Update June 9, 2022: Colorado Governor Jared Polis signed House Bill 22-1137 into law on June 3.
This article was produced for ProPublica’s Local Reporting Network in partnership with Rocky Mountain PBS. Sign up for Dispatches to get articles like this as soon as they’re published.
Colorado lawmakers passed a bill on Monday aimed at protecting residents in disputes with homeowners associations.
House Bill 22-1137 restricts the HOA from seeking foreclosures against homeowners who pile up fines for violating community rules known as covenants. The bill also stops the HOA from evaluating these penalties daily and limits them to $500. It is said that
“As it stands, Coloradoans have little recourse and little protection when faced with the endless resources the association holds and the attorneys they may hire,” said co-sponsor of the bill. Denver Senator James Coleman told colleagues at a committee hearing on Friday. .
The bill has undergone a number of changes after its first House committee hearing. Proponents said lawmakers removed a provision limiting the amount of attorney fees the HOA could claim from a resident in a lawsuit, but added a provision specifically prohibiting the foreclosure of liens, which include only fines or the cost of collecting them. said to have added
Coleman said the change came about after hours of meetings with HOA representatives and their supporters. “We really took our time,” he said.
Coleman represents Green Valley Ranch, a community that has been the subject of publicity for months after one of its HOAs filed dozens of foreclosure lawsuits against residents over the past year. Rep. Naquetta Ricks, D-Aurora, was the original sponsor of the bill.
An analysis of litigation data by Rocky Mountain PBS and ProPublica found that Colorado’s HOA has filed at least 2,400 foreclosure lawsuits against residents since 2018. Her HOA in the state has the legal right to seek a foreclosure against the homeowner worth six months. However, that total may also include collection costs such as fees, fines, and attorneys’ fees.
Many homeowners who faced foreclosure told Rocky Mountain PBS and ProPublica that HOA claimed legal fees after they fell behind, ultimately giving them thousands of dollars more than their original debt to save their homes. He says he will have to pay. A resident of the Timbers Homeowners Association I, one of Aurora’s HOA communities, told news outlets the HOA was surprised to learn he had filed 41 foreclosure lawsuits since 2018.
The newly passed bill includes several measures proponents said would give homeowners due process before arrears go to court. Some notices of arrears and fines must be given to the resident and those notices must be provided in the native language specified by the homeowner and he has 18 months to pay off his debts to the HOA. You are given the opportunity to ask for a longer payment plan for
HOA industry representatives told lawmakers they opposed the legislation. They said the rules would be harder to enforce, especially if homeowners were rebellious, and would push more costs on others who comply.
“This bill hurts and costs people who keep their promises. HOA attorney Lindsey Smith, who heads the Institute’s legislative committee, testified.
Proponents of the bill said a provision opening up small claims court as a forum for disputes could make a big difference, even for homeowners who can’t afford to hire a lawyer to fight an HOA.
“The conflict that is creating all the heat within the HOA finally has a place to go,” said Andrew Mowery, an advocate for HOA homeowners whose group helped craft the first law .