When you buy a home that’s part of a planned community, you’ll most likely be part of a homeowners’ association (HOA).
The state of Colorado has laws that provide protections when it comes to debt collection practices, foreclosure, and landscaping, among other things, for residents who are part of an HOA.
An HOA is a legal entity set up to manage and maintain a neighborhood. Its members usually consist of homeowners in the community. The original developer of the community typically creates the HOA.
The rules of the community are set forth in what is called the Declaration of Covenants, Conditions, and Restrictions (CC&Rs). The main functions of the HOA are to collect assessments (monthly HOA dues and special assessments) and enforce the rules of the community.
In 2013, Colorado passed an "HOA Reform Package" (including House Bill 13-1276, House Bill 13-1277, and Senate Bill 183) to hold HOAs to stricter standards in certain areas, like debt collection, foreclosure, and landscaping.
As of January 1, 2014, Colorado law requires most HOAs to adopt a policy governing the collection of unpaid assessments that specifies:
Before the HOA can turn a delinquent account over to an attorney or collections agency, the HOA must provide a notice to the homeowner specifying:
The HOA and any debt collector must also make a good-faith effort to coordinate with a delinquent homeowner to set up a payment plan to pay off past-due assessments and other delinquent payments. The homeowner may pay off the delinquency by making equal installments over a period of at least six months. But an HOA doesn’t have to offer a payment plan to a unit owner who has previously entered into a plan. (Colo. Rev. Stat. § 38-33.3-316.3).
If the delinquent owner fails to comply with the payment plan or fails to remain current on regular assessments during the plan, the HOA may then immediately pursue legal action. (Colo. Rev. Stat. § 38-33.3-316.3).
An HOA (or the assignee of the HOA's assessment lien, like a third-party debt collector) may foreclose only if the past-due total amount is equal to six months or more of common expense assessments. (Colo. Rev. Stat. § 38-33.3-316).
Also, the HOA board must vote in favor of foreclosure before proceeding with such a foreclosure on any given delinquent account, and may not delegate this authority to an attorney, insurer, manager, or any other person. (Colo. Rev. Stat. § 38-33.3-316). (Learn more about HOA foreclosures in Colorado.)
Colorado law requires that HOA community managers be licensed under the Colorado Division of Real Estate. (Colo. Rev. Stat. § 38-33.3-402).
Under Colorado law, HOAs can’t needlessly require homeowners to maintain water-dependent landscaping. Among other things, Colorado law prohibits:
But HOAs are permitted to adopt and enforce design or aesthetic guidelines that:
If you’re behind in your HOA payments and facing a possible foreclosure, consider consulting with a local attorney to discuss the legal options that are available in your particular circumstances. You might also want to consider talking to a lawyer if you’re having a disagreement with your HOA over your landscaping or another matter.