Concerning new bill introduced in the Colorado Legislature

 – By David Graf

There is currently a bill pending in the Colorado legislature known as HB 25-1043. It was introduced as an act "concerning the protection of unit owners in relation to enforcement actions by unit owners’ associations" and is commonly believed to be about protecting owners’ equity in their homes during an association foreclosure. Far beyond merely trying to protect the owners’ equity, the statute requires that an association, as a precondition to foreclosing, shall "strictly comply" with the terms of this provision of CCIOA and any other applicable lien or foreclosure law, other law, or any provision of the associations governing documents.

As a general matter, requiring "strict compliance" with all laws and governing document provisions is potentially problematic for associations. For one, this language requires perfect compliance with all provisions of applicable law and governing documents, irrespective of whether the noncompliance was material or even if it was advantageous to the owner! This means that associations will need to rigidly follow the governing documents and all laws and will be penalized even if they show latitude to an owner throughout the collections process. This type of language removes any judicial discretion to decide whether it was "good enough" or otherwise fair to the owner—instead, compliance must be perfect. At a time when associations are struggling to pay their insurance premiums and fund reserves in any manner whatsoever, this type of legislation is unhelpful to associations and will ultimately hurt the vast majority of assessment paying owners to the benefit of the very few who do not pay their assessments.

This information should be viewed as informational only and not direct legal advice. If you have an issue with a specific matter, the experienced lawyers at Moeller Graf are available to assist.