Back in 2013, HB-1276 was adopted in the Colorado legislature, which required an overhaul of Collection Policies and pre-collection procedures. That change took effect on January 1, 2014. Now that it’s been 7 years and several new laws that impact Associations later, it’s easy to lose track of the details. We’ve seen a trend of Associations changing their procedures and payment plan offer letters in ways that are violating the law. In order to proceed with collections, the Association must have followed the requirements of HB-1276, and if an Association hasn’t followed the rules, we have to send the matter back to the Association to resend their letter, which delays the process by at least 30 days.

Before a homeowner is sent to an attorney or collection agency for collections, the Association is required to send a letter to the homeowner. Here is the required information along with the most common issues we see:

  • Information Requirement 1: The total amount due, with an accounting of how the total was determined;
    • Common Issue: Some letters list only the balance, without any type of breakdown.
    • Easy Fix: State in the letter that a ledger is attached, and also be sure to actually include the ledger with the letter.
  • Information Requirement 2: Whether the opportunity to enter into a payment plan exists under §38-33.3-316.3 and instructions for contacting the Association to enter into such a payment plan;
    • Common Issue: Some Associations misstate when a homeowner is eligible for a payment plan.
    • Easy Fix: Rather than try to accurately state and keep track of who is eligible for a payment plan and who is not, just offer the payment plan option to everyone.
  • Information Requirement 3: The name and contact information for the individual the unit owner may contact to request a copy of the unit owner’s ledger in order to verify the amount of the debt;
    • Common Issue: This information needs to list a human’s name, but many letters we see list “Billing Department” or “Accounts Receivable Technician” or “Association Manager.”
    • Easy Fix: Be sure to list a human’s name and contact information.
  • Information Requirement 4: That action is required to cure the delinquency and that failure to do so within thirty days may result in the unit owner’s delinquent account being turned over to a collection agency, a lawsuit being filed against the owner, the filing and foreclosure of a lien against the unit owner’s property, or other remedies available under Colorado law.
    • Common Issue: The Association must give the homeowner 30 days to respond. Some letters offer 10 days, 14 days, or 20 days, but this is not compliant.
    • Easy Fix: Make sure your letter gives a 30-day response time.
  • Additional Note 1: All the requirements listed 1-4 above must be contained all within one letter.
    • Common Issue: We frequently see several letters that all combined have the information, but there needs to be one letter that contains all this information within that one letter.
  • Additional Note 2: The letter containing all the requirements listed 1-4 above must be sent by US mail.
    • Common Issue: If the letter is also sent by email, that is fine, but the letter cannot be sent only by email without a copy also sent by regular US mail.

If you have any questions or concerns about your payment plan offer letter and if it is compliant with Colorado law, please feel free to contact any of our Altitude attorneys at 303-432-9999 or [email protected].

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