Late this afternoon, House Bill 13-1276 ("HB 1276") was introduced in the Colorado House of Representatives by Representative Angela Williams (D-Denver) who is the Chair of the House Business, Labor, Economic and Workforce Development Committee ("Labor Committee").  The co-primary sponsors of the bill in the Senate are Senator Morgan Carroll (D-Aurora) and Senator David Balmer (R-Centennial).  The bill will begin in the House and has been assigned to the Labor Committee.

The purpose of the bill is to: (1) de-escalate the scorched earth perception that HOAs immediately resort to foreclosure when small delinquencies are at issue; and (2) to provide a one-time opportunity for homeowners to enter into a payment plan to satisfy their delinquency prior to their account being turned over to a collection agency or attorney for legal action.

Here are a few highlights of the bill as originally introduced: 

 ● HOAs are not permitted to refer delinquent accounts to a collection agency or legal counsel for action unless they have adopted and comply with a Collections Policy with specified minimum provisions.

● As part of the Collections Policy, homeowners must be provided with notice of the delinquency and be informed that if the delinquency is not cured within 30 days their account may be turned over to a collection agency or legal counsel for action.


● Prior to a delinquent account being turned over to a collection agency or a law firm for legal action, a homeowner has a one-time opportunity to enter into a 6 month payment plan (association boards may extend the time of this payment plan if they wish) with their association to cure the entire amount of the delinquency. If the homeowner defaults on the payment plan or fails to pay their current month assessments, the association may immediately proceed with other action to collect on the delinquency.


● HOAs may only proceed with foreclosure if the balance of the assessments and charges secured by its lien equals or exceeds six months of common expense assessments based on a periodic budget adopted by the association.


● The board of an HOA must take a formal vote to authorize proceeding with a judicial foreclosure. This duty to take a formal vote cannot be delegated to an attorney, insurer, manager or any other person.


Once a communication has been sent to CAI members on this bill, we will be posting that communication on this blog along with the position the Colorado Legislation Action Committee ("CLAC") will be taking on the HB 1276. 


Also, stay tuned for important information on HB 1277 which was just introduced to require the licensure of community association managers in Colorado.  Unfortunately, the link to the bill on the Colorado General Assembly website is currently not working.