HB 22-1137

On June 3rd, Governor Polis signed Colorado House Bill 22-1137.  After months of opposition and support from homeowners and other stakeholders, the new law will become effective August 10, 2022.

As a result of the new law, associations will need to:

• Evaluate and make changes to procedures for assessment collection and covenant enforcement
• Update/amend existing governance policies
• Implement changes to governance policies
• Budget for increased operating, management, and legal expenses
• Discuss changes with management and develop compliance strategies
• Educate board members about changes to CCIOA

At a minimum, associations will need to substantially revise collection and covenant enforcement policies to comply with new (additional) requirements.  Changes may also be required to the conduct of meetings policy if it contains detailed information about the purpose of executive sessions.  Other association rules, regulations, and policies containing fines or fine schedules must be updated to comply with limits on fines for covenant and rule violations.

In addition to the above changes, homeowners, board members, and managers should anticipate increased costs as a result of HB 22-1137.  For example, associations should expect substantially increased costs for sending delinquency notices via certified mail and the requirement to physically post notices at the property.  There will also be additional expenses associated with monitoring and enforcing long-term payment plans (18 months or more).

Last but not least, communities will need to evaluate and re-assess effective strategies to incentivize voluntary compliance with governing documents in light of new limitations on the ability of associations to effectively and practically enforce covenants and rules.  To read the full text of the signed act, click here.

If our attorneys can assist you with amending your community’s current governance policies in preparation of HB 22-1137’s effective date, please let us know.