Homes.com Asks R&H for Legal Analysis on HOA Foreclosures
Colorado, one of the nation’s top states with HOA fees, is implementing new legal safeguards to make foreclosure practices more transparent and fair for homeowners who fall behind on their dues.
With 42.2% of Colorado homeowners paying HOA fees, state lawmakers have focused increasing attention on the consequences of unpaid assessments and the rapid escalation some homeowners face.
Recent laws aim to clarify communication, create accountability, and ensure foreclosure is reserved as a last resort. Homes.com interviewed Robinson & Henry Real Estate Senior Associate Robert Schifferdecker for his legal insight in the article, Colorado refines laws on HOA foreclosures to protect homeowners.
“The new law is really focused on making sure HOAs give proper notice and make sure homeowners understand what the consequences can be,” Schifferdecker said.
He explained that people are often surprised to learn that not paying their fees carries this risk. The newest law, which went into effect in October, marks a significant shift in transparency. The revamped law requires HOAs to report to the state every year on delinquent accounts, payment plans, judgments, and foreclosure actions.
It also creates strict notice requirements. Before an HOA can foreclose to recover unpaid dues or fees, it must comply fully with Colorado law and its own bylaws; otherwise, it risks having the foreclosure paused by a court.
Notices sent to homeowners must now include:
A statement that the owner may request a ledger of what they owe, which must be delivered within seven business days.
A warning that unpaid dues could lead to a lien, foreclosure, or loss of equity.
A link to educational resources from the state HOA Information and Resource Center.
HB25-1043, or the Owner Equity Protection in Homeowners' Association Foreclosure Sales, requires that homeowners receive at least 30 days’ notice before foreclosure begins. Once a foreclosure is filed, HOAs must notify owners within five business days that they can pay off the debt or request a delay from the court. Colorado homeowners can request a court-ordered delay of up to nine months to sell the property at fair market value.
“I think the new law wants to make it very clear that this is a right on the associations’ part to be able to pursue this option, but it needs to be a last resort-type thing,” Schifferdecker said.
Schifferdecker believes that added communication steps help both sides.
“I think from an HOA perspective, most of them are understanding [that] this is an extra step, but this is an extra step that looks better for everyone because they're doing the best they can,” he said.
While foreclosure will remain a tool available to Colorado HOAs, boards are urged to use it cautiously and only when truly necessary. In conclusion, Schifferdecker emphasizes that homeowners can best protect themselves by staying informed and understanding the rules, obligations, and governing documents.
“Read everything you get from your HOA,” Schifferdecker said. “Know that declarations are governing documents within an HOA. They control things, and they do have binding authority over what you can and can't do with that property — and a part of that is paying those dues.”
As of November 11, the state logged 90 complaints related to excessive assessments, fees, fines, collections, or foreclosures. Last year, Colorado received 96 complaints.
