The Guide to Colorado HOA Laws

Colorado HOAs are required to adopt written policies that cover a prescribed list of rules and procedures and cannot impose daily fees on residents.

• Every HOA must have a policy to cover:
  • Collection of unpaid assessments
  • Conflicts of interest
  • Conduct of meetings
  • Covenant and rule enforcement, including fines
  • Inspection and copying of records
  • Investment of reserve funds
  • Adoption and amendment of policies and rules
  • Disputes between the association and owners
  • Charging of unscheduled fees
• Homeowners cannot be fined without due process.
• HOAs cannot charge daily late fees or daily fines for covenant violations.
• If a homeowner owes money to the HOA, they must receive monthly itemized statements detailing any outstanding assessments, fines, or fees.

What it means for HOAs: Homeowners can rely on their boards to establish official policies and enforce them fairly and impartially. Fines and fees must be fully documented and explained in writing, and boards cannot impose them daily.

This statute concerns the accessibility of board meetings and defines when private sessions can be held.

• HOAs must hold at least one membership meeting annually and provide residents with sufficient notice of the agenda and any items to be voted on.
• Homeowners have the right to attend all board meetings.
• Residents must be allowed to speak before the board votes on a matter, though time limits may be imposed.
• Meeting agendas must be made available to the entire community.
• Boards can meet behind closed doors in an executive session for a limited list of reasons, including personnel issues, criminal investigations, and individual privacy matters.
• While executive sessions can be closed to homeowners, boards are required to declare the general topic and document it in official minutes.
• Boards are prohibited from voting on any new rules or regulations in closed sessions.

What it means for HOAs: Colorado HOA laws preserve homeowners’ rights to be present for and participate in the governance of their community. However, boards can meet in private regarding certain sensitive subjects.

This law designates what records HOAs are obligated to keep, which documents homeowners can access, and what information must be kept private.

• HOAs must retain documents concerning a range of rules and processes, including financial records, meeting minutes, voting records, reserve studies, and contracts, and homeowners may request access without stating a specific purpose.
• Boards may require these requests in writing and with up to 10 days’ notice.
• Records containing certain sensitive information, such as ongoing contract negotiations and attorney-client privileged communication, do not have to be made available to homeowners, and boards are prohibited from sharing the private personal information of association members.
• Boards can request only reasonable copying costs and may share records electronically when available.

What it means for HOAs: Documentation and transparency are not optional. Boards must allow homeowners to view certain records pertaining to the running of the community. Reliable HOA document storage makes it easy to maintain and share records.

This statute outlines the responsibilities of board members, particularly regarding the association’s financial health.

• With some exceptions, the board can act on behalf of the association.
• All board members must be provided the same access to information.
• Boards have fiduciary duties and must act in good faith and in the best interest of the community.
• Boards are responsible for reserve studies and reserve funding policies to maintain the community in the long term.
• Depending on the HOA’s size and financial activity, a group representing at least one-third of the community units can demand an independent financial audit.
• After adopting a proposed budget, the HOA must share it with homeowners and allow discussion at a membership meeting.
• Developers are required to turn over financial records and other important documents to the board upon transfer of community ownership.

What it means for HOAs: The law holds boards accountable for acting in the best interest of the association and following a formal budget process. Homeowners have the right to know how their dues are being spent.

These laws define how HOAs can conduct themselves in conflicts with homeowners and establish that boards are responsible for governing fairly.

• The HOA must consistently apply its written policies.
• Homeowners are entitled to receive notice of a potential fine, the opportunity to contest it, and the chance to fix the issue before the board imposes a fine.
• Homeowners are also entitled to a sufficient period of time to resolve a violation before the matter is escalated, other than urgent health and safety issues.
• Boards cannot impose recurring or excessive fines, and the collection of unpaid assessments must follow the established policy.
• Board members are obligated to disclose potential conflicts and to recuse themselves from matters in which they have a personal financial interest.
• HOAs must establish policies for conducting reserve studies and maintaining reserve funds to address long-term repair and replacement needs.

What it means for HOAs: Colorado HOA laws protect homeowners from being denied due process or from being given a reasonable period of time to resolve violations. HOA violation tracking tools help boards stay in compliance with their governing documents and state laws.

