House Bill 25-1043 Rerevised

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, 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

• Page 3, Line 12(1)(f)(III.5) and (3) as follows:

• Page 3, Line 1338-33.3-123.  Enforcement - limitation.(1) (f)  In determining

• Page 3, Line 14reasonable attorney fees pursuant to this subsection (1) relating to an

• Page 3, Line 15association's foreclosure of a lien against a unit owner for unpaid

• Page 3, Line 16assessments, the court shall give consideration to all relevant factors,

• Page 3, Line 17including:

• Page 3, Line 18(III.5)  Whether the association incurred inflated or

• Page 3, Line 19duplicative attorney fees due to a stay in court proceedings

• Page 3, Line 20pursuant to subsection (3) of this section for the association to

• Page 3, Line 21come into strict compliance with applicable lien or foreclosure

• Page 3, Line 22provisions of this title 38;

• Page 3, Line 23(3)  Notwithstanding any law to the contrary, as a

• Page 3, Line 24condition precedent to recovering money owed to an

• Page 3, Line 25association, collection costs, or reasonable attorney fees or

• Page 3, Line 26costs through the foreclosure of an association lien, the

• Page 3, Line 27association shall strictly comply with any applicable

• Page 4, Line 1association lien or foreclosure provisions of this title 38 and

• Page 4, Line 2any applicable lien or foreclosure provisions of the

• Page 4, Line 3association's declaration, bylaws, articles, and rules and

• Page 4, Line 4regulations.In addition, if a court determines that a common

• Page 4, Line 5interest community is not in strict compliance with the lien or

• Page 4, Line 6foreclosure provisions of this title 38, the court may stay the

• Page 4, Line 7proceedings to grant the association a reasonable period of time

• Page 4, Line 8to come into strict compliance with the law. During the stay in

• Page 4, Line 9proceedings, the association shall not assess or accrue late

• Page 4, Line 10fees, interest, or other delinquency charges against the unit

• Page 4, Line 11owner.

• Page 4, Line 12SECTION 3.  In Colorado Revised Statutes, 38-33.3-209.5,

• Page 4, Line 13amend (5)(a) introductory portion, (5)(a)(V)(C), and (5)(a)(V)(D); and

• Page 4, Line 14add(1)(a.5), (1.7)(a)(I)(D), and (5)(a)(V)(E) as follows:

• Page 4, Line 1538-33.3-209.5.  Responsible governance policies - due process

• Page 4, Line 16for imposition of fines - procedure for collection of delinquent

• Page 4, Line 17accounts - enforcement through small claims court - definitions.

• Page 4, Line 18(1)  To promote responsible governance, associations shall:

• Page 4, Line 19(a.5)  Request periodically from a unit owner or

• Page 4, Line 20designated contact, and maintain in the association's records

• Page 4, Line 21for purposes of providing notice to the unit owner as required

• Page 4, Line 22pursuant to this section and this title 38, a telephone number for

• Page 4, Line 23phone calls, a cellular number for texts, and an email address

• Page 4, Line 24for emails;

• Page 4, Line 25(1.7) (a)  With regard to a unit owner's delinquency in paying

• Page 4, Line 26assessments, fines, or fees, an association shall:

• Page 4, Line 27(I)  First contact the unit owner to alert the unit owner of the

• Page 5, Line 1delinquency before taking action in relation to the delinquency pursuant

• Page 5, Line 2to subsection (1.7)(a)(II) of this section and shall maintain a record of any

• Page 5, Line 3contact, including information regarding the type of communication used

• Page 5, Line 4to contact the unit owner and the date and time that the contact was made.

• Page 5, Line 5Any contact that a community association manager or a property

• Page 5, Line 6management company makes on behalf of an association pursuant to this

• Page 5, Line 7subsection (1.7)(a) is deemed a contact made by the association and not

• Page 5, Line 8by a debt collector as defined in section 5-16-103 (9). A unit owner may

• Page 5, Line 9identify another person to serve as a designated contact for the unit owner

• Page 5, Line 10to be contacted on the unit owner's behalf for purposes of this subsection

• Page 5, Line 11(1.7)(a)(I). A unit owner may also notify the association if the unit owner

• Page 5, Line 12prefers that correspondence and notices from the association be made in

• Page 5, Line 13a language other than English. If a preference is not indicated, the

• Page 5, Line 14association shall send the correspondence and notices in English. The unit

