In 2022, the Colorado State Legislature made significant changes to the Colorado Common Interest Ownership Act (CCIOA), the comprehensive law that governs how most homeowners’ associations are created and operated.
The amendments to the Colorado Common Interest Ownership Act aim to limit some of the power that HOA board members, management companies, and their attorneys routinely abuse.
In this article, we cover the changes to the CCIOA and dive into six ways you can fight back against your HOA.
HOA Lawyers to Fight for Homeowners
HOAs do not have unlimited power. Our HOA lawyers have successfully helped homeowners stand up to their HOAs. If you believe your HOA is acting illegally, unethically, or inappropriately, call 303-688-0944 to begin your free case assessment.
Changes to the Colorado Common Interest Ownership Act
Places Limits on Fines & Foreclosures
Covenant Violations and Delinquent Accounts
Some HOAs have hit homeowners with daily late fees or fines for what amounts to simple covenant violations. On the more extreme end, homeowners have faced foreclosure due to delinquent accounts and covenant violations. Changes to the CCIOA does away with these predatory practices.
Let’s take a look at the new rules that protect homeowners:
Late Fee Notifications
If you are late paying your monthly assessment, fines, or fees, your HOA must first contact you about the delinquency before it can take action against you. It must also keep a record of when it contacts you. C.R.S. § 38-33.3-209.5 (1.7)(a)(I)
By law, delinquent notices should be sent to you by certified mail with a return receipt and post a copy of it at your unit. Additionally, your HOA has to reach out to you in one of the following ways:
- first-class mail
- text message to a cell number you provided
- email to an address you provided
Additionally, homeowners can elect to receive notices in languages other than English.
If a covenant violation jeopardizes public safety, the HOA must inform you in writing that you have 72 hours to fix the problem or risk a fine. If the violation still exists after 72 hours, the HOA can begin to fine you every other day and take legal action. C.R.S. § 38-33.3-209.5 (1.7)(b)(II)
If the violation doesn’t pose a threat, the HOA must notify you that you have 30 days to address the issue. If you haven’t corrected the problem within 30 days, you could be fined up to $500. The HOA must grant you an additional 30 days to make changes before it can take legal action against you. C.R.S. § 38-33.3-209.5 (1.7)(b)(III)
Payment Plans for Past-Due Fees
Colorado Homeowner’s Associations are required to “make a good-faith effort to coordinate with the unit owner to set up a payment plan.” C.R.S. § 38-33.3-316.3 (1)(b)
Homeowners should have at least 18 months to pay off the debt. The HOA can take legal action against you if you fail to pay three or more installments or remain current with regular assessments during the repayment period.
The law doesn’t require your HOA to set up subsequent payment plans with you.
Collection Agencies and Foreclosures
Your HOA or its management company cannot turn over your past-due account to a collection agency or an attorney unless a majority of its board members votes to do so. The vote must be taken at a meeting that follows Colorado’s HOA board meetings rules. C.R.S. § 38-33.3-209.5 (1.7)(a)(II)
Also, your HOA cannot pursue a foreclosure action against you for unpaid fines.
If your HOA violates any foreclosure laws, you have five years to seek damages in a civil lawsuit. You could receive up to $25,000 in damages, costs, and reasonable attorney fees. C.R.S. § 38-33.3-316.3 (5)
Access to Common Areas During Upkeep
Common areas within an HOA vary between communities but can include buildings or spaces like a clubhouse, pool, and green space.
The amendment to the CCIOA states common areas cannot be closed to residents for more than three days at a time without notice.
“In regulating the use of common elements … an association shall preserve and protect unit owners’ ability to use and enjoy common elements and shall not unreasonably restrict or prohibit unit owners’ access to, or enjoyment of, any common element, including during the maintenance, repair, replacement, or modification of a common element.” C.R.S. 38-33.3-302.5 (1)
Your HOA may restrict your access to a common area to upgrade it or make repairs, for instance. Consider this example:
Let’s say, your community pool needs to be repaired. Your HOA can prevent people from using it until it’s fixed to ensure everyone is safe and that the pool isn’t further damaged.
However, if it’s going to take more than 72 hours to fix your pool (or any other common area) your HOA must let you know about it through an email or a written notice that must include:
- a simple reason for the restriction to the common area
- estimated dates and times when the restriction begins and ends
- a phone number or email address where you can ask questions about the restriction
Your HOA must also post a notice at every access point to the common element with all of this information.
