Colorado HOA adopts new foreclosure notification requirements for unit owners

A new legislative proposal, House Bill 1043, introduced in the Colorado State Legislature on April 9, 2025, aims to enhance protections for homeowners facing foreclosure due to unpaid assessments by homeowners' associations (HOAs). This bill seeks to address the growing concern over the potential loss of equity and homes for unit owners who fall behind on their payments.

At the heart of House Bill 1043 is a requirement for HOAs to provide clear and timely communication to homeowners before initiating foreclosure proceedings. Specifically, the bill mandates that associations must give written and electronic notice at least 30 days prior to any legal action to foreclose on an association lien. This notice must inform homeowners of their right to seek credit counseling and provide access to resources that outline the consequences of foreclosure. The goal is to ensure that homeowners are fully aware of their options and the potential ramifications of their financial situations.

The bill also emphasizes the importance of transparency by directing associations to share information about the HOA Information and Resource Center, which offers free online resources related to assessment collections and foreclosure processes. This initiative is particularly significant as it aims to empower homeowners with knowledge and support, potentially preventing unnecessary foreclosures.

While the bill has garnered support from various advocacy groups focused on housing rights, it has not been without controversy. Some HOA representatives express concerns that the additional requirements could complicate the collection process and delay necessary actions against persistently delinquent homeowners. However, proponents argue that the bill is a crucial step toward protecting vulnerable homeowners and promoting fair practices within associations.

The implications of House Bill 1043 extend beyond individual homeowners; they touch on broader economic and social issues within Colorado's housing market. By providing homeowners with more resources and support, the bill could help stabilize communities and reduce the number of homes lost to foreclosure, which has lasting effects on local economies and neighborhoods.

As the legislative process unfolds, stakeholders will be closely watching the discussions surrounding this bill. If passed, House Bill 1043 could significantly alter the landscape for homeowners and HOAs alike, fostering a more equitable approach to managing assessments and foreclosures in Colorado.