HB25-1043 becomes effective on October 1, 2025.
The Bill will impact how homeowner associations conduct lien foreclosures to collect unpaid assessments. Below is a summary of the changes to the process and new requirements.
- Presently, prior to commencing foreclosure, associations are required to send unit owners a 30-day Notice of Intent to Foreclose (“Notice”), in written and electronic form, that includes a right to seek mediation. The new law will also require that the Notice inform the unit owner of their right to seek credit counseling. The Notice must be sent by certified mail and two other means of delivery (phone, text, email, or regular mail if the unit owner has not provided a phone number and/or email).
- Not later than five business days after the association initiates legal action to foreclose, the association shall send written and electronic notice to each lienholder identified in the unit owner’s property records, of the right to cure the nonpayment as well as the right of the unit owner to file a motion to stay (postpone) the sale of the property.
- At any time after the association files a foreclosure action, but prior to the sale, the unit owner may file a motion to stay the sale of the unit. The purpose of the stay is to permit the unit owner the time necessary to list and sell the unit. If the court approves, the stay is effective for nine months. The court may extend the stay for good cause.
- As a condition to foreclosure of the association’s lien, the association shall strictly comply with any applicable lien or foreclosure provisions of CCIOA as well as applicable lien of foreclosure provisions of the association’s declaration, bylaws, articles, and rules and regulations.
It should be noted, Notices of Intent to Foreclose are typically sent by the association’s legal representative, and not directly from the association, after consultation and a formal vote by the board of directors approving the foreclosure action.
Questions about HB25-1043 should be directed to the association’s legal counsel. In some cases, associations may be advised to seek appropriate legal action prior to the Bill’s effective date.