Introduced and Pending Legislation Affecting Common Interest Communities: What to Watch in 2026

Colorado lawmakers are continuing to focus on the financial stability and governance of community associations. The most significant proposal so far during 2026 legislative session centers on long-term financial planning for new communities and stronger accountability for management companies.

Reserve Studies and Financial Planning for New Communities

The most closely watched proposal is Colorado General Assembly House Bill 26-1099, which is currently under consideration.

If passed, the bill would require developers of new planned communities and condominiums to obtain an independent professional reserve study in conjunction with the transition from declarant to homeowner control. The reserve study must project maintenance and replacement costs for association-maintained property over a 30-year period.

The objective is to ensure that new communities begin with realistic financial plans and project future funding necessary to cover capital repairs and replacement.

New Rules for Community Association Management Company Transitions

The bill would also establish stricter requirements when associations change management companies. Outgoing managers would have to transfer all association records, funds, and property within 45 days — or face financial penalties and possible legal liability.

These provisions are intended to prevent delays and disputes that can disrupt association operations.

Why This Matters

Currently, Colorado law requires most associations to adopt reserve funding policies but does not mandate professional reserve studies statewide.

If enacted, HB 26-1099 would represent a significant shift toward stronger financial planning requirements — especially for newly created communities.

The Bottom Line

Colorado’s 2026 legislative session reflects a continued push toward greater oversight, transparency, and financial preparedness in associations governance. While the proposed changes are still under review, they could significantly affect developers, boards, and homeowners across the state if adopted.

For anyone living in or working with community associations, this is one legislative development worth watching closely.

Summary of Additional Notable Proposed Legislation

SB26-049: Risk Model Use in Property Insurance Policies expands state support for disaster-risk reduction by allowing homeowners and community associations to receive funding for property-specific mitigation measures, such as impact-resistant roofing and similar protective upgrades. It also creates tax-advantaged catastrophe savings accounts that homeowners can use to cover disaster-related insurance deductibles, uninsured losses, and mitigation costs.

The bill aims to reduce property insurance risk and costs by encouraging mitigation and helping homeowners financially prepare for catastrophic events.

HB26-1007: Improve Customer Use Distributed Energy Resources is a proposed measure aimed at making it easier for utility customers (i.e., homeowners) to use and benefit from distributed energy resources—including small portable solar panels, battery storage, and similar local energy technologies.

In brief, it would:

• Direct regulators (including the Colorado Public Utilities Commission) to update rules and programs that support customer-owned or community-based energy systems.
• Improve how utilities plan for, connect, and compensate distributed energy resources.
• Expand opportunities for customers to participate in grid services (such as selling excess power or supporting reliability).
• Limit the ability of community associations to enforce restrictions on small portable solar devices.

The overall goal of the measure is to remove barriers and modernize policies so more customers can generate, store, and manage their own energy while supporting the electric grid. With that said, the bill is somewhat shortsighted, in that it limits the ability of associations to adopt and enforce bona-fide safety requirements, such as requiring portable solar panels to be safely installed and restricting placement in areas that are likely to create a safety hazard (i.e., solar panels affixed to upper level balcony railing that may endanger units or residents below).

Follow our Legislative Tracker to stay informed about the progress of all legislative developments for common interest communities in Colorado.