• Page 5, Line 15owner and the unit owner's designated contact must receive the same

• Page 5, Line 16correspondence and notices any time communications are sent out; except

• Page 5, Line 17that the unit owner must receive the correspondence and notices in the

• Page 5, Line 18language for which the unit owner has indicated a preference, if any. An

• Page 5, Line 19association may determine the manner in which a unit owner may identify

• Page 5, Line 20a designated contact. In contacting the unit owner or a designated contact,

• Page 5, Line 21an association shall send the same type of notice of delinquency required

• Page 5, Line 22to be sent pursuant to subsection (5)(a)(V) of this section, including

• Page 5, Line 23sending it by certified mail, return receipt requested. In addition, the

• Page 5, Line 24association shall contact the unit owner or designated contact by two of

• Page 5, Line 25the following means:

• Page 5, Line 26(D)  By regular mail, if the unit owner or designated

• Page 5, Line 27contact has not provided a telephone number, cellular number,

• Page 6, Line 1or email address as additional means by which to receive

• Page 6, Line 2notices.

• Page 6, Line 3(5) (a)  Notwithstanding any provision of the declaration, bylaws,

• Page 6, Line 4articles, or rules and regulations to the contrary or the absence of a

• Page 6, Line 5relevant provision in the declaration, bylaws, articles, or rules or

• Page 6, Line 6regulations, the association or a holder or assignee of the association's

• Page 6, Line 7debt, whether the holder or assignee of the association's debt is an entity

• Page 6, Line 8or a natural person, may shall not use a collection agency or take legal

• Page 6, Line 9action to collect unpaid assessments unless the association or a holder or

• Page 6, Line 10assignee of the association's debt has adopted and follows a written policy

• Page 6, Line 11governing the collection of unpaid assessments and unless the association

• Page 6, Line 12complies with subsection (7) of this section. The policy must, at a

• Page 6, Line 13minimum, specify:

• Page 6, Line 14(V)  That, before the entity turns over a delinquent account of a

• Page 6, Line 15unit owner to a collection agency or refers it to an attorney for legal

• Page 6, Line 16action, the entity must send the unit owner a notice of delinquency, by

• Page 6, Line 17certified mail, return receipt requested, specifying:

• Page 6, Line 18(C)  The name and contact information for the individual the unit

• Page 6, Line 19owner may contact to request a copy of the unit owner's ledger in order

• Page 6, Line 20to verify the amount of the debt, and which copy of the ledger must

• Page 6, Line 21be provided to the unit owner no later than seven business days

• Page 6, Line 22after receipt of the unit owner's request;

• Page 6, Line 23(D)  That action is required to cure the delinquency and that failure

• Page 6, Line 24to do so within thirty days may result in the unit owner's delinquent

• Page 6, Line 25account being turned over to a collection agency, a lawsuit being filed

• Page 6, Line 26against the owner, the filing and foreclosure of a lien against the unit

• Page 6, Line 27owner's property, the sale of the unit owner's unit at auction to

• Page 7, Line 1pay delinquent assessments, which could result in the unit

• Page 7, Line 2owner losing some or all of the unit owner's equity in the unit,

• Page 7, Line 3or other remedies available under Colorado law; and

• Page 7, Line 4(E)  The availability of, and instructions on how to access,

• Page 7, Line 5free online information through the HOA information and

• Page 7, Line 6resource center created in section 12-10-801 (1) relating to the

• Page 7, Line 7collection of assessments by an association, including the

• Page 7, Line 8association's ability to foreclose an association lien for unpaid

• Page 7, Line 9assessments and force the sale of the unit owner's home, and the

• Page 7, Line 10availability of online information from the federal department

• Page 7, Line 11of housing and urban development concerning credit counseling

• Page 7, Line 12before foreclosure that may be accessed through a link on the

• Page 7, Line 13department of local affairs' website.

