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.
Page 2, Line 1Be it enacted by the General Assembly of the State of Colorado:
Page 2, Line 2SECTION 1. In Colorado Revised Statutes, 38-33.3-123, add (3)
Page 2, Line 3as follows:
Page 2, Line 438-33.3-123. Enforcement - limitation. (3) Notwithstanding
Page 3, Line 1any law to the contrary, as a condition precedent to recovering
Page 3, Line 2money owed to an association, collection costs, or reasonable
Page 3, Line 3attorney fees or costs pursuant to this section, the association
Page 3, Line 4shall strictly comply with this section and any applicable
Page 3, Line 5provisions of this title 38 or other applicable law, the
Page 3, Line 6declaration, bylaws, articles, and rules and regulations.
Page 3, Line 7SECTION 2. In Colorado Revised Statutes, 38-33.3-209.5,
Page 3, Line 8amend (5)(a) introductory portion, (5)(a)(V)(C), and (5)(a)(V)(D); and
Page 3, Line 9add (5)(a)(V)(E) and (5)(a.5) as follows:
Page 3, Line 1038-33.3-209.5. Responsible governance policies - due process
Page 3, Line 11for imposition of fines - procedure for collection of delinquent
Page 3, Line 12accounts - enforcement through small claims court - definitions.
Page 3, Line 13(5) (a) Notwithstanding any provision of the declaration, bylaws, articles,
Page 3, Line 14or rules and regulations to the contrary or the absence of a relevant
Page 3, Line 15provision in the declaration, bylaws, articles, or rules or regulations, the
Page 3, Line 16association or a holder or assignee of the association's debt, whether the
Page 3, Line 17holder or assignee of the association's debt is an entity or a natural person,
Page 3, Line 18
mayPage 3, Line 19unpaid assessments unless the association or a holder or assignee of the
Page 3, Line 20association's debt has adopted and follows a written policy governing the
Page 3, Line 21collection of unpaid assessments and unless the association complies with
Page 3, Line 22subsection (7) of this section. The policy must, at a minimum, specify:
Page 3, Line 23(V) That, before the entity turns over a delinquent account of a
Page 3, Line 24unit owner to a collection agency or refers it to an attorney for legal
Page 3, Line 25action, the entity must send the unit owner a notice of delinquency, by
Page 3, Line 26certified mail, return receipt requested, specifying:
Page 3, Line 27(C) The name and contact information for the individual the unit
Page 4, Line 1owner may contact to request a copy of the unit owner's ledger in order
Page 4, Line 2to verify the amount of the debt,
andPage 4, Line 3be provided to the unit owner no later than seven business days
Page 4, Line 4after receipt of the unit owner's request;
Page 4, Line 5(D) That action is required to cure the delinquency and that failure
Page 4, Line 6to do so within thirty days may result in the unit owner's delinquent
Page 4, Line 7account being turned over to a collection agency, a lawsuit being filed
Page 4, Line 8against the owner, the filing and foreclosure of a lien against the unit
Page 4, Line 9owner's property, or other remedies available under Colorado law; and
Page 4, Line 10(E) The availability of, and instructions on how to access,
Page 4, Line 11free online information through the HOA information and
Page 4, Line 12resource center created in section 12-10-801 (1) relating to the
Page 4, Line 13collection of assessments by an association, including the
Page 4, Line 14association's ability to foreclose an association lien for unpaid
Page 4, Line 15assessments and force the sale of the unit owner's home and how
Page 4, Line 16to obtain credit counseling prior to foreclosure.
Page 4, Line 17(a.5) Beginning in January 2026, and each January
Page 4, Line 18thereafter, the division of real estate in the department of
Page 4, Line 19regulatory agencies shall present to the house of
Page 4, Line 20representatives transportation, housing, and local government
Page 4, Line 21committee and the senate local government and housing
Page 4, Line 22committee, or their successor committees, data relating to the
Page 4, Line 23number of persons who have contacted the HOA information and
Page 4, Line 24resource center created in section 12-10-801 (1) for information
Page 4, Line 25concerning:
Page 4, Line 26(I) Credit counseling;
Page 4, Line 27(II) The collection of assessments; or
Page 5, Line 1(III) Foreclosure actions.
