HB25-1043 Summary
HB25-1043: Owner Equity Protection in Homeowners’ Association Foreclosure Sales
Prime Sponsors: Representative Naquetta Ricks, Representative Jennifer Bacon, Senator Tony Exum
Introduced: January 8, 2025
Signed: June 4, 2025
Effective Date: October 1, 2025
Summary:
House Bill 25-1043 relates to HOA foreclosure notifications and aims to (a) help homeowners facing foreclosure, (b) keep their home equity, and (c) stay in their homes.
An HOAs policy on the collection of unpaid assessments (see 38-33.3-209.5, C.R.S.) must be updated to include three (3) provisions:
An advisement that a unit owner may request a copy of the ledger from an individual represented by the association (i.e. board member) or the association’s agent (i.e. community association manager) verifying any amounts owed, which the HOA must provide within seven (7) business days.
The Act does not specify by what means the unit owner must notify the association. Email or telephone would be acceptable unless the association’s policy indicates otherwise.
An advisement that failure to pay a delinquent assessment could result in the HOA filing a lien and instituting foreclosure of the lien (a “foreclosure action”), and that a foreclosure action could result in the sale of the unit at auction causing the owner to lose some or all of the owners’ equity in the unit; and
An advisement that free information relating to the HOA's collection of assessments and the HOA's ability to file a foreclosure action and a link to credit counseling information is available online through the HOA information and resource center.
Associations should ensure every unit owner has a copy of its collections policy, as well as provide a current copy to any requesting unit owner. The association may consider posting a current and valid copy of the policy to its website for review by the owners.
At least thirty (30) days prior to initiating a foreclosure action, an association must provide a delinquent owner with the three (3) advisement provisions listed above in both written and electronic form.
If an owner does not provide the association with an email address after the association has requested it, the association should send the advisements by regular mail.
The association must send the delinquent owner notice that the owner has a right to participate in mediation with the association prior to foreclosure.
In sending delinquency notices to owners, an association must send the notice by certified mail, return-receipt requested, in addition to two of the three following means:
Telephone;
Text message; or
Electronic mail
An association must periodically request from a unit owner – or the unit owner’s designated contact – a telephone number, a cellular number, and an email address to comply with this requirement.
If, after requesting from the owner the owner’s contact information and the owner does not provide the requested contact information, the association may forego these contact methods and instead send the notice by regular mail.
The Act does not specify how long the owner has to provide contact information to the association.
If sending by regular mail, the association must still abide by the certified mail, return-receipt requested, requirement.
Within five (5) business days after the HOA initiates foreclosure action, the association must provide the delinquent owner with written and electronic notice that the delinquent owner has the right to cure the delinquency and to file a motion with the court to stay the sale of the property at auction.
At any time after the association files a foreclosure action – but prior to the date of the auction – the delinquent owner may file a motion with the court to stay the auction of the unit to allow the delinquent owner to list the unit for sale at fair market value (or at an alternate amount determined by the court). The court's order is in effect for nine (9) months after the date of the order.
As part of the Colorado Division of Real Estate’s HOA registration mandate, an association must submit the following information for inclusion in the HOA Information & Resource Center’s Annual Report:
The number of unit owners 6 or more months delinquent in the payment of assessments during the preceding 12-month period;
The number of judgments obtained against unit owners;
The number of payment plans entered into with unit owners; and
The number of foreclosure actions filed by the HOA and other information requested by the director.
Of significant importance is the legal notion of strict compliance, which means the association must follow the Colorado Common Interest Ownership Act (“CCIOA”), its Declaration, Bylaws, Articles, and Rules and Regulations to the letter. Associations should be aware that even the slightest deviation could result in legal challenges and substantial financial penalties to the association.
Strict compliance differs from the legal notion of substantial compliance, which means the association may deviate slightly from CCIOA and its Declaration, Bylaws, Articles, and Rules and Regulations, provided the main objective or purpose is met.
An example of an association not being in strict compliance with CCIOA could be the executive board voting to send a delinquent owner to collections without recording the vote at a formal meeting, or requiring a delinquent owner to pay more than $25/month on an eighteen-month payment plan specified under 38-33.3-209.5(7)(a), C.R.S.
Further, because the new law requires strict compliance with lien and foreclosure laws and regulations, the association must ensure it is registered with the Colorado Division of Real Estate prior to initiating any enforcement or legal action on a delinquent owner. To learn more about the Division’s HOA registration mandate, an association can visit https://dre.colorado.gov/hoa-registration-services.
An association not in strict compliance with CCIOA, its Declaration, Articles, Rules, and Regulations in pursuing a foreclosure action may be prevented from collecting amounts owed to it.