Denver, CO

Denver requires HOAs to offer help during foreclosures

David Heitz

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By David Heitz / NewsBreak Denver

(Denver, Colo.) When a constituent reached out to City Council President Stacie Gilmore with her foreclosure nightmare, Gilmore learned just how powerful homeowners associations can be.

The Green Valley Ranch resident teetered on foreclosure without warning over unpaid fines. She didn’t know what to do.

The Public Safety, Housing, Education and Homelessness Committee approved new regulations Wednesday regarding foreclosures. Homeowners associations are foreclosing on property owners in record numbers.

In Green Valley Ranch, there have been more than 50 foreclosures in the past year. “I have heard so many heartbreaking stories from our residents,” Gilmore said.

The foreclosures often stem from non-payment of fines for things such as ripped screen doors, oil stains on the driveway and unauthorized basketball hoops.

There are no requirements for HOAs to communicate with property owners before starting foreclosure action. They don’t provide legal or housing resources either.

Denver brings transparency to HOAs

Denver’s new regulations, if approved by the full council June 20, will require homeowners associations to:

· Provide at least 30 days’ written notice of property owners’ rights during a foreclosure. The information must be on a form approved by the city.

· Provide a list of legal and housing resources for homeowners facing foreclosure.

· Keep records of when homeowners received notice of foreclosure.

During a public hearing Wednesday, Green Valley Ranch resident Vicki Wilhite said she was “appalled” when she found out how much power homeowners associations have. “I thought they were put in place to protect a community, not harm it.”

Gilmore asks for HOA probe

Gilmore asked Gov. Polis and Attorney General Phil Weiser to probe the Green Valley Ranch Homeowners Association for questionable practices. She also wants a moratorium on foreclosures until the investigation is complete.

“Green Valley Ranch is a majority community of color, and currently, the neighborhood has 50 homes in the foreclosure process,” according to a statement by Gilmore and the City Council office. “Britta Fisher, director of the Department of Housing Stability, and the Office of Financial Empowerment and Protection have been investigating the extent of this issue and providing homeowners connections to resources. However, this problem demands urgency and more assistance from the state to mitigate residents becoming homeless.”

State also cracks down on HOAs

The state also adopted new laws regarding HOAs earlier this month. With the passage of HB 22-1137, HOAs will be required to:

· Provide monthly itemized accounting to anyone who is in arrears on assessments or fines.

· Provide a notice of delinquency for unit owners who are behind on their assessments. The notice must include a description of outstanding amounts and must outline the legal action the HOA can take.

· Provide the option of a payment plan prior to initiating a foreclosure. The law prohibits the HOA from foreclosing because of outstanding fines It may only foreclose for outstanding assessment if the owner misses at least three payments and declines a payment plan.

· Prohibits late fees, fines and interest that exceeds $50 per day or $500 total.

· Prohibits an HOA from charging interest on assessments, fees and fines exceeding 8 percent per year.

· Requires HOA to provide information about one or more foreclosure counseling services available in the county.

Committee praises Gilmore for hard work

Members of the public safety committee praised Gilmore for the legislation. “This is a really creative way to create a real piece of information for people to know their rights,” councilmember Robin Kniech said. “I wish we could just legislate away that homeowners associations have the right to hold liens on certain properties.”

Sawyer agreed. “This is a really, really meaningful piece of legislation.”

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I've been in the news business 35 years, spending much of my career at local newspapers. Today, I report on Denver and Aurora city halls for NewsBreak. Prior to joining NewsBreak, I worked several years as a health reporter and branded content writer in the healthcare space. I also worked many years as a news editor and city editor. I consider myself a lucky guy to live in a great place like Denver.

Denver, CO
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