On August 10, 2022, House Bill 22-1137 (“HB 1137”) went into effect. The new law at that time made significant changes to how HOAs in Colorado are permitted to handle enforcement and collection matters. Now that we have lived with and worked under this law for a year, we have discovered issues with the law that adversely impact HOAs. However, the biggest failure of this new law is that it protects violating homeowners to the detriment of the 99% of other homeowners and residents in their community who are forced to live with these continuing violations which HB 1137 promotes.
A fundamental concept that is missing in HB 1137, is that HOAs are tasked with balancing the interests of individual homeowners living in their community with the interests of all homeowners and residents living in their community. At its core, the proponents of HB 1137 incorrectly made the assumption that HOAs routinely discriminate or treat unfairly the individuals who are violating the use restrictions in the declaration of their communities or the rules of their community. The proponents did not take into account that use restrictions and rules are intended to protect the interests of all of the homeowners and residents living in their communities and are not intended to protect the corporate entity which is known as the HOA.
Since we are still in the midst of summer, I have noticed when driving into the HOA where I am a homeowner that the two sixty-day cure periods that owners have for non-health and safety violations have made it extremely difficult for my community to enforce architectural guidelines. I live in a large planned community in Arvada where the vast majority of the owners take pride in keeping their yards in a tidy condition and their homes painted in compliance with the requirements of the community. However, every evening when I turn into my community, the first thing I notice is the home that was painted with colors that are not approved for our community (my HOA has 41 color combinations to choose from) and the house directly across the street from that eye sore has weeds that have now reached at least 2 feet in height. I’m glad that I live several blocks away from those two homes!
The cure periods for these violations have empowered these owners to thumb their nose at my HOA and their neighbors, since they can’t be fined for pro-longed periods of time and the HOA cannot bring a lawsuit against them for injunctive relief during the cure periods. Not to mention, I suspect my HOA doesn’t want to use the assessment income paid by all of the other homeowners in my community to bring a lawsuit against these two homeowners who refuse to come into compliance. Contrary to what the proponents of HB 1137 assumed, HOAs are not big corporate entities with unlimited funds. Instead, their income is reliant upon the assessments which the homeowners pay.
Finally, as an HOA attorney, I have recently had to deal with an unprovoked physical attack in a community I represent. Based upon HB 1137, we had to provide the individual who perpetrated the attack with 72 hours to cure their violation. What does that even mean? Does that mean if the individual doesn’t attack anyone else within 72 hours, the Association cannot levy a significant fine against the attacker or file a lawsuit for injunctive relief to protect the other owners and residents in the community? The provision providing a 72 hour cure period for health and safety violations does not provide the tools HOAs need to protect the other owners and residents in the community from these horrific violations!
There is a HOA Task Force that is convening for the purpose of looking at homeowner’s rights – which includes issues relating to enforcement. I hope you will join me in encouraging this Task Force to look at the unintended consequences of HB 1137 and to ensure that the rights of all owners and residents in HOAs in Colorado are protected. It is essential for HOAs and this Task Force to balance the rights of individual homeowners with the rights of all owners and residents living in HOAs. It is possible to get this balance right!