Colorado Metropolitan Districts

Colorado Home Builders will NOT like this post at all. You know what?  I quite frankly don't give a damn. If you were honest, had any sense of intregrity and were up front and forthcoming about your subdivisions being in a Metropolitan District, posts like this...would never be necessary. 

But you're not, because you put sneaky language into contracts and you never verbally say a word to your buyers...and you know FULL WELL what you're doing and why you do it, because if you were honest, you'd never be able to sell your homes, so you have to use fraud and deception, smoke and mirrors and hide behind awkward language. You have to deceive people in order to do business. It's shady, it's crooked and it is FLAT OUT WRONG to take advantage of people.

For those of you homeowners, first time homebuyers and first time home builders who know are NOT aware of what a Metropolitan District is, I'm about to tell you first hand what it is, what it does, and why most home buyers who build new houses don't have a clue what they are...until it's way too late.

For my PHYSICAL SAFETY, I will not divulge any personal details, name specific builders, specific city whereabouts or speak to any specific subdivisons. I've already been threatened with violence (that's how bad they want to keep the average new home buyer from knowing about this.) and I fully INTEND to spread this everywhere I can so not another home buyer gets screwed over. 

So let's get started shall we? 

First off, what is a Metropolitan District? 

https://www.hbacolorado.com/advocacy/colorado-metro-districts

Metropolitan districts are a type of Colorado special (taxing) district that provides at least two types of services—fire, mosquito, parks and recreation, safety protection, sanitation, solid waste disposal, street improvement, television relay, transportation, water—and are created in accordance with the Special District Act (Title 32, Article 1, C.R.S.).

Metro districts are independent governmental entities formed to finance, design, acquire, install, construct, operate and/or maintain public improvements that are not otherwise being provided.

Existing regulations for metro districts include many protections for homebuyers and consumers:

• Multiple disclosures provided at each step of the homebuying process

• Mill-levy caps

• Maximum terms for debt service mill levy

• Putting development risk on bond holders instead of homeowners as a result of the mill-levy cap and limited term for debt service mill levy

• Reducing costs for homebuyers since other methods of financing the same infrastructure are more expensive, particularly in large master-planned communities

• Allowing for development to pay its way as the cost of new infrastructure is funded by the property owners who benefit rather than the public at large.

Metro district financing for public improvements is the best available option to support public improvements in the new housing community developments needed to meet the affordable housing challenge in Colorado.

• If these public infrastructure costs were included in the price of each home, many residents would be priced out of the market.

• Instead, metro districts spread these costs out over time, and the residents of the metro district repay them through long-term property tax payments.

 Metro district financing involves bond underwriting, a process that encourages an independent market-based review of the financial viability of the housing project and associated public improvements.

• Metro district financing is a tool used to ensure that the cost of growth and development is paid by the new users – homebuyers within the new community. 

Growth in metro districts mirrors Colorado’s rapid population growth and increased home building within the past decade.

• According to the Special District Association and Division of Local Government, there are 1,819 metro districts in Colorado. 

(THIS NUMBER ONLY GET HIGHER!)

Disclosure and Accountability

Although the home buying experience can be an overwhelming experience for many people, there are several ways that information about metro districts is provided as part of purchasing a home: 

• Taxing information for metro districts is included in the tax certificate available at the time of purchase. 

• In some jurisdictions, metro districts record a document with a good faith estimate of future taxes anticipated as part of their organization process. 

• The title policy for each home includes all recorded documents related to any special district the home is within, which typically includes the service plan, order and decree and the public disclosure statement described below. 

• A public disclosure statement and map of all special districts is required to be recorded by Section 32-1-104.8, C.R.S. in the real property records and includes the name of the district, the powers of the district, a statement about the district having several methods to raise revenues including issuing debt, levying taxes, and imposing fees and charges. 

• The Purchase and Sale Agreement has a disclosure required by Section 38-35.7-101, C.R.S., printed in bold all-cap type, informing the purchaser that the property may be in a special district and subject to property tax, and encouraging buyers to get more information about special taxing districts.

In addition to the information that is provided as part of the homebuying process, information about special districts is readily available online from the Division of Local Government and the Special District Association and the following reoccurring disclosures are made by districts: 

• The public disclosure statement discussed above is updated any time new property is included in a special district.