Homeowners who owe fees, fines, or assessments must be given a fair opportunity to repay their debt.

• HOAs must make a good-faith effort to offer payment plans to homeowners in collections. The owner sets the equal monthly payment amount, which must be at least $25, over a period of at least 18 months.
• If a homeowner fails to make a payment under a payment plan, the HOA is not required to provide another.
• Boards cannot initiate the foreclosure process as long as homeowners are making payments towards their plan.
• If payments are missed, boards have the right to take legal action.
• Homeowner payments must be applied to unpaid assessments before any fines or fees.
• Homeowners can take civil action if their HOA violates foreclosure regulations.

What it means for HOAs: By law, boards must work with homeowners who have outstanding balances. Homeowners cannot face foreclosure as long as they are complying with an agreed-upon payment plan.

Colorado HOA laws mandate how liens and foreclosures are issued on HOA properties.

• When assessments are late, they automatically become a lien on the property.
• With a few exceptions, HOAs cannot foreclose on the basis of fines, interest, attorney fees, or collection costs — only on unpaid assessments.
• Foreclosure can only be initiated once the unpaid balance equals at least six months of common-expense assessments, proper procedure is followed, and the board approves.
• A first mortgage generally takes priority over an HOA lien, but Colorado gives the HOA a limited “super-lien” — its lien sits ahead of the first mortgage up to the amount of the six months of common-expense assessments due before enforcement.
• Payments must be applied to unpaid assessments before any other fines or fees.
• The property continues to carry the lien if the delinquency is not resolved.

What it means for HOAs: Homeowners cannot be foreclosed upon without a specific set of circumstances being met and the required processes completed. Boards can track assessments and fines and automate reminders with HOA financial tools.

HOAs are limited in what they can prohibit in their community.

• Associations cannot prevent homeowners from displaying flags or certain political and religious displays based on their content.
• They can, however, enforce reasonable regulations on size, placement, and safety issues.
• Boards do not have the authority to ban solar energy systems, though they can impose reasonable limits.
• Associations cannot prohibit drought-friendly landscaping choices or fire-hardened building materials permitted by Colorado state law.
• HOAs cannot prevent licensed child-care facilities from operating in the community.
• HOAs cannot interfere with affordable housing and occupancy arrangements protected by state law.

What it means for HOAs: Homeowners have the right to fly flags, display religious items, use solar energy, and make other decisions about their property without fear of HOA punishment. Boards may employ content-neutral rules governing safety, placement, and size.

Rather than an HOA-specific law, this is a general consumer disclosure law that dictates what information must be disclosed when a residential property changes hands.

• Potential buyers must be informed that the property is subject to an HOA and alerted to any outstanding assessments or liens.
• They must also be made aware of any HOA rules regarding obtaining approval for exterior changes or improvements.
• Sellers must provide buyers with HOA governing documents and financial records upon request.
• Sellers are responsible for disclosing this information and may be held liable if withholding it causes harm to the buyer.

What it means for HOAs: Homeowners who choose to sell their HOA properties must disclose any HOA membership requirements, unpaid fees and liens, or restrictions on renovations to buyers.

Mandatory DORA registration helps the state track HOA activity.

• Most Colorado HOAs must register and renew annually with the Colorado Division of Real Estate (DORA).
• An HOA that fails to register can be prevented from enforcing liens.
• HOAs must report certain operational data, and the DORA database is publicly searchable.
• DORA does not mediate disputes or regulate HOA conduct.

What it means for HOAs: Homeowners can consult the searchable DORA database to ensure their board complies with registration requirements. Board members are obligated to register and renew membership annually, using HOA bookkeeping service tools to collect the operational data DORA asks for.

This statute (Title 7, Article 128) covers the fiduciary duties and legal standards that directors of nonprofit corporations, which include most HOAs, must meet.

• HOA board members must act in good faith and in the best interest of the organization.
• Boards are obligated to consult experts, such as attorneys and engineers, whenever necessary.
• Board members are protected from personal liability when they’re acting in good faith, exercising reasonable care, and reasonably relying on expert information.

What it means for HOAs: By agreeing to serve on the board, directors agree to act in the HOA’s best interest and take reasonable care in making decisions. By following these guidelines, board members are protected from personal liability for HOA issues.