A Bill for an Act
Page 1, Line 101Concerning the protection of unit owners in relation to
Page 1, Line 102enforcement actions by unit owners' associations.
Bill Summary
(Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.)
Prior to taking enforcement actions to recover money owed to a unit owners' association (HOA) and related collection costs, the bill requires the HOA to be in compliance with HOA law and the HOA's declaration, bylaws, articles, and rules and regulations.
An HOA's written policy concerning the collection of unpaid assessments must require the notice of deficiency sent to a unit owner to include:
- An advisement that the unit owner may request a copy of the HOA's ledger verifying the amount owed, which copy of the ledger shall be sent to the unit owner no later than 7 business days after the request; and
- An advisement that free information relating to the HOA's collection of assessments and its ability to foreclose and force the sale of a unit is available online through the HOA information and resource center.
- The number of unit owners that were, at any time during the preceding 12-month period, 3 or more or 6 or more calendar months delinquent in the payment of an annual assessment or special assessment;
- The number of judgments obtained against unit owners;
- The number of payment plans entered into with unit owners; and
- The number of foreclosure actions filed by the HOA.
The bill requires the division of real estate in the department of regulatory agencies (division) to present data to certain committees of the general assembly concerning the number of requests the HOA information and resource center receives annually concerning credit counseling, the collection of assessments, or foreclosure actions.
Before initiating a legal action to foreclose an HOA lien, the HOA must send written and electronic notices to the unit owner stating that the unit owner has the right to participate in credit counseling at the unit owner's expense in order to understand the consequences of foreclosure and that information about credit counseling may be found on the HOA information and resource center's website.
As part of an HOA's annual registration with the director of the division, the HOA shall submit information concerning:
If an HOA forecloses an HOA priority lien against a unit owner's home (unit) in an HOA-governed community, and the unit is sold at a sheriff's auction, the bill requires the HOA to make a minimum bid for the unit that is not less than 80% of the fair market value of the unit, as determined by an independent appraisal or other methods described in the bill. The bill amends the foreclosure sale statute to conform to the minimum bid requirement required in the bill.
This Unofficial Version Includes Committee
Amendments Not Yet Adopted on Second Reading
Page 2, Line 1Be it enacted by the General Assembly of the State of Colorado:
Page 2, Line 2SECTION 1. In Colorado Revised Statutes, 12-10-801, amend
Page 2, Line 3(3)(c) as follows:
Page 2, Line 412-10-801. HOA information and resource center - creation -
Page 3, Line 1duties - rules - subject to review - repeal. (3) (c) (I) The HOA
Page 3, Line 2information officer shall track inquiries and complaints and report
Page 3, Line 3annually to the director regarding the number and types of inquiries and
Page 3, Line 4complaints received.
Page 3, Line 5(II) In addition to the information described in subsection
Page 3, Line 6(3)(c)(I) of this section, the HOA information officer shall report
Page 3, Line 7in the annual HOA report aggregated information provided by
Page 3, Line 8associations pursuant to section 38-33.3-401 (3.2) as part of the
Page 3, Line 9associations' annual registration with the director of the
Page 3, Line 10division.
Page 3, Line 11SECTION 2. In Colorado Revised Statutes, 38-33.3-123, add (3)
Page 3, Line 12as follows:
Page 3, Line 1338-33.3-123. Enforcement - limitation. (3) Notwithstanding
Page 3, Line 14any law to the contrary, as a condition precedent to recovering
Page 3, Line 15money owed to an association, collection costs, or reasonable
Page 3, Line 16attorney fees or costs through the foreclosure of an
Page 3, Line 17association lien, the association shall strictly comply with this
Page 3, Line 18section and any applicable association lien or foreclosure
Page 3, Line 19provisions of this title 38 or other applicable law, the
Page 3, Line 20declaration, bylaws, articles, and rules and regulations.
Page 3, Line 21SECTION 3. In Colorado Revised Statutes, 38-33.3-209.5,
Page 3, Line 22amend (5)(a) introductory portion, (5)(a)(V)(C), and (5)(a)(V)(D); and
Page 3, Line 23add (5)(a)(V)(E) as follows:
Page 3, Line 2438-33.3-209.5. Responsible governance policies - due process
Page 3, Line 25for imposition of fines - procedure for collection of delinquent
Page 3, Line 26accounts - enforcement through small claims court - definitions.
