Colorado Bill Would Limit HOAs Powers Over Residents
DENVER (CBS4) - As dozens of families in the Green Valley Ranch neighborhood face homelessness following foreclosures associated with their HOA, two lawmakers at the State Capitol have teamed up to try and limit the powers of homeowner's associations. HB22-1137 would drastically reduce HOA's influence on foreclosures by ridding of their ability to seek evictions over relatively minor infractions.
Alongside Republican Mary Bradfield, Democrat Naquetta Ricks sponsored the bill which is currently in committee.
"We are fighting to make sure people are able to build generational wealth," Ricks told CBS4's Dillon Thomas.
Current Colorado Law permits HOA's to issue fines and fees as assessments against homeowners who fail to comply with individual HOA standards.
As seen with the Master Homeowners Association of Green Valley Ranch in 2021, HOA's and lawyers can mount fines against families that fail to pay fines. Fines can be for minor or major violations of HOA rules.
"Maybe you didn't cut your grass, or you left your trash can out too long, or maybe you have a dead tree in your yard," Ricks have as examples of fines that can lead to foreclosure if unpaid.
They can then move for a court to foreclose on the home due to failure to pay fines. A judge can order the home foreclosed, even if the homeowner never missed a single mortgage or HOA monthly due.
Some homeowners in Green Valley Ranch told CBS4 they knowingly didn't pay fines for minor infractions. However, they expected a lien on their homes. They did not expect that they could lose their homes of 15 or more years over roughly $5,000 in unpaid fines.
"They just had no idea that they would be forced into foreclosure by the HOA," Ricks said.
HB22-1137 would get rid of many foreclosure powers for HOA's when it comes to fines. Instead, HOA's would be required to have public board meetings to vote on taking issues to court. They would also only be able to take homeowners to civil court. Instead of losing their homes to foreclosure, the new proposed law would give civil court the ability to order payments.
The bill would also require HOA's to contact owners by more ways than just a single letter in the mail. HOA's would have to send notices to owners through avenues like priority mail, email, phone call or text.
Ricks said opponents to the bill include the Community Associations Institute. CBS4 reached out to CAI for comment on the bill and this report, but did not hear back before this article was published.
Ricks said the proposed law would not only protect communities and their covenants, but it would also protect owners from losing their greatest investments over relatively minor infractions.
"We want to make sure HOA's are still able to do their jobs in managing these properties. But, that homeowners also maintain their rights and we are not putting people on the street and they're becoming homeless because of these HOA's," Ricks said.
