According to law enforcement officials, identity thieves have been using the Colorado Secretary of State’s (the “Secretary”) website to engage in business identity theft.  By accessing the Secretary’s website, identity thieves are able to obtain public information about Colorado registered entities, and then for a nominal fee are able to change the registered agent of a registered entity to themselves.  Once the identity thieves have implemented the change, they will use the registered entity’s name to apply for fraudulent lines of business credit for their own personal use.  By some accounts, this scheme has affected at least twenty-five Colorado registered entities and allowed identity thieves to steal over $750,000.

Identity thieves are able to engage in this crime due to the lack of procedural safeguards to check the authenticity of forms implementing changes to the records of registered entities as they come into the Office of the Secretary.  Oftentimes, a registered entity will not even know that a change has been made to its entity records upon the submission of a form to the Office of the Secretary. 

An entity registered in Colorado can combat these identity attacks by listing an email address for the registered entity with the Office of the Secretary.  Thereafter, an email notification will be sent to the listed email address upon any change to the records of the registered entity, thereby alerting it of any unwarranted changes.  However, the option to list an email address for a registered entity is only a recent development and remains completely voluntary.  As a result, a majority of Colorado’s registered entities do not have an email address listed and may not be notified of identity theft attacks. 

Therefore, an entity registered in Colorado should consider subscribing for email notifications from the Office of the Secretary to try to protect the entity against identity theft.   A registered entity can subscribe to email notifications by visiting the Secretary’s website.  Additional information and resources about identity theft and protecting registered entities against identity theft attacks can also be found here.

 

 

 

As discussed here by The Wall Street Journal, the vast majority of Generation Y, a larger demographic than baby boomers, wants an urban lifestyle.  Of those born between 1980 and the early 2000’s, 88% want to live in an urban setting rather than in traditional, suburban communities.  They want a pedestrian-friendly environment.  They also prefer smaller dwelling units with shared amenities to the suburban home with a large yard.

Of course, as this DenverUrbanism.com blog post suggests, as time goes on and Millennials start having their own children, their desires may change.

It will be interesting to see how this generation’s preferences impact urban and suburban residential markets.

A few months ago, I wrote about a recent Colorado Court of Appeals decision that gave a broad interpretation to the Colorado Trust Fund Statute.  That decision highlighted the importance of maintaining strict accounting practices and segregating funds for each separate construction project.  As a follow up to that post, I would like to highlight a particular accounting practice that has the potential to create liability under the Trust Fund Statue while also invalidating mechanics’ liens filed by subcontractors.

construction tunnel.jpgGeneral contractors often use the same supplier or subcontractor on multiple projects.  Sometimes a newer project will pay out much quicker than an older project, whether because of construction issues that need to be resolved or delays in payment from the property owner.  In these situations some contractors decide to enter into arrangements with their subcontractors whereby invoices get paid based on aging rather than on a project by project basis.  This might be because neither the contractors nor the subs like to show past due accounts payable/receivable on their financial statements, or maybe the subcontracts provide for steep interest payments on past due invoices.

Whatever the motivation, the contractor and the sub often view this practice as harmless.  However, upon closer scrutiny, these types of arrangements can become disastrous for both contractors and subcontractors.  For example, if an older project never pays out as expected and the contractor is left with a shortage of funds, then that contractor will likely face liability under the Trust Fund Statute (to a property owner and/or other subcontractors) for diverting funds from one project to pay for the expenses of another. 

Meanwhile, the subcontractor whose invoices were paid based on aging, rather than on a project by project basis, is likely to have some unpaid invoices.  In such a case a subcontractor would usually protect itself by filing a mechanics’ lien against the property for which it did work and did not get paid.  However, this subcontractor will have a difficult time enforcing a mechanics’ lien for the newer “unpaid” invoices because it in fact already got paid with funds from that very project – those funds were simply misapplied to an older invoice for a different project.

While it can be tempting to maintain informal accounting practices with long standing and trusted subcontractors or suppliers, both sides need to ensure that they properly account for all funds so as not to run afoul of the Colorado Trust Fund and Mechanics’ Lien statutes.

