Colorado HOA Laws: A Comprehensive Guide

Homeowners' associations are designed to maintain the aesthetic standards of a community and enhance property values. As an HOA board member, executive, or manager, it's important for you to ensure that you have a comprehensive understanding of the applicable laws, rules, and regulations that determine the rights and responsibilities of this kind of organization.

In this guide, we will discuss Colorado HOA laws to ensure that you are equipped with all the information you need. Let's get started!

Homeowners' Association Basics

Before we get to the heart of the matter, let's first spend some time talking about what a homeowners' association (HOA) is.

Also known as a property owners' or community association, an HOA is designed to maintain common areas in a neighborhood, condominium, or apartment complex. It also enforces certain rules and regulations to ensure that the neighborhood's aesthetic standards are maintained.

One of the primary objectives of a homeowners' association is to safeguard and enhance the value of properties in the community. The HOA can help to prevent problems that may have a negative influence on property values by implementing bylaws and taking care of common areas.

These associations often have architectural review committees that can approve or disapprove of renovations or additions to properties in the community. This ensures that home improvements are in line with the community's standards. 

HOA Governing Documents

Homeowners' associations have a set of rules and regulations, called the governing documents, that regulate the operation and management of the organization.

The Bylaws, Declaration of Covenants, Conditions, and Restrictions (CC&Rs), and Articles of Incorporation are common examples of an HOA's governing documents. They specify how the housing association operates, the rules that homeowners are required to follow, and the legal structure of the organization.

In Colorado, the governing documents of a common interest community are not open to the general public. The state allows the association to determine whether non-members can read or examine its governing documents. Potential buyers of a home located in an area that is managed by an HOA in Colorado may be able to receive the governing documents via their real estate agent.

An Overview of Colorado HOA Laws

In the section below, we will explore some of the laws that apply to homeowners' associations.

The Colorado Common Interest Ownership Act

The Colorado Common Interest Ownership Act (CCIOA) governs HOAs, also referred to as common interest communities, in Colorado. This law establishes the legal rights that homeowners have, in addition to the rights of the organization. It also outlines an association's obligation as specified by its executive board of directors.

It authorizes civil litigation to enforce their rights and responsibilities. However, it's important to note here that the state lacks the capacity to interfere in any dispute between the members of the association. It also does not have the jurisdiction to enforce the rights and duties outlined in the act. 

To put it simply, there is no regulatory monitoring of homeowner's associations or their managers in Colorado. Any disagreement between residents or between members and an HOA is classified as a civil case.

The Colorado Judicial Branch's Office of Dispute Resolution provides low-cost access to competent mediators and has numerous specialists who deal with the concerns of common interest communities.

The Colorado Nonprofit Corporation Act

In terms of organizational structure and processes, this law regulates nonprofit organizations. This act governs an association that has been established as a nonprofit. To determine an association's corporate status, you can go to the Colorado Secretary of State's website.

The Colorado Fair Housing Act

This act is designed to prohibit the discrimination of any member of an HOA based on their race, color, religion, disability, familial status, sexual orientation, national origin, marital status, or creed.

The Colorado Fair Debt Practices Act

Because a homeowners' association can sometimes be considered a debt collector, it is governed by a legislature designed to protect homeowners from unfair treatment. Debt collection is governed at state level.

State legislation controls debt collection practices and encompasses measures comparable to the federal Fair Debt Collection Practices Act (FDCPA). It forbids debt collectors from engaging in behavior that can be considered deceptive, unfair, or abusive.

It's important to remember that a unit owner can take legal action or file an official complaint with the Colorado Attorney General or the Consumer Financial Protection Bureau.

Colorado Common Interest Ownership Act

This act oversees the establishment, administration, authority, and functioning of all Colorado HOAs, regardless of when they were formed. Some provisions, however, apply exclusively to communities formed after the first of July 1992.

New Bills That Were Passed That Affect HOAs

Next, we'll take a quick look at some of the recent legislatures that were passed that could affect homeowners' associations in Colorado.

• House Bill 22-1137. One of the most significant laws passed during the current legislative session alters Colorado Revised Statute 38-33.3-209.5 to modify how a common interest community is permitted to collect fees. The bill establishes specific notification requirements and procedures for issuing certain fines and proceedings to compel the homeowner to pay delinquent debts.
• House Bill 22-1139. This bill changes Colorado Revised Statutes 38-33.3-106.5. It prohibits any property owners' association from limiting the use of a public right-of-way that is lawfully and legally permitted. As a result, an association is not allowed to place such limits on the usage of public rights-of-way.
• Senate Bill 22-059. The purpose of this bill is to modify the existing text of Colorado Revised Statute 38-33.3-310, which permits a property owner in an HOA to nominate a proxy to vote on their behalf.
• HB 22-1040. According to Colorado Revised Statute 38-33.3-302, HOAs have the authority to "regulate the use, maintenance, repair, replacement, and modification of common elements." The new bill explains that such regulations must be in accordance with a new provision in Colo. Rev. Stat. 38-33.3-302.5, which states that an HOA must protect unit owners' ability to make full use of and enjoy the shared areas and amenities under its control. Under this law, it is not permitted to restrict the access or enjoyment of such facilities.