Parking and Right-of-Way Issues
Limits HOA Parking Restrictions
Another amendment to the CCIOA has to do with public streets and parking. HOAs are notorious for banning homeowners from parking certain vehicles on the street. State law now prohibits HOAs from enforcing covenants that stipulate what kinds of vehicles homeowners can park on a public street.
“… the association shall not require that a public right-of-way be used in a certain manner.” C.R.S. § 38-33.3-106.5 (I)(d.5)
In other words, your HOA should not stop you from parking your RV, boat, or classic clunker on a public street. Now, if you park a broken-down car on the streets for an extended period of time, your HOA could reach out to your local police or sheriff’s department to potentially have it towed.
6 Ways to Fight Your HOA
No. 1: Remove a Board Member
If you feel like a board member has it out for you or your neighbors, sometimes the only true resolution to the problem is to replace the board member.
How to Remove a Board Member Without Court Action
Your HOA documents and Colorado Revised Statute 7-128-108 give homeowners the right to remove board directors with or without cause. Here are the steps our HOA lawyers will take to remove a board member:
Step 1: Review Your HOA documents
Your HOA has the right to modify some of the procedural and legal requirements set forth under Colorado law. We will review the documents to determine what, if any, changes were made and whether they were legal.
Step 2: Call a Special Election
With your help, we gather enough support to call a special election. We’ll make sure the meeting notice includes the specific legal requirements so the HOA’s attorney cannot use a technicality to stop the special election.
Step 3: Hold the Vote
Our HOA lawyers will work with you to make sure there are enough votes to remove the board member.
Step 4: Vote for New Board Members
Elect more reasonable new board members.
How to Remove a Board Member With Court Action
If the board member’s actions are especially egregious, it may be necessary to file a court action under Colorado Revised Statute 7-128-109 to remove him or her. Allegations may include claims that the board member engaged in fraudulent or deceptive conduct or grossly abused his or her authority. You may also argue that it’s in the HOA’s best interest to remove this board member.
You should consider the following if you plan to go to court:
- Who Brings the Case: Generally, it’s brought by the HOA or by members holding at least 10% of the votes. (We can give you strategies to get the requisite numbers of votes.)
- Who are the Parties: Your HOA is named as a defendant.
- Look Ahead: You may ask the court to restrict the board member from running again.
- Where Do I File: In District Court in the county where the principal office is located.
How to Develop the Case
Our HOA lawyers may work with private investigators to gather information. We also could take depositions, gather witness testimony, and inspect the HOA’s financial records.
An Effective Solution to Illegal HOA Actions
Old board members no longer have the power to harass you once new board members are elected. Additionally, the new board can fire the management company and its attorneys.
It’s highly contentious to remove board members. Expect the HOA attorney to vigorously defend the current board and use every legal option they have to stop you.
It can be very time-consuming and expensive to remove board members. You may consider asking other homeowners to pitch in with legal fees.
No. 2: Demand an Inspection of Records
You have the right to inspect certain HOA documents. Our attorneys can demand the records for you if your HOA does not allow you to inspect their records. We can even ask the court to compel the HOA to turn over the documents.
You are entitled to review the following documents:
These records are defined in the HOA’s declaration or bylaws.
The CCIOA requires HOAs to disclose records within 90 days after the end of the year.
These detailed records offer receipts and expenditures that affect HOA operations.
The records for construction defect claims and the amounts received for settlement of those claims.
You may request all of the board’s meeting minutes which include actions the board takes.
Communications Among Board Members
Get votes cast by board members that are related to the board’s actions.
You’re entitled to a list of the homeowner’s names and addresses.
Obtain the HOA’s current declaration, covenants, bylaws, articles of incorporation, rules and regulations, and policies.
Get the HOA’s financial statements from the past three years and the last seven years of tax returns.
Contact Information for Officers
You may request the current board members’ and officers’ names, email addresses, and mailing addresses.
Ask for the most recent annual report the HOA gave the Secretary of State.
Find out about any unpaid assessments currently levied against an owner’s unit.
Request the HOA’s most current reserve study.
Get all contracts to which the HOA is currently a party as well as contracts for work performed within the past 2 years.
Approvals & Denials
Find out all the requests homeowners have made and how the board ruled on them.
You’re allowed access to ballots, proxies, and other records related to voting by owners for 1 year after the election, action, or vote;
Read through the resolutions the board adopted related to the characteristics, qualifications, limitations, and obligations of its members.
Obtain all written communications sent to homeowners within the past 3 years.
