire professional companies to handle their community’s day-to-day needs, delegating a great deal of responsibility — and power — to them. Management companies often have direct access to an association’s bank accounts, collect dues from homeowners, arrange for repairs and maintenance, and enforce the community’s rules by assessing fines and fees.

A review of complaints submitted this year to the state HOA office shows homeowners targeted their ire at management companies more often than the resident-run boards that make decisions for their communities. Rocky Mountain PBS and ProPublica obtained and reviewed 86 complaints submitted to the state HOA office through its online portal in the first half of the year and found more than 48% of them were directed at management companies. About a third were directed at boards, and 11% complained about both boards and management companies.

Michael St. James volunteers as the board president of the London House HOA. Credit: Jeremy Moore/RMPBS

The complainants alleged that management companies jeopardized the sale of their property, withheld association records from homeowners, held shadowy elections and didn’t provide explanations for large increases in dues. One homeowner submitted a link to a YouTube video showing a flooded yard, saying the management company was slow to respond to a water main break. One board had a complaint similar to London House’s: Once it fired its management company, the company was refusing to turn over the community’s records.

In a statement to Rocky Mountain PBS and ProPublica, Mastino said it made “several attempts” — through London House’s attorney — to return the HOA’s accounting records. But “no response was provided,” the company said.

Mastino also noted that it “was instructed” to let its bank handle providing documentation for the police investigation. Mastino did not answer questions about who had provided this instruction.

In its statement, Mastino also alleged that London House still owes the company payment for management services that it had provided.

The HOA said it cannot determine how much it may owe Mastino until it receives its accounting records. The HOA’s attorney said Mastino’s statement that it had made several attempts to return those records is “not accurate.”

When similar disputes arise with management companies, many residents, including board members, said they feel they have little recourse. Some residents said they have had to pay larger dues because of management companies’ mismanagement.

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“Who is the department that is supposed to make sure that the law is followed, and if it is not, who investigates to see whether or not it was a misunderstanding or whether it’s someone materially breaching that law on purpose?” St. James said. “I’ll jump to the end of the story: There is nobody.”

Officials at the state HOA office, known formally as the HOA Information and Resource Center, said they are accustomed to hearing that kind of reaction.

“Some members of the public can say, ‘Well, then, why did I take the time to do this?’” said David Donnelly, Colorado’s HOA information officer. “I explain to them what we do with the statistical data that we collect, which is that we collect that into a report and provide it to the legislature so that the legislature can act if they deem appropriate. Which is important.”

But the legislature, and the governor, apparently have not deemed it appropriate. Proposals to regulate community association managers have failed to become law in two of the four previous legislative sessions.

Stan Hrincevich, who runs Colorado HOA Forum, an online resource for homeowners, said he hears concerns from homeowners almost daily. “We have nearly a $3 billion HOA industry with no oversight and plenty of abuse,” he said. “Something needs to be done one day.”

It Wasn’t Always This Way

In February 2018, a complaint came in to Colorado real estate regulators at the Department of Regulatory Agencies, saying that the manager of an HOA management company called ProActive Community Management was misappropriating money from HOAs.

The state sent the complaint to ProActive’s manager and asked her to respond. But she did not respond, state records show. Eventually, a state investigation revealed about two dozen unauthorized payments and transfers the manager had made from the funds of seven different HOAs.

The state revoked the manager’s license, effectively putting her out of business, and handed her an $11,500 fine.

ProActive and its manager could not be reached for comment.

That kind of discipline is no longer possible in Colorado. It happened during a four-year window in which the state had regulatory authority over community association managers. But the window closed in 2019 when Gov. Jared Polis vetoed a bill that would have extended a program that required anyone managing a community association to be licensed.

Under the expired law, in order to obtain a license, managers were required to take classes or obtain professional credentials, pass an exam, pass a criminal background check and pay a fee to the state. Managers were also required to meet continuing education requirements to maintain their licenses.

Rep. Brianna Titone, an Arvada Democrat, had proposed extending the program because of her experience serving as the president of her HOA board.

