Senate Passes Bill to Strengthen Protections for HOA Residents
DENVER, CO – Today the Senate passed a bill to keep Coloradans housed and strengthen protections for residents of homeowners associations (HOAs).
Currently, HOAs can require a homeowner to reimburse the HOAs for collection costs and attorney fees without starting a legal proceeding. HB24-1337, sponsored by Senate President Pro Tem James Coleman, D-Denver, and Senator Tony Exum, D-Colorado Springs, would limit the reimbursement amount for attorney fees to 50 percent of the underlying payment owed or $5,000, to be adjusted for inflation, whichever is less.The bill waives the reimbursement cap for a unit that is not the owner’s primary residence and allows a court to waive the cap in certain egregious cases.
“No one should be at risk of losing their home for being in violation of minor HOA rules,” Coleman said. “In addition to ensuring Coloradans won’t have to pay sky–high attorney fees, this bill would give homeowners the right to purchase their property back before it's transferred, which creates more housing stability.”
“Homeownership is supposed to create generational wealth, but right now the housing crisis is creating generational debt,” said Exum. “This bill would help ensure HOA foreclosure is a last resort while lowering legal costs and providing Coloradans with the opportunity to buy back their property and stay in their communities. It’s a great step to improving financial and housing stability in Colorado.”
The legislation would prohibit foreclosing on a lien if the homeowner is in a bankruptcy civil action or if the homeowner is in compliance with a payment plan for the owed amount. It also requires the HOA to take specific steps before foreclosing on a home, ensuring foreclosure is the last resort.
The bill would also create a right of redemption for properties in an HOA that have been foreclosed on, which would allow unit owners, tenants, nonprofits, community land trusts, and other entities the opportunity to purchase the property before it’s transferred.
HB24-1337 now returns to the House for concurrence of amendments. Follow its progress HERE.