• Annual transparency notices are provided by metro districts as provided in Section 32-1-809, C.R.S. and include contact information for the districts, the names and contact information for the manager and board members, time and places of regular meetings, current mill levy, the date of the next regular special district election, information about how to run for election, and address of a website (if any).

• Revised district boundary maps are maintained with the Division of Local Government, County Assessor, and County Clerk and Recorder as required by Section 32-1-306, C.R.S.

• Many municipalities and counties also require that districts file an annual report as set forth in Section 32-1-207(3)(c)-(d), C.R.S. which includes information about the district including information on the progress of the special district in the implementation of the service plan. 

Districts are also subject to myriad statutory and regulatory requirements, including:

• The Colorado Open Records Act, which provides members of the public the right to inspect all public records at reasonable times.
  

• The Colorado Open Meeting Law or Sunshine Act, which declares it to be “a matter of statewide concern and the policy of this state that the formation of public policy is public business and may not be conducted in secret.”
  

• TABOR (discussed above)
  

• The Gallagher Amendment (discussed above)
  

• The Colorado Local Government Election Code 
  

• District elections are generally held every two-years in May (elections are currently being transitions from even-numbered to odd-numbered years so election will be held in May 2020, May 2022, and May 2023 to complete the transition) and are generally for staggered four-year terms (3-year terms are being used in 2020 and 2022).

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The information above is provided DIRECTLY from the link inserted just below the "What is A Metropolitan District" Heading.  

According to the Home Builder's Association of Colorado website site, there's supposed to be MULTIPLE disclosures to the homebuyer. However, in my case there wasn't.  It's really hard to my explain my situation without divulging my identity or the subdivision in question. Basically the only thing ever "disclosed" to me was in my contract in 2 different sections. The verbiage is TERRIBLE. It's broad and it is misleading and it is confusing and this is INTENTIONALLY done to confuse the homeowner.

The Purchase and Sale Agreement is also known as your Contract or Fully Executed Contract. 

• The Purchase and Sale Agreement has a disclosure required by Section 38-35.7-101, C.R.S., printed in bold all-cap type, informing the purchaser that the property may be in a special district and subject to property tax, and encouraging buyers to get more information about special taxing districts.

 This is one section in a contract (Purchase and Sale Agreement) regarding a Metropolitan District

"Special Taxing Districts. SPECIAL TAXING DISTRICTS MAY BE SUBJECT TO GENERAL OBLIGATION INDEBTEDNESS THAT IS PAID BY REVENUES PRODUCED FROM ANNUAL TAX LEVIES ON THE TAXABLE PROPERTY WITHIN SUCH DISTRICTS. PROPERTY OWNERS IN SUCH DISTRICTS MAY BE PLACED AT RISK FOR INCREASED MILL LEVIES AND TAX TO SUPPORT THE SERVICING OF SUCH DEBT WHERE CIRCUMSTANCES ARISE RESULTING IN THE INABILITY OF SUCH A DISTRICT TO DISCHARGE SUCH INDEBTEDNESS WITHOUT SUCH AN INCREASE IN MILL LEVIES. BUYERS SHOULD INVESTIGATE THE SPECIAL TAXING DISTRICTS IN WHICH THE PROPERTY IS LOCATED BY CONTACTING THE COUNTY TREASURER, BY REVIEWING THE CERTIFICATE OF TAXES DUE FOR THE PROPERTY, AND BY OBTAINING FURTHER INFORMATION FROM THE BOARD OF COUNTY COMMISSIONERS, THE COUNTY CLERK AND RECORDER, OR THE COUNTY ASSESSOR. 

Buyer has the Right to Terminate under § 25.1, on or before Off-Record Title Objection Deadline, based on any unsatisfactory effect of the Property being located within a special taxing district, in Buyer’s sole subjective discretion."

The first problem I have with this language here is that is:

• Confusing
• Misleading
• Intentionally Mistitled

All intentionally and all by design. Why?  So you will overlook it and think it doesn't apply to you. So you won't research it. So you won't look it up, investigate it, call anyone or  or ask questions. In that entire section, there's no mention of "Metropolitan District" anywhere. Instead they intentionally call it a "Special Taxing District".  Just know, they are the SAME THING just re-worded for manipulation, fraud and deception.