“It’s the first level of protection for me as a board member, and to the people in the community, to have a manager who really knows what they’re doing,” Titone said. “Now there’s more people getting into this business who don’t know the business and are not vetted in a way that would make it safe for them to be in a community. That’s what we were trying to prevent.”

The state said it received 1,319 complaints about the 1,638 community association managers who were licensed during the duration of the program. Regulators disciplined 98 managers in that time. Eight managers either had their licenses revoked or voluntarily surrendered them.

Polis’ veto came as a shock to many. One HOA attorney, Molly Foley-Healy, blogged that she saw “a significant decrease in basic management mistakes and oversights” during the period when managers were licensed and said the decision “set back the entire industry and important consumer protections.”

In a letter explaining his veto, Polis said, “The data we have reviewed does not demonstrate that regulating community association managers has had the intended effect of reducing harm to consumers,” and he argued that licensure requirements can create undue barriers to employment for Coloradans, as well as extra costs passed along to homeowners. He directed the Department of Regulatory Agencies to study whether licensure would protect consumers in the future.

A subsequent review conducted by the state recommended regulating the HOA management industry — echoing similar recommendations in two prior state reports examining HOA issues.

In response to the latest recommendations, Titone brought forward another proposal to revive licensure in the most recent legislative session. She tried to take what she thought would be a lower-cost approach by requiring companies, rather than individual managers, to be licensed. But the bill died in committee.

“This issue is a really, really tough issue,” Titone said. “There’s little appetite for change in the legislature because of the lobbying efforts.”

Rep. Brianna Titone proposed the extension of a program that required community association managers to be licensed. Credit: Jeremy Moore/RMPBS

The governor’s office said Polis “continues to support efforts to reduce the power of HOAs from oppressing homeowners,” and it noted that he signed significant legislation to limit foreclosures initiated by HOAs this year.

When asked if Polis would support future efforts to bring regulation back to the HOA management industry, the governor’s office responded with a statement, which reads in part:

“In the future, the Governor hopes more legislation comes to his desk that limits HOAs from preventing homeowners from making positive changes such as installing zero-scaping and turf, which would create a more sustainable water future for Colorado.”

Even those in the industry who opposed the governor’s 2019 veto said it would be difficult and costly to go back now.

“To ask [community association managers] and community association management companies to spend the funds and time necessary to retake these courses and related examinations for a new licensure program would be wrong,” Foley-Healy told Rocky Mountain PBS and ProPublica. Instead, she said, boards should be asking prospective managers about the training and certification they have obtained.

At committee hearings for Titone’s latest proposal, opponents — who mainly represented the industry — argued that only a tiny percentage of licensed HOA property managers were disciplined during the window the state regulated them. They also said regulation would add costs for homeowners and is largely unnecessary, pointing to the relatively small numbers of complaints received annually by the state’s HOA office.

“Last year, [the state HOA office] reported a 28% reduction in complaints,” testified John Krueger of Associa, a national community association management company. “I’ve yet to see or hear any data or evidence that there is a significant problem with this profession in Colorado requiring this licensure program.”

Titone has taken to calling the HOA Information and Resource Center “the office of shoulder to cry on,” because it can’t do much more than listen to complaints and count them. She believes it’s unfair to draw conclusions about how many problems exist in HOAs from the numbers of complaints gathered by an office that cannot investigate or mediate the disputes. Many homeowners may not file complaints at all, she said, because they see it as a waste of time or they are unaware that the office exists.

“It’s hard to measure because nobody calls the office. Nobody cries on the shoulder. They don’t believe it does anything, because it doesn’t. ... The same sad song plays on and on,” Titone said.

The Colorado Department of Regulatory Agencies responded to London House’s complaint by saying that it could not investigate. Credit: Obtained by ProPublica and RMPBS

Donnelly said that, while his office does not have the authority to investigate complaints or intervene in disputes, it provides educational resources and carefully responds to people who come forward seeking help.

“I do provide a response to that individual, helping them by providing some resources or information that might help aid them in their next steps,” Donnelly said. “While I can be a shoulder to cry on, I don’t think that that’s me really doing my job very well if that’s all that I provide.”

