A bill to add more protections for Denver homeowners before a homeowner association can initiate foreclosure proceedings got the initial OK to move forward to the city council, the latest policy change spurred by the HOA actions at Green Valley Ranch.
Council President Stacie Gilmore introduced the proposed policy changes to the city’s Safety, Housing, Education & Homelessness Committee on Wednesday, asking for the members’ support on the added protections meant to expand on a bill passed by the Colorado Legislature this year.
“We modeled this draft bill after the requirement in the residential rental licensure program to provide tenants with their rights and resources, doing the same by requiring HOAs to provide written notice of owner’s rights and a listing of legal and housing resources at least 30 days prior to initiating any foreclosure action,” Gilmore said at the meeting.
She hopes the bill will help prevent families “from falling through the cracks and losing their home” that HB22-1137 — which hasn’t been signed into law yet — doesn’t prevent.
“Prior to the passage of House Bill 1137, the city didn’t have an avenue to provide oversight in how HOAs manage their operations,” Gilmore said. “Because of this, we are seeing homeowners lose their homes to menial things that can easily be fixed with proper communication and follow up such as ripped screens, driveway oil stains and trash cans left out too long.”
The House bill would require HOAs to provide monthly itemized accounting and a link of notice of delinquency to owners who are behind on assessments, provide an option for the owners to enter into a payment plan, prevent HOAs from imposing late fees, fines and interests, caps the amount of a fine for violations at $500, prohibits HOAs from charging interest rates more than 8% per year and requires HOAs to implement policies that provide homeowners with information about foreclosure counseling services.
Gilmore’s proposal would require HOAs in the city to provide written notice of owners’ rights and resources on a form approved by the city at least 30 days before initiating foreclosure action for any reason and the notice has to contain a listing of legal and housing resources for homeowners facing foreclosure. The HOA will be required to maintain a record of the notice sent, including the date and time the notice was sent.
If approved by the City Council in June, this would go into effect at the end of August.
Rep. Naquetta Ricks, an Aurora Democrat and one of the people spearheading the state’s legislative efforts, told The Denver Post that lawmakers didn’t get everything they wanted in the bill this year and that HOAs still have a lot of power that she hopes to balance more with tenants’ rights in future legislation.
One of the provisions taken out of the bill before it passed was a cap on attorney fees that could be charged to residents amid HOA foreclosure action, which become “exorbitant,” Ricks said, and the fees that rack up are often one of the reasons homeowners lose their houses.
But the bill put other measures in place like requiring that homeowners receive three notices about fines and fees, with monthly notices for any delinquency. The bill also prevents HOAs from taking owners to court over missing a payment for more than 15 days one time, only allowing them to take such action about three missed or late payments. And it stops HOAs from pursuing foreclosure based on fines for covenant violations (though HOAs can still put a lien on a property and they can also foreclose for missed homeowner association dues owed by every homeowner).
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Ricks applauded Denver for pursuing efforts to go even further than the state with protections for homeowners.
Vickie Wilhite, a Together Colorado board member and a leader of the social justice ministry at Shorter AME Church, told the committee on Wednesday that she’s lived in Green Valley Ranch for 24 years and she was appalled at the power HOAs held.
“I thought that they were put in place to protect the community and not to harm it,” Wilhite said. “So I ask, how is it that a homeowner’s association has the power to decide who can be unhoused? See, it’s not just properties, it’s our homes. It’s the place where we lay our heads, hug our loved ones that make our memories.”
Wilhite called the protections afforded by the state bill “toothless,” adding, “It seems predatory for an HOA to have possessory liens over someone’s home.”