Colorado HB 22-1137: What HOA Boards Need to Know About Governance and Reserves

Understanding Colorado HB 22-1137

Colorado passed House Bill 22-1137 in 2022, and it changed how homeowners associations handle fines, collections and member communication. The law took effect on August 10, 2022, and it applies to associations governed under the Colorado Common Interest Ownership Act, also known as CCIOA. If you serve on a board or manage a community in Colorado, this bill touches nearly every enforcement and collection action you take.

The headline change involves how associations treat delinquent accounts and how they impose fines. Those changes also affect cash flow, which is why they matter for reserve planning. Colorado has passed further HOA legislation since 2022, so treat this article as a guide to HB 22-1137 itself and check current law with your association's attorney.

The Core Changes to Fines and Enforcement

Before HB 22-1137, some associations fined members aggressively and added charges that compounded quickly. The law puts guardrails on that practice. Here is what changed.

Fine caps and notice requirements

An association can no longer fine a homeowner without written notice and a chance to correct the violation. The rules differ by the kind of violation:

• Most violations. The association must send written notice by certified mail, return receipt requested, giving the owner 30 days to cure. The association must then inspect before it fines. Total fines for the violation may not exceed $500. The owner gets two consecutive 30-day periods to cure before the association may take legal action.
• Violations that threaten public safety or health. The association must give written notice that the owner has 72 hours to cure. If an inspection shows the violation has not been cured in that time, the association may fine the owner every other day and may take legal action.

The law also bans late fees and fines charged on a daily basis. Some associations historically used escalating fines as a revenue source. That approach no longer works under Colorado law.

Communication in the owner's preferred language

An owner may tell the association that they prefer correspondence and notices in a language other than English. The association must then send notices in English and in that language. An owner may also name a designated contact, who receives the same correspondence. If the owner states no preference, notices go out in English.

Changes to Collections and Payment Plans

The collections section of the bill is where many boards feel the biggest operational shift. An association must offer a repayment plan before it can start a foreclosure over unpaid assessments.

• The repayment plan must let the owner repay the debt in monthly installments over 18 months. The owner chooses the monthly amount, as long as each payment is at least $25.
• An association cannot charge more than 8 percent per year in interest on unpaid assessments, fines or fees.
• A delinquent account can be referred to a collection agency or an attorney only by a majority vote of the executive board, recorded at a meeting, and only after the required notices.
• Foreclosure is restricted. An association cannot foreclose on a lien that consists only of fines, or of the collection costs and attorney fees tied to those fines. For unpaid assessments, it cannot start a foreclosure unless it has offered the repayment plan and the owner has either declined it or, after accepting, failed to pay at least three installments within 15 days of their due dates.

For boards, this means your delinquency process needs documentation at every step. Keep proof of each notice, inspection, offer and vote.

How This Connects to Reserve Studies

HB 22-1137 is not a reserve study law. Colorado does not mandate reserve studies for existing associations under CCIOA the way some states do. But the financial realities created by this bill make strong reserve planning more important, not less.

Fines are no longer a reliable income source

Some associations quietly relied on fine revenue to cover gaps in their budgets. That option is gone. With fines capped and collections slowed, associations have to fund operations and reserves through assessments. This pushes boards toward honest budgeting and realistic reserve contributions.

Slower collections affect cash flow

When homeowners can repay over 18 months at a capped interest rate, the association waits longer to collect delinquent assessments. A community with several delinquent accounts can feel real cash flow pressure. A well-funded reserve gives the association a cushion so a few slow-paying owners do not force an emergency special assessment.

Transparency expectations have grown

CCIOA already requires associations to make financial records available to members. HB 22-1137, which centers on fairness and notice, reinforces the need to show homeowners where their money goes. A current reserve study is one of the clearest ways to show that the board is planning responsibly for roofs, roads, siding and other major components.

CCIOA Reserve Requirements Colorado Boards Should Know

CCIOA does not require an existing association to have a reserve study or to fund reserves to a set level. It does require every association to adopt a written governance policy on reserve studies. That policy must say when a reserve study is prepared, whether there is a funding plan for the work the study recommends, and whether the study is based on a physical analysis and a financial analysis.

In practice, this means homeowners can ask what your reserve study policy says and whether the board is following it. A missing study and a thin reserve balance raise questions during resale and refinancing, because buyers and lenders often ask about reserves.

What boards should put in place

• A current reserve study. Update it on a regular cycle, with annual budget reviews in between, and follow your own written policy.
• A reserve study policy that matches practice. Make sure the policy CCIOA requires describes what the association really does.
• A documented collection policy. Align it with HB 22-1137 and any later law so your process survives legal scrutiny.
• Realistic assessment levels. Fund operations and reserves without depending on fines or penalty revenue.

Practical Steps for Compliance

Review your governing documents and policies against the current law. Many associations adopted fine and collection policies years ago that no longer comply. Work with your community association attorney to update your enforcement and collection procedures.

Then look at your budget. If you previously counted on fine income, rebuild your budget around assessments. Compare your reserve contributions against your most recent reserve study. If the study is more than a few years old, commission an update. The numbers in older studies rarely match current construction and material costs.

Finally, document everything. HB 22-1137 rewards associations that keep clean records of notices, cure periods, inspections, repayment plan offers and board votes.

The Bottom Line

HB 22-1137 reshaped how Colorado associations handle money coming in from homeowners. Fines are capped, collections are slower, and notice requirements are stricter. None of that changes the cost of replacing a roof or repaving a parking lot. It means your association has to plan for those costs through assessments and a funded reserve, not penalty revenue.

ReservePath helps Colorado associations keep their reserve studies current, track components over time, and build funding plans that stand up to member questions.

Frequently Asked Questions

When did Colorado HB 22-1137 take effect?

The law took effect on August 10, 2022. It applies to associations governed by the Colorado Common Interest Ownership Act (CCIOA).

What is the maximum HOA fine in Colorado under HB 22-1137?

For a violation that does not threaten public safety or health, total fines may not exceed $500, and the owner must first get written notice and 30 days to cure. For a violation that threatens public safety or health, the owner gets 72 hours to cure, after which the association may fine every other day.

How long is the repayment plan under HB 22-1137?

Eighteen months. The owner chooses the monthly amount, with a minimum of $25 per payment. The association must offer the plan in writing before it can start a foreclosure over unpaid assessments.

How much interest can a Colorado HOA charge on past-due assessments?

No more than 8 percent per year on unpaid assessments, fines or fees.

Can a Colorado HOA foreclose over unpaid fines?

No. An association cannot foreclose on a lien that consists only of fines or the collection costs tied to them. For unpaid assessments, it must first offer the repayment plan and send the required notices.

Does HB 22-1137 require a Colorado HOA to have a reserve study?

No. HB 22-1137 deals with fines and collections, not reserve studies. Separately, CCIOA requires associations to adopt a reserve study policy. Other Colorado laws can add reserve requirements, so check the current statute or your association's attorney.

Sources

• Colorado HB22-1137, Homeowners' Association Board Accountability and Transparency, bill page, Colorado General Assembly
• Colorado HB22-1137 signed act (full text), Colorado General Assembly
• Assessments and Budgeting presentation (reserve study policy under C.R.S. 38-33.3-209.5), Colorado HOA Information and Resource Center, Division of Real Estate