The second problem I have with the language here is that is says 

"MAY BE SUBJECT TO" not "SHALL BE SUBJECT TO" or "WILL BE SUBJECT TO". By saying "MAY BE SUBJECT TO", the contract is saying I might be, maybe, possibly. You're not definitively telling me something is 100% going to happen. To me this is a FRAUDULENT MISREPRESENTATION and it is done by the means of DECEPTION. 

If one were to get a highly educated attorney, I'm sure one could push the issue in both criminal and civil courts for recourse. However, doing so will be very expensive. 

 Criminally, you could go after a salesman for Deceptive sales and business practices. 

https://www.shouselaw.com/co/defense/laws/deceptive-sales/

• "Deceptive sales and business practices can be charged under Colorado’s theft statute. Under C.R.S. 18-4-401, theft can be charged as a misdemeanor or felony, depending on the value of theft involved. Theft or fraud involving less than $2,000 is a misdemeanor. Theft or fraud of $2,000 or more is a felony."

Civil liability for deceptive business practices

• In addition to criminal charges, deceptive business practices can expose an individual to civil liability. The use of deceptive advertising or other deceptive trade practices may be a violation of the Colorado Consumer Protection Act. CCPA violations provide for civil penalties.

• “The attorney general or district attorney may bring a civil action on behalf of the state to seek the imposition of civil penalties.”

• Victims of consumer fraud may also be able to file a civil action to seek actual damages, triple the amount of damages if the deception was intentional, as well as the cost of reasonable attorney’s fees."

If the salesman or the builder had ANY INTEGRITY and HONESTY whatsoever, they would clearly and definitiely title it "Metropolitan Tax District".  They would verbally tell you AND your real estate broker about it BEFORE you even sign a contract, they would give you a brochure with links where you can find the information and then they have you sign an Acknowledgement Form of sorts and they would have it notarized that way they could cover their asses, but they don't, because they have ZERO INTENTION of verballing telling you anything. They hope you miss it in the contract, they hope you don't read that section, research it, ask questions, call anyone or otherwise do your due diligence and that you'll just sign on the dotted line. Then they hold their breath until they get you to the closing table. Here, they withhold all these documents regarding the Metropolitan District. You don't sign so much as another document in ALL of your closing papers regarding through the entire process.  B-b-but the website link to the Home Builder's Association of Colorado says there's multiple disclosures. Not on a new home build there's not. 

There is no Special Assement in your Tax Certificate. Well, the words Special Assesment are on there, right next to $0.00. Why? Because the Metropolitan District tax doesn't go into effect until the next year following your closing. As a new and first time home buyer/builder, you don't know any better, so you see Special Assesment and $0.00 and your eyes glance over it and you don't give it another thought, not knowing what lies ahead the upcoming February when you get your tax statement in the mail. 

When you get your signed copy of your closing papers from the Mortgage Company, only then do you begin to see documents pertaining to a Metropolitan District. You'll see a Plat Map outlining all the houses in the Metro District, the Court Filing approving the Metropolitan District and the Metro District Paperwork itself. You'll glance over them but because you have NO IDEA what it is, you ignore it and scan the rest of the paperwork.  A little gear in the back of your head begins to spin. Something isn't right but you can't put your finger on it, so you file it away and try not to worry about it.

Then February shows up, you get your annual tax assessment from the county assessor's office. That little gear begins working again as you furiously read your statement. $2,400 for county taxes and another $1,278 for the metropolitan district tax. What the hell is a metropolitan district tax? you ask yourself. You type in metropolitan district into google. You pull out the file folder and thumb through your closing papers. Finally, you find your paperwork and it all becomes clear. You got suckered into buying a house in a metropolitan district and you didn't even know it until it was too late. 

So know what? You're angry, frustrated, confused, hurt, you feel betrayed, you feel lied to and taken advantage of. You call the salesman and she or he refers you to the County Assessor's office. You frantically call your agent and they either tell you they didn't know either or they tell you didn't read your contract. Angry, you pull out your contract and sure enough, there it is in bold capital letters. 

You really only have 3 choices at this point. 

1.) You can swallow the pill you've been FORCE FED (against your will nonethless) accept it, pay it and move on with life.You'll likely be bitter and angry about it as long as you live in the house.

