Our History

Senate Bill 04-221

On May 21, 2004, Colorado Senate Bill 04-221 was signed into law allowing metropolitan districts to furnish covenant enforcement services to covenant-controlled neighborhoods.  This bill was important because it allowed single-family home covenant-controlled neighborhoods to take advantage of significant cost savings by transferring the operations of their communities from nonprofit homeowner associations (HOAs) to metropolitan districts.

Interestingly, since 2004, very few neighborhoods have taken advantage of this change in Colorado law.  Why?  Cost is one factor.  Most law firms and consultants are not interested in servicing established neighborhoods (much better money can be made serving new development projects) unless homeowners are willing to pay steep fees.  Another factor is that most homeowners are still unfamiliar with metropolitan districts and are unaware of the financial benefits metropolitan districts can provide to their neighborhoods.  However, success stories do exist in neighborhoods across Colorado where homeowners have reorganized their operations from an HOA model to a metropolitan district model.

2008 real estate crash and economic recession

The 2008 economic recession exposed the weaknesses of HOAs throughout Colorado.  The mix of deteriorating home values, widespread use of unconventional mortgage financing, rising unemployment and stagnation of salaries and wages devastated the finances of tens of thousands of homeowners throughout Colorado and caused the foreclosure rate in Colorado to rise as high as 2.4% (See Note A below).  Consequently, HOAs experienced declining collection rates and rising collection costs.  HOAs across the greater metro Denver area were experiencing collection costs net of recoveries as high as $0.26 on every $1 in HOA dues billed to homeowners.

To make matters worse, many Colorado neighborhoods experienced such severe declines in property values that many homeowners lost most if not all (and in many cases incurred negative) equity in their homes.  According to a national housing data survey conducted by CoreLogic in march 2011, approximately one in every five homes in Colorado were “underwater”—i.e. the mortgage debt burden was greater than the value of the home.

Conversely, most metropolitan districts (i.e. those where residents voted to "de-Bruce" their district) charged through the recession experiencing little to no impact on property tax revenues. (Click here to learn more about “de-Bruced” metropolitan districts.) These metropolitan districts were able to maintain a constant level of property tax revenue to fund their operations and, unlike HOAs, did not experience any significant increases in costs to collect such revenues.

Note A: Information source—Denver Business Journal, RealtyTrac: Colorado 10th in 2009 foreclosure rate, January 13, 2010.

Company Formation

The Company was founded in September 2011 with the idea that a "healthy" neighborhood was much easier and more profitable to operate than a "sick" neighborhood.  What are the characteristics of "healthy" neighborhoods?  The primary characteristics of such neighborhoods include:

  • Minimal collection issues and costs
  • Low rate of covenant violations
  • Low home ownership turnover rate
  • Strong, democratic election and taxation process
  • Fully funded long-term capital maintenance account
  • Active neighborhood social events and programs

"Sick" neighborhoods would possess one or more opposite characteristics.

By nature, metropolitan district operated neighborhoods posses most, if not all, of the characteristics of a "healthy" neighborhood.  Conversely, HOA-operated neighborhoods are inherently designed to posses a high risk of becoming and perpetually remaining "sick."

The Company is the first of its kind within the Colorado property management industry to provide HOA-operated neighborhoods with property management services that include managing the process for transitioning neighborhood operations from a "sick" HOA model into a "healthy" metropolitan district model. In addition, the Company’s integrated management service model finally provides HOA-operated neighborhoods with a cost-effective transition solution compared to the tens of thousands of dollas that is often quoted by law firms, consultants and CPA firms to perform similar services.
Today, Wolfersberger, LLC continues to help build healthy neighborhood clients that successfully identify and unlock the “hidden” wealth within their neighborhoods and, thereby, significantly improve the economic and quality-of-life conditions within their communities.