Have a dispute with your beloved homeowner association? Thinking about withholding your dues or assessments in protest? Well, be careful. You may lose your real property in the process.
Most new home construction and many pre-existing communities are bound together through a governing association. The right of this association to exist and make rules comes from documents filed in the real property records. The governing documents are called Declarations, or “Decs” for short.
Colorado’s elected representatives have declared that the financial strength of homeowner associations is important to the economic prosperity of Colorado. Dues and other association assessments are a priority lien against Colorado real property. The association is entitled to attorney fees, costs and interest in collecting any unpaid assessment. This is true even if the Decs do not explicitly provide for fees, costs and interest in collecting unpaid assessments.
Unless the Declarations provide otherwise, a corporate homeowner association is entitled to enforce the payment of dues and assessments as a lien against the owner’s real property. This lien can be foreclosed in the same manner as a mortgage.
Many homeowners believe that if they have a dispute with their homeowner association or if they do not agree with how the association is being governed, they can withhold payment of dues and assessments. This is not true. While an owner may have a legitimate complaint against the association, that does not give the owner a right not to pay dues and assessments. The better strategy is to pay what is owed and file a lawsuit against the association specifically addressing the owner’s complaint.
Many homeowners make the mistake of not paying their dues in protest. In response, the association files a lien against the owner’s real property and commences foreclosure proceedings. The homeowner then tries to pay just the dues to stop the foreclosure, but that is not enough. In addition to the dues, the homeowner must pay all attorney fees, costs and interest in order to stop the foreclosure process. This is true even if the dues are a mere $75.00.
This right to foreclosure and collect fees, costs and interest is not limited to dues and assessments. There are numerous payment obligations that may be enforced in this manner, including fines. So, think carefully before withholding payment obligations to an owner’s association. The results can be quite unpleasant and expensive.