• Page 7, Line 14SECTION 4.  In Colorado Revised Statutes, 38-33.3-316, add

• Page 7, Line 15(10.3), (11.2), and (14) as follows:

• Page 7, Line 1638-33.3-316.  Lien for assessments - liens for fines, fees,

• Page 7, Line 17charges, costs, and attorney fees - limitations - definitions. (10.3)  At

• Page 7, Line 18least thirty days before initiating a legal action to foreclose

• Page 7, Line 19an association lien, the association shall provide written and

• Page 7, Line 20electronic notice to the unit owner or the unit owner's designee

• Page 7, Line 21that:

• Page 7, Line 22(a)  The unit owner has the right to participate in credit

• Page 7, Line 23counseling at the unit owner's expense and that information

• Page 7, Line 24relating to obtaining credit counseling and the consequences of

• Page 7, Line 25foreclosure by an association is available through the HOA

• Page 7, Line 26information and resource center created in section 12-10-801 (1)

• Page 7, Line 27or through a link to the federal department of housing and

• Page 8, Line 1urban development on the department of local affairs' website;

• Page 8, Line 2and

• Page 8, Line 3(b)  Credit counseling may include:

• Page 8, Line 4(I)  Discussion of amounts owed to the association in

• Page 8, Line 5unpaid assessments and related costs;

• Page 8, Line 6(II)  The impact of foreclosure on the unit owner's credit;

• Page 8, Line 7(III)  Additional debt that may be incurred by the unit

• Page 8, Line 8owner if foreclosure by the association is completed;

• Page 8, Line 9(IV)  Options available to the unit owner to retain title to

• Page 8, Line 10the unit or to remain in the unit; and

• Page 8, Line 11(V)  Any other options that may be available to the unit

• Page 8, Line 12owner to avoid foreclosure.

• Page 8, Line 13(11.2)  No later than five business days after an

• Page 8, Line 14association initiates legal action to foreclose a lien described

• Page 8, Line 15in this section, the association shall provide written and

• Page 8, Line 16electronic notice to all lienholders identified in the unit owner

• Page 8, Line 17property records of:

• Page 8, Line 18(a)  The right to cure the nonpayment pursuant to section

• Page 8, Line 1938-38-104; and

• Page 8, Line 20(b)  The right of the unit owner to file a motion to stay the

• Page 8, Line 21sale of the property at auction pursuant to section 38-38-109.5.

• Page 8, Line 23(14)  As used in this section, unless the context otherwise

• Page 8, Line 24requires, "assessment" means a payment for common expense

• Page 8, Line 25obligations of unit owners based on a periodic budget adopted by

• Page 8, Line 26the association under section 38-33.3-315 (1), or a payment for

• Page 8, Line 27limited common elements of unit owners, and includes fees

• Page 9, Line 1specific to delinquent payments and reasonable collection costs

• Page 9, Line 2for collecting delinquent payments.

• Page 9, Line 3SECTION 5.  In Colorado Revised Statutes, 38-33.3-401, add

• Page 9, Line 4(3.2) as follows:

• Page 9, Line 538-33.3-401.  Registration - annual fees - data collection of

• Page 9, Line 6enforcement actions. (3.2)  As part of an association's annual

• Page 9, Line 7registration, the association shall submit the following

• Page 9, Line 8information to the director of the division of real estate, in the

• Page 9, Line 9form and manner determined by the director of the division of

• Page 9, Line 10real estate:

• Page 9, Line 11(a)  For the twelve-month period immediately preceding

• Page 9, Line 12the association's annual registration, the number of unit owners

• Page 9, Line 13that were, at any time during the twelve-month period, six or

• Page 9, Line 14more calendar months delinquent in the payment of an annual

• Page 9, Line 15assessment or special assessment;

• Page 9, Line 16(b)  For the twelve-month period immediately preceding

• Page 9, Line 17the association's annual registration, for unpaid annual

• Page 9, Line 18assessments or special assessments or related fees or attorney

• Page 9, Line 19fees:

• Page 9, Line 20(I)  The number of unit owners against which the

• Page 9, Line 21association or its designee obtained a judgment;

• Page 9, Line 22(II)  The number of payment plans entered into between the

• Page 9, Line 23association and a unit owner pursuant to section 38-33.3-316.3;

• Page 9, Line 24and

• Page 9, Line 25(III)  The number of foreclosure actions filed against unit

• Page 9, Line 26owners pursuant to section 38-33.3-316; and

• Page 9, Line 27(c)  Any other information specified by the director of the

• Page 10, Line 1division of real estate relating to the collection of assessments

• Page 10, Line 2and the foreclosure of the association's liens.

• Page 10, Line 4SECTION 6.  In Colorado Revised Statutes, add 38-38-109.5 as

• Page 10, Line 5follows:

• Page 10, Line 638-38-109.5  Continuance of sale - unit association lien - unit

• Page 10, Line 7owner's motion to stay - escrow of proceeds - purchaser title.