Donnelly said he frequently has to explain to homeowners and board members that HOA law in Colorado is a civil matter — meaning enforcement of the law can require a homeowner to seek mediation or file a lawsuit.

“If a board is not doing what they should be doing, it would be incumbent on a homeowner to raise that through perhaps a small claims case or a county court or district court lawsuit, if that is appropriate,” Donnelly said.

Titone said litigation isn’t an option for everyone: “The only recourse that people have is to take people to court, and taking people to court is expensive. ... If you’re a private citizen or an HOA that just had $30,000 stolen from you, do you have the resources to fight this company?”

Homeowners Pay the Price

On a Tuesday night in August, about two dozen homeowners took seats on white folding chairs inside the clubhouse at the Traditions community in Aurora. The HOA board president took note of a larger-than-normal turnout for a monthly board meeting and noted that an update about the community’s former management company was last on the agenda. “That’s why a lot of you are here,” Ken Haldeman said.

The HOA’s social committee reported on a successful movie night and announced plans for a dog swimming event once the community pool closes for the season after Labor Day. The board discussed a plan to reduce vandalism at the clubhouse with security cameras and a proposal to add speed humps to some heavily trafficked neighborhood roads.

With all of its regular business out of the way, Haldeman turned to the topic he figured most of his neighbors had gathered to hear.

The Traditions Filings 1-7 Master Association, a sprawling master-planned community of more than 900 homes near Aurora’s expanding eastern edge, had filed a lawsuit against its former management company, Mastino, and its owner Kimberly Bacon. Haldeman read key passages from the lawsuit.

“$757,885.40 of Association funds that were supposed to be deposited into the Association’s accounts were, instead, deposited into Mastino’s bank account ... and not repaid to the Association,” Haldeman read. Neighbors shook their heads. “Dude!” one resident exclaimed upon hearing the dollar amount. Board members asked homeowners to refrain from posting on the matter on social media. The board declined to comment for this story.

“We’ve worked two years to get to this point,” Haldeman said.

Traditions, according to a police report, cut ties with Mastino in the summer of 2020 citing “increasing problems with them getting work completed.” The HOA said it discovered during the transition to new management that Mastino had failed to pay more than $150,000 in bills and left less money in the HOA’s bank account than the board expected. Faced with a financial crunch, homeowners are now paying about 28% more every month for their dues.

“The average homeowner in Traditions has lost faith in the process. They feel that the process has abandoned them by the inability to investigate or pursue the recovery of their funds,” Traditions attorney Brian Matise told Rocky Mountain PBS and ProPublica, when approached about the lawsuit. He said the community has spent tens of thousands of dollars so far in an effort to recover its funds.

In a statement, Mastino said the company will soon file a response to the lawsuit, including a counterclaim against Traditions and third-party claims against the HOA’s bank, as well as “one other person who was in charge of the Traditions account.” The company said the record will “completely exonerate” Mastino and will include a letter from AppFolio, an HOA accounting software provider, which confirms that Mastino did not initiate the deposits of the funds to its account.

“This lawsuit arose from a despute [sic] in which the Traditions Board refused to pay their vendors and overspent beyond their ability to pay. One of the parties they have not paid includes Mastino,” the statement read, in part. Mastino “takes their direction from the Boards they work with. If they are refusing to pay bills, [Mastino] can’t pay them.”

Traditions filed its lawsuit after Aurora police closed the case. A police report shows a detective gathered voluminous accounting records and interviewed former Mastino employees. One former employee told police they had tried to report the company to regulators.

“I tried to contact the insurance, department of what’s it called? Regulatory. Yeah, I tried to contact them. I left a message, but I never [heard] back,” police quoted the former employee as saying.

The police report shows an Aurora detective interviewed Mastino owners Kimberly and Rick Bacon after an accountant hired by the HOA claimed more than $700,000 had been misappropriated. The owners, according to police, said deposits of some Traditions funds were “defaulted” into a Mastino account because of bank errors. The report said the Bacons produced documentation showing they had tried to correct the issue with both the bank and their software provider.

Ultimately, police decided to close the case after consulting with prosecutors. Police felt “they would not have been able to prove theft beyond a reasonable doubt after they completed their investigative work,” according to city of Aurora spokesperson Ryan Luby.

