Debt collection reform coming for Colorado HOAs
Jul 17, 2013 Philip Burgess
State laws recently passed in Colorado will change the way in which homeowners associations (HOAs) will be able to collect on debts. According to the Denver Post, the legislation is a result of a number of consumer complaints filled against HOAs regarding poor debt collection practices.
Now, HOAs will be required to establish a detailed collection policy that is available to homeowners. Additionally, HOAs will have to provide a six-month payment plan to homeowners behind on payments. Starting on July 1, 2015, all managers within a HOA have to obtain a state collection license.
Estimates cited by the Denver Post indicated that there are between 12,000 and 15,000 HOAs in Colorado. So far in 2013, the state's Division of Real Estate has received 754 complaints about HOA debt collection. Last year, just 576 complaints were filed overall. A large portion of the complaints this year derive from a lack of adherence with governing documents and poor communication between HOAs and homeowners, the source noted.
Debt collection reform is a major point of emphasis for many lawmakers across the country. The number of Americans that carry some sort of debt means that the industry is a massive one. According to a Consumer Financial Protection Bureau report, in 2012, 30 million adults in the United States had debt that was open to collection.