Home Foreclosure Colorado bill would limit HOAs’ power to seize due to unpaid fees

Colorado bill would limit HOAs’ power to seize due to unpaid fees

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AURORA, Colo. — A group of Colorado lawmakers is proposing a bill that would require a homeowners association to take several steps before moving forward with a foreclosure related to unpaid HOA fines and fees.

“House Bill 1137 is a bill that brings transparency and accountability to HOA’s expense,” said the bill’s sponsor, Rep. Naquetta Ricks, D-Aurora.

HB-1137 would require HOAs to alert homeowners of defaults using multiple communication methods, limit interest rates on unpaid fines to no more than 8% per year, and require HOAs to offer a repayment plan.

“It just seems right now the law is so leaning towards HOAs,” Ricks said. “We’ve worked with property managers and a lobby group that lobbies on behalf of HOA fees and they’re the bill collectors as well. So I think we were able to come to an agreement.

Ricks said she was upset after learning that an HOA at Green Valley Ranch recently foreclosed on more than 50 homes, but she actually started drafting her bill months ago.

“A group of seniors came to me last summer and said people were being seized because of fines, so I started looking into it,” Ricks said.

Topazz McBride, vice president of social justice for the Greater Metro Denver Ministerial Alliance, is one person who alerted Ricks to these types of seizures after a woman informed McBride that an HOA was taking her home.

“The association started suing her for a pipe on her property, an underground pipe. She won the case. The judge ruled in his favor. But about three years later, the homeowners association came after her again,” McBride said. “She came to me and told me that someone had taken possession of her house and she had been kicked out of her home by the Denver Sheriff’s Department.”

McBride investigated the matter and said the homeowner’s mortgage lender was not even aware of the foreclosure and the HOA admitted the pipe dispute was the main reason for the lawsuit.

“They finally confirmed that even his monthly dues were up to date, so everything was up to date,” McBride said. “There needs to be a reprieve to their ability, the HOA’s ability to exclude people until the law is revised. Part of the problem is that there is a super privilege law in place.

Under Colorado law, super liens have the highest priority over other liens, including a mortgage.

“In some cases people buy the houses and come back to the landlords saying ‘hey, do you want to rent from me?’ Can you imagine that?” Ricks said.

Ricks said the suggestion is insulting and an example of why the law needs to change.