Homeowners' Association (HOA) Laws in Colorado

When you buy a home that's part of a planned community, you'll most likely be part of a homeowners' association (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 main functions of the HOA are to collect assessments (monthly HOA dues and special assessments) and enforce the rules of the community. The community's rules are set forth in what"s called the "Declaration of Covenants, Conditions, and Restrictions" (CC&Rs). Also, 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.

The Colorado HOA Reform Package

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.

HOAs Must Establish a Consistent Debt Collection Policy

As of January 1, 2014, Colorado law requires most HOAs to adopt a policy governing the collection of unpaid assessments that specifies:

• the date on which assessments must be paid to the HOA (and when an assessment is considered past due and delinquent)
• any late fees and interest the HOA is entitled to charge on a delinquent owner's account
• any returned-check charges the HOA is entitled to charge, and
• the circumstances under which a delinquent owner is entitled to enter into a payment plan and the minimum terms of the payment plan. (Colo. Rev. Stat. § 38-33.3-209.5).

Written Notice for Delinquent Accounts

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 total amount due, including an accounting of how the total was determined
• whether the homeowner can enter into a payment plan, along with instructions for contacting the association to enter into such a payment plan
• the name and contact information for the individual the homeowner may contact to request a copy of the ledger to verify the debt amount
• that the homeowner must take action to cure the delinquency, and
• that failing to cure the delinquency within 30 days may result in the account being turned over to a collection agency, a lawsuit being filed against the owner, the filing and foreclosure of a lien against the owner's property, and other remedies available under Colorado law. (Colo. Rev. Stat. § 38-33.3-209.5).

Payment Plans for Assessments

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 pursue legal action. (Colo. Rev. Stat. § 38-33.3-316.3).

Limits on Foreclosure

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).

HOA Landscaping Rules

Under Colorado law, HOAs can't needlessly require homeowners to maintain water-dependent landscaping. Among other things, Colorado law prohibits:

• restrictive covenants that forbid or limit xeriscaping
• requirements that homeowners use turf grass in landscaping, and
• requirements that homeowners water their landscaping in violation of water use restrictions. (Colo. Rev. Stat. § 37-60-126, Colo. Rev. Stat. § 38-33.3-106.5).

But HOAs are permitted to adopt and enforce design or aesthetic guidelines that:

• require the installation of drought-tolerant vegetative landscapes
• regulate the type, number, and placement of drought-tolerant plantings, and
• regulate the hardscapes—like concrete patios, pavers, or stone walls—that an owner may install. (Colo. Rev. Stat. § 37-60-126, Colo. Rev. Stat. § 38-33.3-106.5).

Talk to a Lawyer

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.