Representative Kit Roupe (R-Colorado Springs) introduced HB 15-1113 has introduced the first truly HOA friendly bill of the session. The bill establishes financial protection for homeowners’ associations from protracted foreclosure matters. Currently, the Colorado Common Interest Ownership Act provides associations with protection for 6 months’ worth of common expense assessments in the event of a foreclosure action. Given the back log of foreclosures being completed by banks, in many cases these foreclosures would be rescheduled or postponed by the lender for up to a year. This fact has devastating financial impacts on associations as the unit would be in a sort of “limbo” with nobody paying assessments.
HB 15-1113 resolves this problem by amending CRS 38-33.3-315 to require the lender, with limited exceptions, to pay assessments from the date the foreclosure sale was originally scheduled to occur and the date the foreclosure sale actually occurs. This bill, if passed covers the gap between the 6 month super lien and the date the foreclosure actually occurs. The bill also covers situations in which a lender withdraws the foreclosure, and then refiles at a later date.
Exceptions to the requirement that the persons or entity foreclosing on the evidence of debt include situations in which the foreclosure sale was continued as a result of (i) the lender being required to correct errors in the published combined notice; (ii) the sale is continued as a result of negotiation to complete a short sale; or (iii) if the foreclosure action is withdrawn and not refiled.
This bill would be very advantageous for common interest communities, however, as the bill was introduced without a cosponsor in the House and no sponsor in the Senate its future is uncertain. Additionally, I would expect this bill to face serious opposition from the lending and banking community and may make acquiring loans in common interest communities even more difficult to obtain. It will be interesting to see if the promise of assessments garners support in the legislature.