Page 3, Line 27(5) (a) Notwithstanding any provision of the declaration, bylaws, articles,
Page 4, Line 1or rules and regulations to the contrary or the absence of a relevant
Page 4, Line 2provision in the declaration, bylaws, articles, or rules or regulations, the
Page 4, Line 3association or a holder or assignee of the association's debt, whether the
Page 4, Line 4holder or assignee of the association's debt is an entity or a natural person,
Page 4, Line 5
mayPage 4, Line 6unpaid assessments unless the association or a holder or assignee of the
Page 4, Line 7association's debt has adopted and follows a written policy governing the
Page 4, Line 8collection of unpaid assessments and unless the association complies with
Page 4, Line 9subsection (7) of this section. The policy must, at a minimum, specify:
Page 4, Line 10(V) That, before the entity turns over a delinquent account of a
Page 4, Line 11unit owner to a collection agency or refers it to an attorney for legal
Page 4, Line 12action, the entity must send the unit owner a notice of delinquency, by
Page 4, Line 13certified mail, return receipt requested, specifying:
Page 4, Line 14(C) The name and contact information for the individual the unit
Page 4, Line 15owner may contact to request a copy of the unit owner's ledger in order
Page 4, Line 16to verify the amount of the debt,
andPage 4, Line 17be provided to the unit owner no later than seven business days
Page 4, Line 18after receipt of the unit owner's request;
Page 4, Line 19(D) That action is required to cure the delinquency and that failure
Page 4, Line 20to do so within thirty days may result in the unit owner's delinquent
Page 4, Line 21account being turned over to a collection agency, a lawsuit being filed
Page 4, Line 22against the owner, the filing and foreclosure of a lien against the unit
Page 4, Line 23owner's property, or other remedies available under Colorado law; and
Page 4, Line 24(E) The availability of, and instructions on how to access,
Page 4, Line 25free online information through the HOA information and
Page 4, Line 26resource center created in section 12-10-801 (1) relating to the
Page 4, Line 27collection of assessments by an association, including the
Page 5, Line 1association's ability to foreclose an association lien for unpaid
Page 5, Line 2assessments and force the sale of the unit owner's home, and the
Page 5, Line 3availability of online information from the federal department
Page 5, Line 4of housing and urban development concerning credit counseling
Page 5, Line 5before foreclosure that may be accessed through a link on the
Page 5, Line 6department of local affairs' website.
Page 5, Line 7SECTION 4. In Colorado Revised Statutes, 38-33.3-316, add
Page 5, Line 8(10.3), (11.2), and (14) as follows:
Page 5, Line 938-33.3-316. Lien for assessments - liens for fines, fees,
Page 5, Line 10charges, costs, and attorney fees - limitations - definitions. (10.3) At
Page 5, Line 11least thirty days before initiating a legal action to foreclose
Page 5, Line 12an association lien, the association shall provide written and
Page 5, Line 13electronic notice to the unit owner or the unit owner's designee
Page 5, Line 14that:
Page 5, Line 15(a) The unit owner has the right to participate in credit
Page 5, Line 16counseling at the unit owner's expense and that information
Page 5, Line 17relating to obtaining credit counseling and the consequences of
Page 5, Line 18foreclosure by an association is available through the HOA
Page 5, Line 19information and resource center created in section 12-10-801 (1)
Page 5, Line 20or through a link to the federal department of housing and
Page 5, Line 21urban development on the department of local affairs' website;
Page 5, Line 22and
Page 5, Line 23(b) Credit counseling may include:
Page 5, Line 24(I) Discussion of amounts owed to the association in
Page 5, Line 25unpaid assessments and related costs;
Page 5, Line 26(II) The impact of foreclosure on the unit owner's credit;
Page 5, Line 27(III) Additional debt that may be incurred by the unit
Page 6, Line 1owner if foreclosure by the association is completed;
Page 6, Line 2(IV) Options available to the unit owner to retain title to
Page 6, Line 3the unit or to remain in the unit; and
Page 6, Line 4(V) Any other options that may be available to the unit
Page 6, Line 5owner to avoid foreclosure.
Page 6, Line 6(11.2) No later than five business days after an
Page 6, Line 7association initiates legal action to foreclose a lien described
Page 6, Line 8in this section, the association shall provide written and
Page 6, Line 9electronic notice to all lienholders identified in the unit owner
Page 6, Line 10property records of:
Page 6, Line 11(a) The right to cure the nonpayment pursuant to section
Page 6, Line 1238-38-104; and
Page 6, Line 13(b) The right of the unit owner to file a motion to stay the
Page 6, Line 14sale of the property at auction pursuant to section 38-38-109.5.
Page 6, Line 16(14) As used in this section, unless the context otherwise
Page 6, Line 17requires, "assessment" means a payment for common expense
Page 6, Line 18obligations of unit owners based on a periodic budget adopted by
Page 6, Line 19the association under section 38-33.3-315 (1), or a payment for
Page 6, Line 20limited common elements of unit owners, and includes fees
Page 6, Line 21specific to delinquent payments and reasonable collection costs
Page 6, Line 22for collecting delinquent payments.