In a statement, Steve Fauver, a senior deputy district attorney with the 18th Judicial District, said his office “offered some suggestions regarding additional information that should be provided by the complainant and additional areas of investigation that would be necessary to accurately assess whether a theft may have occurred.”

Fauver added: “It’s important to note that while poor accounting practices or lack of transparency may be perceived as a red flag, it does not necessarily prove that a crime took place.”

Traditions and London House were not the only HOAs dissatisfied with Mastino. Two more disputes between the company and homeowners associations ended up in court last year.

In February 2021, the Villas at Meridian Village HOA sued the company claiming “a former employee of Mastino confidentially notified” their association that the company “had been misappropriating funds” and a forensic review of the HOA’s financials showed a shortfall of more than $80,000. In court filings, Mastino said there was no evidence the company stole any money and suggested the bank or software provider may have been responsible for the issues. Court records show the case was settled this year. In a statement to Rocky Mountain PBS and ProPublica, Mastino said, “The Villas lawsuit was settled via a settlement agreement that has a confidentiality provision in it.” The HOA’s current management company said its board would not be able to comment.

About two months after the Villas at Meridian Village filed its lawsuit, Mastino filed a case against the Fox Run at Centennial HOA. In the lawsuit, Mastino said it ended its contract with Fox Run after a board member lashed out at Kimberly Bacon at a board meeting. Two board members posted online reviews claiming the company failed to pay some of the HOA’s bills and complete repairs in a timely fashion, and Mastino claimed in its lawsuit the reviews were “false and defamatory.”

“Please help us share our negative experience with other potential communities, in order that they may not endure the same experience as our community did,” one of the reviews read.

Court records show the lawsuit was dismissed after a settlement was reached. Fox Run did not respond to requests for comment directed to its current management company.

“The lawsuit was the only way ... [to stop] the board members behavior [and] to force the social media sites to remove the content,” Mastino said in a statement. The reviews, however, are still visible on several sites.

About the patterns noted in the lawsuits and complaints, Mastino said it has been working with more than 20 “accounts” for three years or longer, indicating their bills are getting paid to their satisfaction.

“Numerous HOAs say [Mastino] doesn’t pay on time, but Mastino is not in full control of the payments,” the company said. “The Board authorizes the payments, and they are often the party that halts the efforts to pay.”

Mastino also said it changed its accounting practices in May 2021 and “no longer relies on in-house employees to perform accounting functions.” Instead, the company said, a third party does most of the accounting “to reduce the potential employee errors and add an extra layer of checks and balances.”

That change did not prevent the “spoofing incident” that left London House in a $30,000 hole.

In a statement, Mastino said the incident happened when someone faked an email and then accessed Mastino’s accounting software to release the payment “without going through a higher approval.”

For its part, the London House HOA’s board is reluctant to sue to recover the community’s funds, St. James said, knowing how expensive the endeavor could be. “It just doesn’t seem like there’s any recourse here,” he said.

Mastino, too, lamented the current lack of a regulatory system to mediate HOA disputes without litigation. The company said it held a license “without incident” during the period community association managers were licensed by the state.

“DORA provided a vested 3rd party to resolve disputes. Because they were familiar with complaints and different types of resolution, it presented a much better method for resolving these issues,” the company said.

In the current landscape, St. James said, he’s learned it’s important for homeowners and the boards they run to take more control.

“I think that HOAs for the longest time have handed over their bank accounts, have handed over their business,” he said. “That is a massive problem when it gets complicated.”

There was a similar sentiment at the most recent community meeting for the Traditions HOA.

Residents asked how they could feel confident about their current management company. Board members responded that when they changed management, they ensured that they could monitor the association’s bank accounts in real-time.

“Volunteers are going to have to do more work to serve on an HOA board. You’re going to have to be more involved,” St. James said. “Don’t believe your property management blindly.”

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HOAs can help keep common areas clean and pay for upkeep, but residents who fall behind on dues or run afoul of the rules can find themselves at risk of losing their home.


Mariam Elba contributed research.