HOA Special Assessments in Colorado and How to Challenge Them

HOA special assessments are increasingly common in Colorado, especially for condo and townhome owners. Rising insurance deductibles, hail and wind damage, and years of underfunded HOA reserves have led many homeowners' associations to levy large fees with little notice. These assessments can cost tens of thousands of dollars and leave homeowners wondering if they have any options. 

While Colorado law gives HOAs the authority to impose special assessments, that authority has limits. The validity of an assessment depends on state law, the association’s governing documents, and how the board handled notice, voting, and budgeting. 

This guide outlines how HOA special assessments work in Colorado, when they’re legal, and what steps homeowners can take if they believe an assessment is improper. 

• A special assessment is a one-time fee charged by a homeowners association to cover large or unexpected expenses not paid through regular HOA dues.

• HOA special assessments are legal in Colorado, but only if the board follows state law and the community’s governing documents.

• Common reasons for special assessments in Colorado include storm damage repairs, rising insurance deductibles, underfunded reserves, and emergency structural issues.

• Some special assessments require homeowner approval, unless the HOA can show a true emergency under its declaration or bylaws.

• Refusing to pay a special assessment can lead to late fees, liens, or foreclosure, depending on how the HOA enforces collections.

• Condo owners may have HO-6 loss assessment insurance coverage, but policy limits often fall short of the total assessment amount.

• Legal guidance from an HOA attorney is most helpful when notice was improper, voting was skipped, the amount exceeds the board’s authority, or the HOA is threatening enforcement action.

A special assessment is a one-time charge imposed by a homeowners' association to cover a large or unexpected expense not included in regular HOA dues. Unlike monthly HOA dues, special assessments typically pay for a specific event or project, such as major repairs or insurance shortfalls. They are often billed as a lump sum or in a series of payments. 

Common issues billed as special assessments can include:

• Storm-related roof or siding repairs

• Insurance deductibles after a major claim

• Structural repairs or safety issues

• Capital improvements that weren’t properly funded through reserves

In real estate, a homeowners' association special assessment is a financial obligation imposed on property owners within an HOA community. HOAs can place liens against a home for unpaid assessments, which can affect the homeowner’s ability to refinance or sell. 

Because special assessments are attached to the property, buyers and sellers should carefully review disclosure requirements and timing if a home is being sold with an ongoing assessment. 

In Colorado, HOA special assessments are typically driven by financial pressures facing community associations, particularly condos and townhomes. Common drivers include:

• Hail and wind damage repairs - Colorado experiences frequent severe weather, and repeated claims for roof, siding, and exterior damage can quickly exhaust reserve funds, especially in older communities.

• Rising insurance premiums and deductibles - Insurers have significantly increased premiums and deductibles for multifamily and attached housing. In many cases, HOAs are responsible for large deductibles after a single claim, forcing boards to shift costs directly to homeowners through special assessments.

• Underfunded reserve accounts - Many HOAs’ reserves are insufficient to cover major repairs, leaving special assessments as the only option. 

• Emergency repairs tied to safety or habitability - Issues involving water intrusion, structural integrity, fire risk, or code compliance are frequently cited as emergencies, allowing boards to act quickly and, in some cases, without a membership vote. 

These situations frequently lead to disputes between homeowners and boards about the necessity, approval, or legality of a special assessment. 

Yes, HOA special assessments are legal in Colorado, but only if they comply with state law and the association’s governing documents.

Most Colorado HOAs are governed by the Colorado Common Interest Ownership Act (CCIOA). Under CCIOA, HOA boards generally have the authority to impose special assessments, limited by the association’s declaration, bylaws, and adopted policies. 

Key legal factors include whether:

• owner approval is required

• the assessment exceeds stated limits

• proper notice was given

• the expense qualifies as an emergency

Colorado lawmakers have also placed additional restrictions on HOA fees and enforcement practices. For instance, Colorado law limits certain fees and collection practices, requiring HOAs to base assessments on annual budgets and to bill expenses that benefit only certain units directly to those owners. 

Many disputes over HOA special assessments come down to proper procedure. Because special assessments generally require a budget or a budget amendment, C.R.S. 38-33.3-303 mandates a strict statutory process that, depending on governing documents, may involve:

• A board-approved budget or amendment

• Summary of proposed assessment sent to homeowners (within 90 days) 

• Advance meeting notice and minutes for owner consideration

The assessment is legally tied to this process and can be completely blocked if a majority of the membership votes to veto it at the meeting. This is relevant, seeing as HOA boards sometimes try to bypass these strict notice, meeting, and veto protocols by declaring an “emergency” or creating a false sense of urgency based on their interpretation of their governing documents. 

