HB25-1043 – Yet Another Potential Roadblock for Community Associations

Proposed HB25-1043 may further hinder associations’ ability to recover delinquent assessments.

In 2022 (HB22-1137) and again in 2024 (HB24-1337), the General Assembly passed legislation that limited an association’s ability to seek recovery of unpaid assessments. HB25-1043 is the latest effort to further curtail an association’s ability to pursue legal remedies to collect legitimate owner delinquencies. Below is a list of the relevant provisions:

• Associations will annually report to the Director of the Division of Real Estate the number of owners that were six or more calendar months delinquent in the payment of assessments; and, of such:
  • the number of unit owners the association obtained judgment against;
  • the number of payment plans entered into between the association and owner;
  • the number of foreclosure actions filed against unit owners.

• As a condition precedent to the recovery of money owed, the association shall strictly comply with CCIOA, other applicable laws, the declaration, bylaws, articles, and rules and regulations.

• At any time after the association files an action for foreclosure, but prior to the date of auction, the owner may file a motion with the court to stay (stop) the foreclosure and permit the owner to list the unit for fair market value. If the court agrees, the stay is effective for nine months and can be extended for good cause.

Your voice is important and may influence reform!

This Bill will create undo administrative burden on an association (and its management company). Additionally, the requirement to strictly comply with all laws and provisions of the association’s governing documents could easily set up a legal defense for the owner to avoid or delay enforcement action. Given the legal requirements added in 2022 and 2024 to ensure delinquent owners were notified of a debt, and the limitations placed on an association to pursue recovery, HB25-1043 goes beyond what is reasonable, effectively penalizing members that timely pay their assessments.

We urgently suggest that you contact your state house and senate representative and communicate your desire that they oppose HB25-1043.