Section 1 of the bill requires the unit owners' association of a common interest community (HOA) to adopt, and comply with, a policy regarding the collection of delinquent assessments and other past-due amounts from unit owners. The HOA may not refer a unit owner's account to a collection agency or attorney without first giving the unit owner notice of the total amount due and how it was determined, offering the unit owner a one-time opportunity to enter into a 6-month payment plan, and listing the legal remedies, including foreclosure, that are available to the HOA.
Section 2 of the bill prohibits an HOA from foreclosing its lien for past-due assessments unless the total amount is at least equal to 6 months of regular assessments and unless the HOA's executive board has formally approved the foreclosure action on an individual basis.
Section 3 specifies the terms and conditions of the repayment plan that must be offered. The plan must permit the unit owner to pay off the deficiency in equal installments over a period of at least 6 months; however, the plan requires the unit owner to remain current on regular assessments as they come due during the period and allows the HOA to pursue collection if the unit owner fails to comply with the plan, has previously been subject to a payment plan, or is a bank that has acquired the unit as a result of default by a borrower. For purposes of section 3, "assessments" include fees, charges, late charges, attorney fees, fines, and interest on common expense assessments.
Section 4 of the bill applies its provisions to common interest communities created before July 1, 1992, the effective date of the "Colorado Common Interest Ownership Act", as well as to those created after that date.