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DENVER, CO - The House today passed a bill sponsored by Representatives Iman Jodeh and Jennifer Bacon to protect HOA residents against having to pay for excessive attorney fees that can result from enforcement actions against unit owners and create new safeguards against foreclosure. HB24-1337 passed by a vote of 43-18.
“Millions of Coloradans live in HOA communities, and although we have passed numerous laws to protect HOA homeowners, they are still at risk of losing their homes over minor issues,” said Rep. Iman Jodeh, D-Aurora. “No family struggling to keep up with rising HOA assessments should have to forego buying food, medicine, or other necessities just to foot the bill for legal fees. This legislation ensures that Coloradans won’t be on the hook for paying exorbitant attorney fees racked up by HOAs in addition to the actual payments owed, keeping Coloradans safely housed.”
“Housing affordability is a serious issue for Coloradans, and foreclosures due to unreasonable HOA repayment requirements threaten housing security for thousands of families,” said Rep. Jennifer Bacon, D-Denver. "Our legislation would create a right of redemption, allowing Colorado homeowners the right to purchase the property back rather than watching their home and hard-earned equity go to the highest bidder for pennies on the dollar.”
Currently, home owners associations (HOAs) can require a homeowner to reimburse the HOAs for collection costs and attorney fees without starting a legal proceeding. HB24-1337 would limit the reimbursement amount for attorney fees to 50 percent of the underlying payment owed or $5,000, whichever is less. The bill also prohibits foreclosing on a lien if the homeowner is in a bankruptcy civil action or if the homeowner is in compliance with a payment plan to pay off the collection owed. It also requires the HOA to take specific action before foreclosing on a home, ensuring foreclosure is the last resort.
The bill also creates a right of redemption for properties in an HOA that have been foreclosed on, which would allow unit owners, tenants, nonprofits, community land trusts, and other entities the opportunity to purchase the property before it is transferred, which will help keep wealth in families and communities.