Page 5, Line 2SECTION 3. In Colorado Revised Statutes, 38-33.3-316, add
Page 5, Line 3(10.3), (11.5), and (14) as follows:
Page 5, Line 438-33.3-316. Lien for assessments - liens for fines, fees,
Page 5, Line 5charges, costs, and attorney fees - limitations - definitions. (10.3) At
Page 5, Line 6least thirty days before initiating a legal action to foreclose
Page 5, Line 7an association lien, the association shall provide written and
Page 5, Line 8electronic notice to the unit owner or the unit owner's designee
Page 5, Line 9that:
Page 5, Line 10(a) The unit owner has the right to participate in credit
Page 5, Line 11counseling at the unit owner's expense and that information
Page 5, Line 12relating to obtaining credit counseling and the consequences of
Page 5, Line 13foreclosure by an association is available through the HOA
Page 5, Line 14information and resource center created in section 12-10-801 (1);
Page 5, Line 15and
Page 5, Line 16(b) Credit counseling may include:
Page 5, Line 17(I) Discussion of amounts owed to the association in
Page 5, Line 18unpaid assessments and related costs;
Page 5, Line 19(II) The impact of foreclosure on the unit owner's credit;
Page 5, Line 20(III) Additional debt that may be incurred by the unit
Page 5, Line 21owner if foreclosure by the association is completed;
Page 5, Line 22(IV) Options available to the unit owner to retain title to
Page 5, Line 23the unit or to remain in the unit; and
Page 5, Line 24(V) Any other options that may be available to the unit
Page 5, Line 25owner to avoid foreclosure.
Page 5, Line 26(11.5) (a) As used in this subsection (11.5), "fair market
Page 5, Line 27value" means the value of the unit as determined by:
Page 6, Line 1(I) An appraisal conducted by a licensed, independent
Page 6, Line 2appraiser that is paid for by the association;
Page 6, Line 3(II) If agreed to by the unit owner, a comparative market
Page 6, Line 4analysis conducted by a licensed real estate agent selected by
Page 6, Line 5the unit owner; or
Page 6, Line 6(III) If the association is unable to conduct the appraisal
Page 6, Line 7or to obtain a comparative market analysis within thirty days
Page 6, Line 8after foreclosing on the unit due to the action or inaction of
Page 6, Line 9the unit owner, the assessed value of the unit recorded in the
Page 6, Line 10county assessor's property tax records on the date on which the
Page 6, Line 11unit was foreclosed.
Page 6, Line 12(b) As part of a foreclosure action on a unit owner's unit:
Page 6, Line 13(I) The association shall provide written and electronic
Page 6, Line 14notice to the unit owner after the unit is foreclosed of the
Page 6, Line 15methods for determining fair market value of the unit as
Page 6, Line 16described in subsection (11.5)(a) of this section; and
Page 6, Line 17(II) The association or the attorney representing the
Page 6, Line 18association shall submit to the court the fair market value of
Page 6, Line 19the unit.
Page 6, Line 20(c) After foreclosing on a unit through an association
Page 6, Line 21lien described in subsection (2)(b)(I) of this section, the
Page 6, Line 22association or the attorney representing the association shall
Page 6, Line 23make an initial bid at auction that is not less than eighty
Page 6, Line 24percent of the fair market value of the unit, less the
Page 6, Line 25association's allowable costs associated with the foreclosure
Page 6, Line 26action.
Page 6, Line 27(14) As used in this section, unless the context otherwise
Page 7, Line 1requires, "assessment" means a payment for common expense
Page 7, Line 2obligations of unit owners based on a periodic budget adopted by
Page 7, Line 3the association under section 38-33.3-315 (1), or a payment for
Page 7, Line 4limited common elements of unit owners, and includes fees
Page 7, Line 5specific to delinquent payments and reasonable collection costs
Page 7, Line 6for collecting delinquent payments.