The Rights and Responsibilities

If you're feeling a little overwhelmed by these laws, don't worry! We have listed the rights and responsibilities that HOAs in Colorado have in the section below to make it easier for you to understand.

Rights

Colorado HOAs have certain rights:

The Right to Create and Enforce Its Own Governing Documents

Homeowners' associations have the right to set their own rules and regulations and enforce them. These bylaws must be clearly defined in the organization's governing documents.

Collect Dues and Assessments

To complete the necessary maintenance in common areas, homeowners' associations have the right to collect dues and assessments.

Access and Control Common Spaces

Because these organizations exist primarily to provide the necessary maintenance in shared spaces, they have the right to access and conduct the upkeep required in these areas.

Responsibilities

Now that you understand the rights that common interest communities have let's take a look at their responsibilities.

Transparent and Fair Practices

Homeowners' associations are required to govern their neighborhoods with transparency, ensuring that each member is treated fairly and not discriminated against.

Maintaining Records

HOAs in Colorado are responsible for maintaining records pursuant to Section 38-33.3-317(1)(c) of the Colorado Common Interest Ownership Act, which states that the minutes of all meetings held with members and board members must be retained as permanent records.

Enforcing Bylaws

They must enforce the rules and regulations fairly and consistently, addressing violations and disputes among homeowners.

Responsible Financial Management

HOAs oversee finances that are used in the maintenance of shared spaces, so responsible management of these funds is essential. They must ensure that budgets are created and that dues are collected and utilized responsibly.

Comply with the Relevant Laws

Finally, common interest community associations have a responsibility to comply with federal and state laws and regulations. They will need to take the relevant steps to ensure that they meet certain legal obligations, such as hosting annual meetings and maintaining proper records of these meetings.

Maintain and Care for Common Areas

HOAs are responsible for the maintenance of common areas and amenities for the benefit of the community and are required to execute these functions responsibly.

Fines for Violations and Late Fees

Colorado property owners' associations can levy fines on a unit owner for unpaid assessments and for the violation of its bylaws. However, before a fine may be levied, the member must be properly notified and provided an opportunity to be heard.

HOAs in Colorado May Not Levy Fines for Certain Reasons

According to state and federal law, a common interest community cannot punish a property owner or ban the following: 

• Using religious images on the front door or on the frame of the door
• The installation of flagpoles
• Failing to water plants or landscapes in accordance with regulating documents when local water-related entity restrictions are in effect
• Installing energy-saving devices
• Making modifications to a property as needed to accommodate a disabled individual
• Taking down bushes, trees, or other types of vegetation for the purpose of fire mitigation
• Showcasing a flag with no commercial messaging on the property
• Putting in charge facilities for electric vehicles
• Utilizing a rain barrel to gather rainwater on the property's roof
• Setting up antennas and satellite dishes
• Running a family daycare center

Keep in mind that an association's governing documents may incorporate fair restrictions and regulations regarding the placement, approach, and layout of any of the objects mentioned above.

How Do HOAs in Colorado Deal with Unpaid Assessments?

Community associations in Colorado can foreclose on an individual's property after offering him or her all the required steps and options for paying a lien resulting from the non-payment of dues.

The association must first deliver a notice of deficiency to the unit owner before commencing the legal process. Rather than enforcing daily penalties, the homeowner's association must provide the owner with two 30-day grace periods to pay the overdue amount. 

Furthermore, the HOA is required to provide the property owner with a payment plan comprising monthly payments of $25 or more. If the owner of the property accepts the offer but fails to make three or more payments on time, the HOA has the right to file a claim for the outstanding amount in small claims court.

When common assessments go unpaid, an HOA has the authority to evict unit owners and tenants. This procedure is very similar to putting a lien on a piece of property for unpaid fees, which can eventually lead to foreclosure.

How to Join and Leave a Colorado HOA

There are two types of common interest communities in Colorado: mandatory and voluntary HOAs. When moving to an area where there is a mandatory HOA, unit owners automatically become members when they move to the neighborhood.

