Homeowners’ associations (HOAs) play a crucial role in maintaining communities across Colorado. However, one of the most contentious issues homeowners face is assessment increases—the rising dues that HOAs impose to cover community expenses. Many homeowners wonder: Is my HOA legally allowed to increase assessments, and if so, by how much?
Understanding the legal framework governing HOA assessment increases can help homeowners protect their rights. If you believe your HOA has unlawfully raised your fees, consulting with a Denver HOA lawyer can clarify your legal options.
Understanding HOA Assessments in Colorado
An HOA assessment is a fee that homeowners must pay to support the maintenance and operation of their community. These assessments typically fund:
- Landscaping and common area upkeep
- Snow removal and road maintenance
- Community amenities like pools, gyms, and clubhouses
- Insurance and security services
- Reserve funds for major repairs
HOAs set and enforce these fees based on their governing documents, which include covenants, conditions, and restrictions (CC&Rs), bylaws, and budgets approved by the board of directors.
When Can a Colorado HOA Legally Increase Assessments?
In Colorado, an HOA’s authority to increase assessments is governed by both state law and the association’s governing documents. The Colorado Common Interest Ownership Act (CCIOA) sets out key regulations for HOA assessments and fee increases.
Here are the primary conditions under which an HOA can legally increase assessments:
1. The Increase Must Follow the Governing Documents
Before raising assessments, an HOA must comply with its declaration, bylaws, and CC&Rs. These documents typically outline:
- The maximum percentage an HOA can increase assessments annually
- Whether homeowners must vote on increases above a certain threshold
- The required notice period before implementing a fee hike
If the HOA board does not follow these provisions, the increase could be invalid and subject to legal challenge.
2. Compliance with the Colorado Common Interest Ownership Act (CCIOA)
Under the CCIOA (C.R.S. § 38-33.3-302), HOAs have the authority to collect and increase assessments as necessary. However, certain restrictions apply:
- If an HOA was established after July 1, 1992, it must comply fully with the CCIOA.
- For HOAs formed before 1992, the extent of compliance depends on whether they have adopted CCIOA provisions into their governing documents.
- If an HOA intends to increase fees beyond the limits set in its governing documents, homeowners may have the right to vote on the increase.
3. The Increase Must Be Justified by a Budget and Notice Requirements
HOAs cannot arbitrarily raise fees. Any assessment increase must be based on the community’s annual budget. In Colorado, most HOAs must:
- Distribute a proposed budget to homeowners before an increase
- Allow homeowners a chance to review and reject the budget (if enough members vote against it)
- Provide proper notice of the increase, typically 30 days in advance
Failure to meet these requirements could make an assessment increase unenforceable.
4. Emergency Assessments and Special Assessments
In some cases, an HOA may impose special assessments outside of regular fee increases. These are typically used for unexpected expenses, such as:
- Major repairs (e.g., roof replacements, road repaving)
- Legal fees related to HOA litigation
- Natural disaster recovery costs
However, special assessments must still comply with HOA bylaws. If a homeowner believes a special assessment is unjustified or excessive, they may challenge it with the help of a Denver HOA lawyer.
When Is an HOA Assessment Increase Illegal?
While HOAs have broad authority to increase assessments, they cannot do so arbitrarily or in violation of state law. A fee increase may be illegal if:
- The increase exceeds the maximum percentage allowed under the governing documents
- The board fails to provide proper notice to homeowners
- Homeowners were not given the opportunity to vote when required
- The increase is discriminatory, targeting specific homeowners unfairly
- The HOA misuses funds instead of applying them toward the community’s benefit
If you suspect your HOA has improperly increased assessments, you may have legal grounds to challenge the fee.
How Can a Denver HOA Lawyer Help?
Navigating an HOA dispute over assessment increases can be complex. A Denver HOA lawyer can:
- Review your HOA’s governing documents to determine if the increase is lawful
- Assess whether the HOA violated state law or CCIOA provisions
- Negotiate with the HOA board on behalf of homeowners
- File a lawsuit if necessary to challenge unlawful fee increases
- Help organize a homeowner vote to oppose an unfair budget
Legal representation is particularly important if the HOA is threatening foreclosure over unpaid assessments. In Colorado, HOAs can place liens on properties for unpaid fees, which may lead to foreclosure if left unresolved.
Steps to Take If You Disagree with an HOA Assessment Increase
If you believe your HOA has imposed an unlawful or excessive assessment increase, follow these steps:
- Review your HOA’s governing documents to check assessment rules
- Request financial records from the HOA to understand the reason for the increase
- Attend HOA meetings to voice your concerns and ask for justification
- Gather homeowner support to challenge the increase collectively
- Consult a Denver HOA lawyer if you suspect legal violations
Conclusion
HOA assessment increases are sometimes necessary to maintain a community, but they must comply with Colorado law and HOA governing documents. Homeowners have rights and should challenge any unfair or illegal increases.
If you are dealing with an unlawful HOA assessment increase in Colorado, a Denver HOA lawyer can help you navigate the legal complexities and protect your rights.
For expert legal assistance, contact Baker Law Group today to discuss your case and explore your legal options.