If a board fails to strictly follow the statutory budget delivery process or violates its own documents, the special assessment may be invalid and subject to legal challenges.

Condo owners in Colorado often hear that their insurance will cover a special assessment, but this is only partially true. Many HO-6 policies include loss assessment coverage, which may help pay for certain assessments tied to insured losses. However:

• Coverage limits are often far lower than the assessment amount

• Not all assessments qualify

• Policy exclusions are common

Unit owners still need to obtain their own personal insurance plans. State law allows HOAs to adopt policies on claims and deductibles, which can directly affect a unit owner’s coverage. If a loss exceeds the HOA’s insurance policy limits and reserves, the remaining repair costs are distributed among the owners as a common expense assessment.

Loss assessment coverage can help reduce the financial impact, but it rarely covers the full amount. Homeowners should not assume insurance validates the assessment’s legality. 

You have options if you believe your HOA’s special assessment isn’t valid, but your timing and approach matter. 

Disputing a special assessment requires some proof of invalidity. Start by requesting:

• Meeting minutes approving the assessment

• Budgets and reserve studies

• Insurance claim documentation

• Notices sent to homeowners

Remember: Colorado law gives owners the right to inspect records, and missing or inconsistent documentation is important evidence. 

Robinson & Henry Real Estate Attorney Peter Towsky is experienced in helping homeowners expose questionable HOA actions. One of Peter’s cases centers on allegations of HOA financial mismanagement. In that case, Peter is representing 31 homeowners who are suing the Todd Creek Farms Homeowners Association.  

Some homeowners pay to avoid late fees or liens while disputing the assessment, but they protest the assessment. Others withhold payment to force the issue. Each approach carries risks. For instance, paying under protest risks tying up your capital in a lengthy battle to obtain a refund, while withholding payment risks aggressive, costly HOA retaliation. 

Under Colorado law, unit owners can’t avoid liability for assessments by abandoning their units or waiving the use of common elements. 

Unpaid assessments may lead to:

• Late fees and interest

• Collection actions

• Liens against the property

Once a lien is recorded, resolving the situation becomes more difficult and costly. 

What Happens If You Don’t Pay a Special Assessment?

If a homeowner refuses to pay a valid special assessment, the HOA may pursue enforcement through:

• Late fees and interest

• Collection agencies or lawsuits

• Liens against the property

• Foreclosure in extreme cases

Before an HOA can initiate legal action or judicial foreclosure for unpaid assessments, a majority of the executive board must formally authorize the action by recorded vote. C.R.S. 38-33.3-209.5 expressly prohibits foreclosure if the owner’s debt consists solely of fines or associated costs. 

Once an HOA takes enforcement action, a homeowner’s options become limited.

In some cases, homeowners may seek a court order to stop enforcement of an invalid assessment. This is especially important when liens or foreclosure threats are involved.

An attorney can assess whether the board exceeded its authority and whether court intervention makes sense.

Yes. Homeowners can challenge an HOA special assessment in Colorado when the board fails to follow state law or the association’s governing documents.

Common grounds for challenging a special assessment include:

• The HOA did not provide proper notice

• Required homeowner approval or voting was skipped

• The assessment exceeds limits set in the declaration or bylaws

• The board claimed an emergency without factual support

• Funds were used for purposes outside the stated justification

Challenging a special assessment often involves reviewing governing documents, requesting HOA records, and evaluating whether the board acted within its legal authority. Homeowners will benefit from consulting a Colorado real estate attorney experienced in HOA disputes and enforcement. 

Legal guidance is often most helpful when:

• The assessment exceeds authority in the governing documents

• Required notice or voting didn’t happen

• The board claims an “emergency” without evidence

• Liens or foreclosure are being threatened

If you’re facing an HOA special assessment and believe the board may have overstepped its authority, a Colorado real estate attorney who handles these disputes can provide legal clarity. 

At Robinson & Henry, our experienced homeowners’ association attorneys regularly assist Colorado homeowners with assessment disputes, enforcement actions, and HOA litigation. We know how these assessments are imposed, where boards commonly make mistakes, and how to step in before late fees, liens, or foreclosure put your property at risk. 

Call 303-688-0944 or book a consultation online to get started.