2.) You can hire an attorney and sue for fraud by deception and attempt to pursue criminal charges. However, just know these Metropolitan Districts are backed up by Insurance Companies with powerful attorneys and very deep pockets. They will come at you with everything they have. You can alert the media and maybe someone will feel sorry for you and put the builder and salesman in the spotlight. But they'll hide behind their "broad language and poorly worded" bold, capitalized section in their contract.

3.) Sell the damn house and get the hell out of there. You learned a lesson, you won't repeat that mistake again. Write your Representatives and demand more disclosures up front, Acknowledgements, and verbal disclosure prior to signing any contracts. Maybe some state legislators will go to bat for you to change the laws, but with useless do nothing Democrats in office that's highly doubtful. You can blog about it and share this blog with all your friends, their friends and anyone you ever hear wants to build or buy a brand new house. 

or 

Hopefully, you've read this article before you made any sort of committment, signed a contract or put any earnest money down and you can avoid this NIGHTMARE. If you have recently read this and already put down earnest money or signed a contract and you're realize you're in a Metropolitan District...contact a real estate attorney AS SOON AS POSSIBLE and get out of it if at all possible. 

That's it. The moral of the story here is: 

DON'T BUY HOUSES IN METROPOLITAN DISTRICTS, EVEN IF YOU CAN AFFORD IT. 

Why would you ever VOLUNTARILY SIGN UP TO GIVE YOUR HARD-EARNED MONEY AWAY BY PAYING EXTRA TAXES? No one I know would do this. That's why they use fraud and deception, terms like "MAY BE" and "special taxing districts" to get you to sign. Always, always, always have a well qualified Colorado Real Estate Attorney look over your contract before you sign anything. I don't even care if it's just earnest money. The attorney will PROTECT you from bullshit like this happening to you. 

If you're contemplating building or a buying a new home and you're not sure if there is a Metropolitan District you can do the following. 

1.) Use these map's

https://data.colorado.gov/Local-Aggregation/Metro-Districts-in-Colorado/knbf-ggf2

https://demography.dola.colorado.gov/CO_SpecialDistrict/

2.) Contact your County Treasurer's Office.

3.) Contact your County Board of Commissioner's

4.) Contact the County Assessor's Office

5.) Have a Real Estate Attorney Investigate 

6.) Get it in WRITING that you are not. Have it notarized. If any of the above, the salesman or builder aren't willing to sign an Acknowledgement stating you're NOT IN A METRO DISTRICT, walk away and buy or build somewhere else. 

IF THERE IS ANY DOUBT WHATSOEVER, DO NOT SIGN THAT CONTRACT AND DO NOT PUT ANY EARNEST MONEY DOWN.

If people would stop being desperate to buy a home and start making informed, rational decisions and no longer purchase homes in a metropolitan district, then builder's will eventually stop trying to manipulate buyers into these metropolitan districts and future use of the metropolitan district will disappear altogether. 

Fuck Metropolitan Districts and fuck the useless cockroach builders that trap people into them. They're no different than a credit card company that gives someone a high interest credit card with a high spending limit. They're predatory, greedy crooks, plain and simple.

You will have to do your home work, you will need a good real estate broker who knows the ropes and a quality real estate attorney and a lot of patience, but you can find a piece of land, build a nice home on it and avoid a Homeowner's Association and a Metropolitan District. The only rules you will be subject to are city code and county code. Those are the ONLY rules a homeowner should ever be subject to. A metropolitan district and HOA's are just more oversight, more control over what you can or can't do with your home and property and both entities cost you more money. Stop subsidizing them and they will disappear.

Here is a listing of every Metropolitan District in Colorado

https://www.sdaco.org/cora/sda-transparency/search/

(NOTE: Some new build developments MAY NOT have the Metro District Paperwork approved by the Court at the time you go under contract. As such if you were to call the County Assessor's Office, County Treasurer or the County Board of Commissioner's they may not have up to date information and you could be wrongly informed that you are not in a Metropolitan District, even though you are! Have your Real Estate Attorney research it! 

Also: Not all Metropolitan Districts are named after the subdivision(s) they are located in. Be wary of this! Some Metro Districts might only be exclusive to one subdivision, while other's can encompass several subdivisions in an area! Use the maps and the database. Call the County, have your Real Estate Attorney investigate for you!)

 Stay tuned for my next article. I'm going to verbally obliterate Homeowner's Associations and their useless existence next.