After tireless advocacy from homeowners and advocates, the governor signed HB24-1337 on June 5th, 2024. The main two things the bill does are cap the legal fees a homeowners association (HOA) can pass along to a homeowner, so that inflated legal fees don’t lead to someone losing their home, and offer homeowners a right to redemption after a foreclosure sale so they have priority in getting their house back over house flippers.

Redress began organizing around this issue after a wave of HOA foreclosures that swept up Redress neighbor Monica Villela. Ms. Villela and her family are still fighting to get their house back after they lost it in 2022, when her HOA foreclosed on the property and sold it to a house flipper, even though she was current on the mortgage. The foreclosure was over minor fines for dead tree branches and leaving trash cans on the curb for too long, which quickly ballooned into nearly $8,000 in legal fees. The HOA sold her house to a house flipper for a fraction of the value and because there was no redemption period, like the new law would create, he has been unwilling to sell it back to her. Redress previously detailed the predatory practices of HOAs like Green Valley Ranch, where Monica lived, in our policy brief on the topic. 

HOAs were popularized in the 1920s and helped standardize racially restrictive covenants in new suburban housing developments. After The Supreme Court struck down the enforcement of racially restrictive covenants, and again after the passage of the Fair Housing Act, HOAs became even more popular as white developers and homeowners looked to keep their neighborhoods exclusive without relying on explicit racial prohibitions.¹ HOA communities continue to be disproportionately more white and their discretion around enforcement of their rules may put homeowners of color at greater risk.²

HOAs continue to grow and roughly 60% of new single family homes are subject to one.³ Due to this growth, HOAs are widespread in Colorado and across the U.S.. Roughly 2.7M people lived in HOA homes in Colorado in 2023, about half the population of the state.⁴ Despite their growth, the majority of HOA residents across the country don’t like having an HOA.⁵

After news stories on the recent wave of HOA foreclosures in Colorado, the legislature passed its first reform bill in 2022 to limit HOA-driven foreclosures to those due to unpaid assessments and cap the amount of interest that can be accrued on assessment fees. Still, HOAs wield immense power over homeowners that can lead to insurmountable debt and foreclosure. 

HB24-1337 was initially designed to subordinate the HOA’s lien to the bank’s lien, meaning that if an HOA forecloses, they would have to assume the bank mortgage and sell the home for the full value, not a fraction of its costs, as was the case for Ms. Villela. Only 20 states allow for an HOA’s lien to have priority–called a superlien–but the Colorado HOA lobby fought this provision anyway.⁶ Instead, the bill passed with a right of redemption, allowing the homeowner 180 days to repurchase their home after a foreclosure sale. The structure of the right of redemption language in this bill prioritizes keeping people in their communities and protecting community wealth by allowing family members of the original homeowner, as well as mission-driven nonprofits and community land trusts, to also have priority before investors and house flippers.

A companion bill, HB24-1267, also passed this session and removes the ability of Metro Districts to foreclose on homeowners. Metro Districts, which often perform similar functions to HOAs, are special taxing authorities established to finance the construction of subdivision infrastructure. These new laws don’t address condominium owner associations (COAs), but a recent Shelterforce article points out that COAs may require similar checks on their foreclosure authority as well. 

These were important wins in Colorado and advocates in other states should examine how much power HOAs and COAs have in their states too. 

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Endnotes:

¹Malik Jackson, Bo McMillan, and Reggie Jackson, Homeowners Associations: Policy Research Brief, The Redress Movement, February 2023, https://redressmovement.org/wp-content/uploads/2023/03/HOA-Brief-FINAL.pdf.

²Abby Boshart, “How HOAs Can Shape Neighborhoods,” Housing Matters, An Urban Institute Initiative, August 16, 2023, https://housingmatters.urban.org/articles/how-hoas-can-shape-neighborhoods. 

³Jessica Edmonson, “57% of HOA residents don't like having an HOA,” Rocket Mortgage, March 4, 2024, https://www.rocketmortgage.com/learn/assessing-the-association. 

⁴Jesse Paul, “State lawmakers take steps to limit HOA foreclosures, equity loss after Colorado Sun investigation,” The Colorado Sun, April 15, 2024, https://coloradosun.com/2024/04/15/colorado-hoa-law-changes-foreclosures/.

⁵Jessica Edmonson, “57% of HOA residents don't like having an HOA,” Rocket Mortgage, March 4, 2024, https://www.rocketmortgage.com/learn/assessing-the-association. 

⁶Mitchell Drimmer, “Super Liens: Nice, but Not Necessary,” Alexa Collections Technology, 2025, https://www.axela-tech.com/blog/super-liens-nice-but-not-necessary/.