No. 3: Revoke the HOA Management Company’s Registration
To fight the HOA management company, you often must attack them where it hurts: their pocketbook. Colorado law requires HOA management companies to register with the Colorado Department of Regulatory Agencies. This law took effect on July 1, 2015. Therefore, the very existence of the management company requires that they maintain their registration. If the management company loses its registration, or other HOAs find out about inappropriate behavior, the management company risks losing business.
Here’s what our HOA lawyers do if they believe that legal action against the HOA management company is warranted:
- Review the regulatory registrations to ensure the HOA management company is licensed.
- Investigate whether the principals are properly licensed. For example, if the principals that are required to be registered have certain criminal convictions, the license may be revoked.
- Assist homeowners in filing complaints against the management company with the Colorado Department of Regulator Agencies, Division of Real Estate.
- Take civil action against the HOA management company if necessary.
No. 4: Determine if the Board Met its Fiduciary Duties
All HOA board members have a fiduciary duty to their homeowners. We hire professionals such as private investigators and forensic accountants to investigate claims of improper conduct. Our goal is to uncover enough evidence to build a case.
As HOA lawyers, we have access to various discovery methods such as document subpoenas, record inspections, background checks, and depositions.
Each board member has the duty to act:
- Prudently – make careful business-related decisions
- Diligently – conduct necessary research and analysis before making decisions
- With Care – act in the homeowners’ best interest
- With Loyalty – place the homeowners’ interest above their own
- Confidentially – no improper disclosure of your personal information
- Within the Scope of Authority – only carry out responsibilities granted to them under either statute or the HOA governing documents
An HOA director’s liability may be reduced if the homeowners waive the right to recover against the directors in the bylaws. Nevertheless, certain claims against the director will never be eliminated.
Under Colorado Revised Statute 7-128-402, an HOA board cannot eliminate potential liability for:
- Unlawful Distributions
- Unlawful Loans to the Director
- Breach of the Director’s Duty of Loyalty
- Acts or Omissions not in Good Faith
- Intentional Misconduct
- A Knowing Violation of Law
No. 5: Defenses Against HOA Attacks
You have a variety of defenses that can be raised against HOA enforcement actions.
Failure to Follow the Rules
Your HOA must have a written policy governing the imposition of fines. By carefully reviewing the HOA documents and the actions of the Board and related parties, our lawyers often find that the HOA does not have or did not follow its own policies.
Among the policies Colorado law requires is one that provides “a fair and impartial fact finder as to whether the alleged violation actually occurred,” and which homeowner should be held liable. In fact, the HOA must “guarantee the…owner notice and an opportunity to be heard before an impartial decision-maker.” C.R.S. § 38-33.3-209.5
Most homeowners and many attorneys are unaware of this defense, and too often give in to the HOA’s demands.
Abandonment or Selective Enforcement
Do you feel that your HOA is singling you out? Our attorneys are experienced with using the selective enforcement defense and the closely-related abandonment defense.
To successfully use this defense, you must show that a reasonable person observing the neighborhood, with knowledge of the covenants of your HOA, would conclude that the HOA has abandoned the enforcement of the covenant. You must show other similar violations.
Likewise, your HOA cannot act in an arbitrary or capricious manner. Your HOA must uniformly and consistently enforce the covenant. You may have a case for selective enforcement if you can show the HOA treated you differently than other homeowners in a similar situation.
For example, you and your neighbor both install the same sheds behind your homes. Your HOA fines you for the shed. Your neighbor is not fined.
No. 6: Fight Back with HOA Lawyers
Sometimes our HOA lawyers advise our clients to seek a declaratory judgment. A court-ordered declaratory judgment determines the parties’ rights without ordering remedies or awarding damages.
A declaratory judgment is often the best court of action if the HOA has ordered you to make a change or remove something from your property.
In other circumstances, counterclaims against the HOA or an individual board member may be warranted. You must bring your claims in a timely manner or they will be lost forever. Don’t wait.
Damages & Counterclaims
The law provides a variety of remedies if your HOA is found to be violating the law.
Here are a few of the remedies that may be available to you:
- monetary damages for your direct and indirect expenses
- attorneys fees
- punitive damages
- injunctions and restraining orders to stop the illegal actions
Let Our HOA Lawyers Fight Your HOA
If you believe that your HOA is acting illegally, unethically, or inappropriately, contact our HOA lawyers. Let’s talk about what’s going on with your HOA. Call 303-688-0944 to begin your free case assessment.