Photo by laffy4k (Flickr)

The Supreme Court on Monday refused to consider a constitutional challenge to the Religious Land Use and Institutionalized Persons Act (RLUIPA), leaving intact a federal jury’s verdicts that Boulder County, Colorado had violated three separate provisions of the statute in its processing and denial of a 2004 special use application filed by Rocky Mountain Christian Church of Niwot, Colorado.

Following a trial in November of 2008, the jury found that the county treated the church unfairly in the land use process compared to a similarly situated secular school, imposed a substantial burden on the church’s exercise of religion, and unreasonably limited the ability of churches to locate within the county.  Based upon the verdicts, the district court then entered an injunction directing the county to approve the church’s 2004 application to expand its Niwot facility which is used both as a church and a school.

The Tenth Circuit upheld the jury verdicts and injunction in July of 2010.  The Supreme Court denied the county’s petition for certiorari, meaning it will not review the Tenth Circuit’s decision.  In two separate decisions, the church has also been awarded approximately $1,450,000 for attorneys’ fees incurred by its trial counsel, Otten, Johnson, Robinson, Neff & Ragonetti, P.C. of Denver, and The Becket Fund for Religious Liberty, a Washington D.C. based law firm, as well as its lead appellate counsel, Williams & Connolly LLP of Washington, D.C.

Alan Ahlgrim, Lead Pastor of the church, said “We’re grateful that the legal process is now done and we have been vindicated by yet a third court.”  He noted that during the application process the church had spent countless hours and great sums of money trying to comply with the county’s requirements and to address concerns of the church’s neighbors.  “The expanded facility will be a benefit both for the congregation and the entire Niwot community,” he said.

Kevin Baine of Williams & Connolly said he was not surprised by the Supreme Court’s decision not to review the case because “both lower courts had upheld the jury’s finding that the church had been treated less favorably than a secular school in the same position.”  According to Tom Macdonald of the Otten Johnson firm, the jury heard extensive evidence comparing the county’s treatment of the applications filed by the church and the Alexander Dawson School, which was also located on land with the same zoning and comprehensive plan designations as the church’s property and which received approval of an expansion similar in size to total project size sought by the church and that included a gymnasium of roughly the same size as the church requested.

Macdonald said the unreasonable limitation verdict was based upon evidence that the county made it more difficult for churches to operate in the county, had effectively left few sites for church construction and had told a synagogue it could have only 100 seats because the county did not want any more mega churches.  The substantial burden claim was based upon evidence that space constraints had inhibited the church’s growth and outreach to new members in a number of ways, he said.

RLUIPA was passed unanimously by both houses of Congress and signed into law by President Clinton in 2000.  “This case demonstrates the ongoing need for civil rights laws like RLUIPA that protect people of all faiths,” according to Eric Rassbach of the Becket Fund.  “It is also a testimony to the American commitment to religious freedom for all,” he said.

For additional information contact Tom Macdonald (303-575-7520; mac@ottenjohnson.com); Kevin Baine, (202-434-5010; kbaine@wc.com); or Eric Rassbach (202-349-7214; erassbach@becketfund.org).

We have been following the newly adopted requirement that Colorado property owners’ associations register with the Colorado Division of Real Estate (the “Division”) no later than January 1, 2011, or face losing their assessment lien power and enforcement rights.  See our earlier reports (Aug. 2010 and Dec. 2010) for background information on this new requirement.

For the past few months there has been uncertainty surrounding this requirement.  Recently, steps have been taken to implement it.  Aaron Acker has been hired as the HOA Information Officer and the Division has promulgated an emergency rule granting an automatic, temporary registration for Colorado property owners’ associations.  This temporary registration expires on March 1, 2011.   In addition, online registration is now available on the Division’s website.  The registration fee is currently set at $8.93. 

What is still uncertain is which Colorado property owners’ associations are subject to this new registration requirement—just those formed under the Colorado Common Interest Ownership Act (“CCIOA”) (adopted in 1992) or all property owners’ association, even those formed earlier than 1992 or otherwise exempt from CCIOA.  We understand from Mr. Acker that this and other issues are still being reviewed and we will continue to follow this matter and report back any new developments.