Hinrichsen’s Bill to Protect Coloradans from Predatory Contracts, Bad Actors Earns Committee Approval

SB23-077 responds to an emerging type of predatory real estate contract targeted at vulnerable Coloradans

DENVER, CO – Senator Nick Hinrichsen’s, D-Pueblo, bill to prohibit predatory practices in real estate contracts cleared the Local Government Committee yestersday.

SB23-077 would prohibit certain terms in residential real estate contracts that unknowingly lock in buyers long-term and amount to predatory loans. The bill establishes that these contracts cannot be bound to future owners, and cannot create a lien against the home – a practice that has resulted in Coloradans paying companies thousands of dollars to lift the lien. The bill aims to protect Colorado homeowners and buyers from exploitative real estate practices.

“It’s indefensible that bad actors are operating in Colorado and deceiving vulnerable folks into contracts they don’t understand and can’t get out of,” Hinrichsen said. “I’m proud to champion this bill that protects Coloradans from this scheme and stops predatory companies from doing business in our state.” 

The bill responds to an emerging type of predatory real estate contract that targets seniors and financially vulnerable homeowners. The bad actors deceptively lock homeowners into right-to-sell contracts and mortgage liens as long as 40 years, often without the victims’ knowledge.

The contracts, which are tied to the land, are passed on to the heir of the property in the event that the owner passes away before the home is sold. Victims are trapped, and forced to pay thousands of dollars to exit the contract. Attorneys General in Massachusetts and Pennsylvania recently took legal action against these companies for their predatory business models.

SB23-077 now heads to the Senate floor. Follow the bill’s progress HERE.