House Bill 25-1043 to be effective October 1, 2025 – some highlights:

By David Graf

Yes, as many of you have heard, another collections law passed through the legislature and was signed into law by the governor. House Bill 25-1043 becomes effective on October 1, 2025. There are a few things you need to know. We’ll go into each issue separately, but here are the highlights:

All communities subject to CCIOA (the Colorado Common Interest Ownership Act) will need a revised collection policy. There will come a time when the statutes are so detailed on collection processes that we won’t need to spend association money writing a new policy every year or two. I think we’re about there now. Our office instituted a “Compliance Assurance Service” program last year that, for less than half of the cost of a collection policy, committed our firm to make any required collection policy changes through the end of 2026 at no additional cost. This was our small part to reduce the “policy fatigue” that boards are understandably feeling. Make no mistake—we believe that a reasonable and published collection policy is a part of good governance. But good governance also means keeping an association maintained and solvent, which is becoming more difficult with each passing year. If or when a reserve study and funding bill similar to the one that passed through the legislature in 2022 only to be (wisely) vetoed by the governor, comes back, the funding pressure on hundreds of communities will be enormous. And associations won’t be ready. Associations don’t have governmental immunity. It is not a crime to not pay your assessments like it is to fail to pay your taxes. And most crucially, associations cannot operate at a deficit for years on end.

Strict compliance with all foreclosure and lien laws is required to recover legal fees and costs. “Strict compliance” with foreclosure laws appears to make practical sense. After all, foreclosures are, and should remain, an option of last resort when trying to get an owner to pay. So, who would argue against it? Ahhh…what does it mean in reality? It means that every collection process has to be followed perfectly even if there is no materiality to any derivation. Even if the potentially minor deviation was for the benefit of the delinquent owner! It prevents a judge from deciding that the process was fair and reasonable. It is legislative hubris to take away the discretion of a judge to decide what is proper and what is not. Does anyone in the legislature believe that there is a single judge in Colorado who would be predisposed to favoring an association over an individual? Doesn’t happen. The reason our legal system works as well as it does is because of the human element. Experience and reason. Following the law but never losing sight of what is equitable. Our government has a bad history of trying to legislate fairness in every circumstance and squeezing out any human discretion in the solving of human problems. Strict compliance does that, but because it will always inure to the benefit of the owner, this is a problem that the legislature is willing to ignore. People aren’t robots and laws should not be reduced to computer code.