They may only leave by selling their home or requesting to have their home removed from the association's jurisdiction. If the property is located in an area that is run by an HOA that allows voluntary membership, homeowners can join and leave at their own discretion.

Dissolving a Common Interest Community in Colorado

The process for dissolving a common interest community in Colorado can be found in the organization's governing documents. Suppose there are no details about dissolution in the governing documents. In that case, members must vote in favor of dissolving the HOA. If a majority vote of at least 67 percent is obtained, then the association may be dissolved. 

To dissolve an HOA in Colorado, board members will need to file a termination agreement with the relevant county. Once filed with the county the association is located in, the HOA is declared dissolved.

Complaints

The truth is that homeowners in Colorado can take a number of approaches to complain about unfair practices and discrimination by a homeowners' association. They can also choose to file a lawsuit against the HOA at a state or federal court.

Fees

Unit owners can approach the following organizations to file a complaint about the fees or fines an HOA imposes in Colorado:

• Consumer Financial Protection Bureau
• Colorado Department of Regulatory Agencies
• Federal Trade Commission

Discrimination

Here are some of the agencies homeowners can approach for complaints about discrimination:

• US Department of Urban Housing
• Colorado Department of Regulatory Agencies

Knowing how to deal with complaints is an important part of running a successful property owners' association. We have a comprehensive guide on how to handle complaints, which you can find here.

About DoorLoop's HOA Tools

The truth is that managing common interest communities created to maintain shared spaces and enhance property values is no easy task. There are a myriad of tasks that must be completed, and keeping track of it all can sometimes be a challenge.

What's more, ensuring that your HOA complies with Colorado law can be difficult, especially if you have no legal background. The good news is that you can use DoorLoop to streamline your day-to-day operations and ensure that your HOA remains compliant with the applicable laws.

DoorLoop is designed to be easy to use, and with a powerful set of features, you can easily find and utilize the tools you need. It allows you to conveniently store your most important HOA documents in one convenient place and lets you create and track work orders.

What's more, you can communicate with vendors, staff members, and homeowners using the innovative portal. It also allows you to accept and track assessments with ease and even has accounting features to help you manage the books!

The best part is that you can try it out risk-free by scheduling a free demo. Contact us today to learn more or try it out!

The Bottom Line

It's important for HOA board members, executives, and managers to stay on top of things. With a comprehensive understanding of the applicable Colorado HOA laws, rules, and regulations, you're well on your way to fulfilling your role in the organization and ensuring that the HOA remains compliant.

If you require assistance streamlining your operations, schedule a free demo today to see what DoorLoop can do for you!

Frequently Asked Questions

1. What does an HOA in Colorado have the authority to do?

A common interest community in Colorado has the authority to control and maintain shared spaces, such as clubhouses, swimming pools, and parks. It may also collect fees for the upkeep and operation of shared areas and impose reasonable fines for the violation of its rules and regulations or the late payment of dues. 

Furthermore, its governing documents can offer additional authority, such as limits on the type of fencing that can be used, exterior paint colors, membership criteria, and rules pertaining to parking.

2. Are HOAs permitted to enter a home?

While there are no provisions in the state's legislation that authorize a common interest community association to enter a homeowner's private property, most governing documents include a provision that allows an HOA to enter a property as needed for maintenance purposes.

Unless in the event of an emergency, the association must notify unit owners before entering the property for any reason. Usually, an HOA will provide at least one to two weeks' notice, although the governing documents will specify the requirements. 

3. Can common interest communities foreclose on a home in Colorado?

Yes. In Colorado, homeowners' associations do have the right to foreclose a home to collect unpaid assessments. However, HOAs are required to follow the necessary steps and ensure that they have provided the unit owner with certain options before their home may be foreclosed.

4. Is it mandatory for homeowners to join homeowners' associations in Colorado?

There are voluntary and mandatory common-interest communities in Colorado. If an individual moves to an area where joining the HOA is not optional, he or she is obligated to join. The HOA governing documents will specify whether joining an association is mandatory or not.

5. What can property management software do for an HOA?

Property management software provides various benefits to homeowners associations. It streamlines the collection of assessments and dues and allows these organizations to track their spending efficiently by automating financial operations.

Document management and storage are also important features that can help HOAs remain compliant with state laws. Tools for better communication can help homeowners, board members, and management share information more effectively.

Property management software also promotes maintenance tracking, as it makes it easier to manage service orders for common areas or individual units. Plus, the analytical and reporting features provide insights that can help to improve decision-making.

Automation software promotes openness, enhances security, and may allow for online voting on critical issues, thereby improving overall community management practices. With DoorLoop, you get all of these features and so much more! Get in touch with us today to schedule your free demo.