HB24-1158: HOA Foreclosure Protection Summary

• HOA associations must send notice of delinquency to unit owners before turning accounts over to collections or attorneys, including information about free resources available through the Department of Regulatory Agencies' HOA Information and Resource Center

• HOA associations must provide written notice at least 30 days before foreclosure that credit counseling is available at the unit owner's expense, with details on how to access counseling services

• Court awards of reasonable attorney fees for HOA foreclosures are limited to $5,000 or 50% of the lien amount being foreclosed, whichever is less, with courts required to consider multiple factors when determining fees

• Minimum initial bid amounts at foreclosure auctions must include the HOA lien, unpaid taxes, first mortgage amount, and 60% of the unit owner's equity in the property (unless reduced by agreement)

• Individuals and entities prohibited from purchasing foreclosed units are expanded to include community association management companies and anyone who held specified roles during the 5-year period preceding the foreclosure sale, plus affiliated business entities

• Bill applies to HOA liens foreclosed on or after October 1, 2024