Page 6, Line 23SECTION 5. In Colorado Revised Statutes, 38-33.3-401, add
Page 6, Line 24(3.2) as follows:
Page 6, Line 2538-33.3-401. Registration - annual fees - data collection of
Page 6, Line 26enforcement actions. (3.2) As part of an association's annual
Page 6, Line 27registration, the association shall submit the following
Page 7, Line 1information to the director of the division of real estate, in the
Page 7, Line 2form and manner determined by the director of the division of
Page 7, Line 3real estate:
Page 7, Line 4(a) For the twelve-month period immediately preceding
Page 7, Line 5the association's annual registration, the number of unit owners
Page 7, Line 6that were, at any time during the twelve-month period, six or
Page 7, Line 7more calendar months delinquent in the payment of an annual
Page 7, Line 8assessment or special assessment;
Page 7, Line 9(b) For the twelve-month period immediately preceding
Page 7, Line 10the association's annual registration, for unpaid annual
Page 7, Line 11assessments or special assessments or related fees or attorney
Page 7, Line 12fees:
Page 7, Line 13(I) The number of unit owners against which the
Page 7, Line 14association or its designee obtained a judgment;
Page 7, Line 15(II) The number of payment plans entered into between the
Page 7, Line 16association and a unit owner pursuant to section 38-33.3-316.3;
Page 7, Line 17and
Page 7, Line 18(III) The number of foreclosure actions filed against unit
Page 7, Line 19owners pursuant to section 38-33.3-316; and
Page 7, Line 20(c) Any other information specified by the director of the
Page 7, Line 21division of real estate relating to the collection of assessments
Page 7, Line 22and the foreclosure of the association's liens.
Page 7, Line 24SECTION 6. In Colorado Revised Statutes, add 38-38-109.5 as
Page 7, Line 25follows:
Page 7, Line 2638-38-109.5 Continuance of sale - unit association lien - unit
Page 7, Line 27owner's motion to stay - escrow of proceeds - purchaser title.
Page 8, Line 1(1) Notwithstanding any provision of this title 38 to the
Page 8, Line 2contrary, at any time after a unit owners' association files an
Page 8, Line 3action for foreclosure of the unit association lien on a unit, but
Page 8, Line 4prior to the sale date at auction, the unit owner or the unit
Page 8, Line 5owner's designated representative may file a motion with the
Page 8, Line 6court to stay the sale of the unit with notice of the unit owner's
Page 8, Line 7intent to list the unit for sale for the fair market value of the
Page 8, Line 8unit or an alternate amount as specified in subsection (2) of this
Page 8, Line 9section. The unit owner or the unit owner's designated
Page 8, Line 10representative shall provide notice of the motion to stay the
Page 8, Line 11sale to the association and to the officer.
Page 8, Line 12(2) (a) The unit owner shall state in the motion to stay:
Page 8, Line 13(I) The fair market value of the unit, as determined by:
Page 8, Line 14(A) An appraisal of the unit;
Page 8, Line 15(B) A market analysis conducted by a licensed real estate
Page 8, Line 16agent; or
Page 8, Line 17(C) The assessed value of the unit recorded in the county
Page 8, Line 18assessor's property tax records on the date of the court's order
Page 8, Line 19to sell the unit; or
Page 8, Line 20(II) An alternate value for the unit that, if less than the
Page 8, Line 21fair market value of the unit, exceeds the sum of all liens and
Page 8, Line 22any fees or costs advanced by the holder of the evidence of
Page 8, Line 23debt.
Page 8, Line 24(b) The court may allow the unit owner additional time to
Page 8, Line 25submit the fair market value or alternate value to the court.
Page 8, Line 26(c) The unit owner shall list the unit at the sale price
Page 8, Line 27specified in the motion to stay, unless the association objects to
Page 9, Line 1the unit owner's declared fair market value or alternate value
Page 9, Line 2of the unit. The association may submit evidence of the unit's
Page 9, Line 3value to the court. Based on the evidence, the court shall set
Page 9, Line 4the initial list price of the unit and may further order a change
Page 9, Line 5to the list price if supported by sufficient evidence.
Page 9, Line 6(3) The court may extend the stay of the sale of the unit
Page 9, Line 7at auction beyond nine months upon evidence that the sale of
Page 9, Line 8the unit is imminent or for good cause, as determined by the
Page 9, Line 9court.
Page 9, Line 10(4) If a sale date was scheduled, the officer shall post or
Page 9, Line 11provide notice of the continuance of the sale while the stay is in
Page 9, Line 12effect.
Page 9, Line 13(5) The court shall enter any orders necessary to ensure
Page 9, Line 14that the proceeds of the sale of the unit are held in escrow and
Page 9, Line 15distributed by the court in accordance with lien priority and
Page 9, Line 16other applicable law.
Page 9, Line 17(6) A purchaser of a unit listed for sale pursuant to this
Page 9, Line 18section shall take title to the unit free and clear of any
Page 9, Line 19encumbrances relating to filing of the foreclosure action.
Page 9, Line 20SECTION 7. Act subject to petition - effective date -
Page 9, Line 21applicability. (1) This act takes effect October 1, 2025; except that, if a
Page 9, Line 22referendum petition is filed pursuant to section 1 (3) of article V of the
Page 9, Line 23state constitution against this act or an item, section, or part of this act
Page 9, Line 24within the ninety-day period after final adjournment of the general
Page 9, Line 25assembly, then the act, item, section, or part will not take effect unless
Page 9, Line 26approved by the people at the general election to be held in November
Page 9, Line 272026 and, in such case, will take effect on the date of the official
Page 10, Line 1declaration of the vote thereon by the governor.
Page 10, Line 2(2) This act applies to enforcement actions instituted on or after
Page 10, Line 3the applicable effective date of this act.