Page 7, Line 7SECTION 4. In Colorado Revised Statutes, 38-33.3-401, add
Page 7, Line 8(3.2) as follows:
Page 7, Line 938-33.3-401. Registration - annual fees - data collection of
Page 7, Line 10enforcement actions. (3.2) As part of an association's annual
Page 7, Line 11registration, the association shall submit the following
Page 7, Line 12information to the director of the division of real estate, in the
Page 7, Line 13form and manner determined by the director of the division of
Page 7, Line 14real estate:
Page 7, Line 15(a) For the twelve-month period immediately preceding
Page 7, Line 16the association's annual registration:
Page 7, Line 17(I) The number of unit owners that were, at any time
Page 7, Line 18during the twelve-month period, three or more calendar months
Page 7, Line 19delinquent in the payment of an annual assessment or special
Page 7, Line 20assessment; and
Page 7, Line 21(II) Of the unit owners described in subsection (3.2)(a)(I) of
Page 7, Line 22this section, the number of unit owners that were six or more
Page 7, Line 23calendar months delinquent in the payment of an annual
Page 7, Line 24assessment or special assessment;
Page 7, Line 25(b) For the twelve-month period immediately preceding
Page 7, Line 26the association's annual registration, for unpaid annual
Page 7, Line 27assessments or special assessments or related fees or attorney
Page 8, Line 1fees:
Page 8, Line 2(I) The number of unit owners against which the
Page 8, Line 3association or its designee obtained a judgment;
Page 8, Line 4(II) The number of payment plans entered into between the
Page 8, Line 5association and a unit owner pursuant to section 38-33.3-316.3;
Page 8, Line 6and
Page 8, Line 7(III) The number of foreclosure actions filed against unit
Page 8, Line 8owners pursuant to section 38-33.3-316; and
Page 8, Line 9(c) Any other information specified by the director of the
Page 8, Line 10division of real estate relating to the collection of assessments
Page 8, Line 11and the foreclosure of the association's liens.
Page 8, Line 12SECTION 5. In Colorado Revised Statutes, 38-38-106, amend
Page 8, Line 13(6) as follows:
Page 8, Line 1438-38-106. Bid required - form of bid. (6) (a) Except as
Page 8, Line 15provided in subsection (6)(b) of this section, the holder of the
Page 8, Line 16evidence of debt or the attorney for the holder shall bid at least the
Page 8, Line 17holder's good faith estimate of the fair market value of the property being
Page 8, Line 18sold, less the amount of unpaid real property taxes and all amounts
Page 8, Line 19secured by liens against the property being sold that are senior to the deed
Page 8, Line 20of trust or other lien being foreclosed and less the estimated reasonable
Page 8, Line 21costs and expenses of holding, marketing, and selling the property, net of
Page 8, Line 22income received; except that the holder or the attorney for the holder need
Page 8, Line 23not bid more than the total amount due to the holder as specified in the
Page 8, Line 24bid pursuant to subsection (2) of this section. The failure of the holder to
Page 8, Line 25bid the amount required by this subsection (6) shall not affect the validity
Page 8, Line 26of the sale but may be raised as a defense by any person sued on a
Page 8, Line 27deficiency.
Page 9, Line 1(b) A holder of the evidence of debt that is an association,
Page 9, Line 2as defined in section 38-33.3-103 (3), or the attorney representing
Page 9, Line 3the association, shall make an initial bid that is not less than
Page 9, Line 4the amount determined pursuant to section 38-33.3-316 (11.5).
Page 9, Line 5SECTION 6. Act subject to petition - effective date -
Page 9, Line 6applicability. (1) This act takes effect October 1, 2025; except that, if a
Page 9, Line 7referendum petition is filed pursuant to section 1 (3) of article V of the
Page 9, Line 8state constitution against this act or an item, section, or part of this act
Page 9, Line 9within the ninety-day period after final adjournment of the general
Page 9, Line 10assembly, then the act, item, section, or part will not take effect unless
Page 9, Line 11approved by the people at the general election to be held in November
Page 9, Line 122026 and, in such case, will take effect on the date of the official
Page 9, Line 13declaration of the vote thereon by the governor.
Page 9, Line 14(2) This act applies to enforcement actions instituted on or after
Page 9, Line 15the applicable effective date of this act.