• Page 10, Line 8(1)  Notwithstanding any provision of this title 38 to the

• Page 10, Line 9contrary, at any time after a unit owners' association files an

• Page 10, Line 10action for foreclosure of the unit association lien on a unit, but

• Page 10, Line 11prior to the sale date at auction, the unit owner or the unit

• Page 10, Line 12owner's designated representative may file a motion with the

• Page 10, Line 13court to stay the sale of the unit with notice of the unit owner's

• Page 10, Line 14intent to list the unit for sale for the fair market value of the

• Page 10, Line 15unit or an alternate amount as specified in subsection (2) of this

• Page 10, Line 16section. The unit owner or the unit owner's designated

• Page 10, Line 17representative shall provide notice of the motion to stay the

• Page 10, Line 18sale to the association and to the officer.

• Page 10, Line 19(2) (a)  The unit owner shall state in the motion to stay:

• Page 10, Line 20(I)  The fair market value of the unit, as determined by:

• Page 10, Line 21(A)  An appraisal of the unit;

• Page 10, Line 22(B)  A market analysis conducted by a licensed real estate

• Page 10, Line 23agent;

• Page 10, Line 24(C)  An estimate from an online real estate marketplace

• Page 10, Line 25company; or

• Page 10, Line 26(D)  The assessed value of the unit recorded in the county

• Page 10, Line 27assessor's property tax records on the date of the court's order

• Page 11, Line 1to sell the unit;

• Page 11, Line 2(II)  An alternate value for the unit that, if less than the

• Page 11, Line 3fair market value of the unit, exceeds the sum of all liens and

• Page 11, Line 4any fees or costs advanced by the holder of the evidence of

• Page 11, Line 5debt.

• Page 11, Line 6(b)  The court may allow the unit owner additional time to

• Page 11, Line 7submit the fair market value or alternate value to the court.

• Page 11, Line 8(c)  The unit owner shall list the unit at the sale price

• Page 11, Line 9specified in the motion to stay, unless the association objects to

• Page 11, Line 10the unit owner's declared fair market value or alternate value

• Page 11, Line 11of the unit. The association may submit evidence of the unit's

• Page 11, Line 12value to the court. Based on the evidence, the court shall set

• Page 11, Line 13the initial list price of the unit and may further order a change

• Page 11, Line 14to the list price if supported by sufficient evidence.

• Page 11, Line 15(3)  The court's order staying the sale of the unit at

• Page 11, Line 16auction is in effect for nine months after the date of the

• Page 11, Line 17order. The court may extend the stay of the sale of the unit at

• Page 11, Line 18auction beyond nine months upon evidence that the sale of the

• Page 11, Line 19unit is imminent or for good cause, as determined by the court.

• Page 11, Line 20(4)  If a sale date was scheduled, the officer shall post or

• Page 11, Line 21provide notice of the continuance of the sale while the stay is in

• Page 11, Line 22effect.

• Page 11, Line 23(5)  The court shall enter any orders necessary to ensure

• Page 11, Line 24that the proceeds of the sale of the unit are held in escrow and

• Page 11, Line 25distributed by the court in accordance with lien priority and

• Page 11, Line 26other applicable law.

• Page 11, Line 27(6)  A purchaser of a unit listed for sale pursuant to this

• Page 12, Line 1section shall take title to the unit free and clear of any

• Page 12, Line 2encumbrances relating to filing of the foreclosure action.

• Page 12, Line 3SECTION 7.  Act subject to petition - effective date -

• Page 12, Line 4applicability. (1)  This act takes effect October 1, 2025; except that, if a

• Page 12, Line 5referendum petition is filed pursuant to section 1 (3) of article V of the

• Page 12, Line 6state constitution against this act or an item, section, or part of this act

• Page 12, Line 7within the ninety-day period after final adjournment of the general

• Page 12, Line 8assembly, then the act, item, section, or part will not take effect unless

• Page 12, Line 9approved by the people at the general election to be held in November

• Page 12, Line 102026 and, in such case, will take effect on the date of the official

• Page 12, Line 11declaration of the vote thereon by the governor.

• Page 12, Line 12(2)  This act applies to enforcement actions instituted on or after

• Page 12, Line 13the applicable effective date of this act.