Colorado lawmakers are working on passing two bills to provide additional protections for homeowners facing foreclosure due to unpaid fines to their homeowners associations. The homeowner equity bill, HB25-1043, would give homeowners a nine-month stay to sell their houses before facing foreclosure auctions, allowing them to pay off debts and potentially keep the remaining equity. The bill has received approval from both chambers and is expected to be signed by Gov. Jared Polis. Another bill, HB25-1123, would require mediation between homeowners and HOAs before filing complaints in court.
Advocates for HOA reform in Colorado have expressed disappointment over the bills, stating that more could be done to help homeowners avoid foreclosure. The Colorado HOA Forum wanted the bills to include provisions to help homeowners settle debts with their HOAs without going to court, to avoid additional costs such as attorney’s fees.
The lack of oversight in Colorado’s HOA industry became a hot issue in 2022 after a surge in foreclosures filed by the Master Homeowners Association for Green Valley Ranch. Since then, the legislature has implemented some reforms to regulate HOAs, but more action is needed. State Rep. Nequetta Ricks, one of the bill’s sponsors, hopes to see a statewide office created to regulate HOAs and ensure fair treatment of homeowners.
Overall, the bills aim to protect homeowners from losing their houses due to unpaid fines and provide a fair chance for homeowners to retain their equity. However, advocates believe more could be done to help homeowners settle debts with their HOAs without going to court and avoid additional costs.
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