Collections, liens and the new Colorado law

Everything is on the rise and HOA assessment dues are too. With the increase of vendors, parts and insurance, the HOA is legally responsible to make sure the business is following the laws it must follow. Unfortunately this also means that many homeowners are unable to afford their assessment dues and are falling behind.

Design HOA understands this frustration and while we cannot advise you on what you should do, we can lay out what is an option for you, and also let you know some misconceptions of what many homeowners believe they can get away with.

Under the new Colorado House Bill, homeowners who are delinquent can enter into a payment plan. The payment plan is for delinquent accounts and you can have up to 18 months to pay off the late assessments. During this time, no late fees or interest can be added to your account, however, if you miss a payment during the payment plan, the contract is considered void and fees can commence on your account.

For accounts who are delinquent, the House Bill also requires that the collection letters be sent via certified mail (and yes, those costs can be charged to your account) and a secondary method of contact. We have had many homeowners argue that they never received the certified mail and therefore, a lien cannot be placed on their home. Courts understand that many homeowners will refuse the certified mail. The only requirement is that the collection agency and/or management company can provide proof that they at least tried to contact the homeowner regarding their delinquent account via certified mail. In other words, it doesn't matter if you accept that certified mail or not, after three attempts, the collection agency has fulfilled requirements by law to take legal action against your property and that includes filing a lien.

Buying into an HOA has benefits and drawbacks, as does not buying into an HOA managed community. Assessment dues rarely go down, as the costs to maintain and run the nonprofit business increase every year. If you are struggling to pay your assessment dues, it might be time to see about buying into a less expensive HOA, or trimming other costs in your budget. Assessments should never be seen or treated like an option, as the law acknowledges this is a debt that you voluntarily entered into when you signed your purchase papers for your residence.