HOA Payment Plans and Late Fees in Colorado

HOA Collections · Colorado

Colorado HOAs can charge late fees and interest on unpaid dues, but only under a written collection policy, with no daily fees and interest capped at 8% a year. Before foreclosing, the association must offer the owner an 18-month payment plan, with payments as low as $25 a month.

Late fees: the rules

• Written policy first. Late fees, interest and bounced-check charges must be spelled out in the association’s collection policy (C.R.S. 38-33.3-209.5).
• No daily fees. A late fee can’t keep growing every day the balance is open.
• Not a revenue source. Late fees and fines can’t be set so the budget depends on them.
• Interest capped at 8% a year on unpaid assessments, fines or fees.
• No fee for a payoff statement. Owners can get the total they owe at no charge.
• Certified mail costs for notices can be charged to the owner (HB24-1233).

Payments go to past-due assessments first, then to fines, fees and other charges. That keeps owners from being stuck with a growing assessment balance while their payments cover late fees.

Payment plans: the rules

These rules come from HB22-1137 and C.R.S. 38-33.3-316.3. A 2024 bill proposed shortening the plan to 12 months, but that language was cut before it passed, so 18 months still applies. The state’s HOA Center confirmed the 18-month, $25 terms in 2025 (DRE HOA Forum).

A simple example

An owner in a Silverthorne townhome community owes $2,700 in back dues. Regular dues are $300 a month.

• Spread over 18 months, the back dues come to $150 a month.
• The owner could choose a lower amount, as long as it’s at least $25. Any balance left after 18 months is still owed under the plan terms.
• The owner must keep paying the regular $300 dues too.
• Monthly statements show both: the plan payment and current dues.

Plan terms like what happens to the remaining balance belong in the written policy. Have your HOA attorney review it.

How to run payment plans well

• Put it in writing: balance, monthly amount, due date and what counts as default.
• Track it separately on the owner ledger so the board can see plan payments vs current dues.
• Send reminders a few days before each due date.
• Offer autopay. ACH from the owner’s bank cuts missed payments.
• Report monthly to the board: who’s on a plan, who’s current, who missed.
• Keep records of plans offered and completed. The state now asks associations to report payment plan counts when they renew their registration.

For boards: make late fees work for you

The goal of a late fee is on-time payment, not revenue. A small, clear late fee, quick reminders and easy online or ACH payments usually do more than a big penalty. Mountain associations with many out-of-state owners see the biggest gains from autopay and email reminders.

We set up reminders, statements and payment plan tracking for the associations we work with. See our HOA accounting services and pricing. Related: what boards can and can’t do with delinquent dues.

This is accounting education, not legal advice. Have an HOA attorney review your collection policy and payment plan terms.

FAQ

Does a Colorado HOA have to offer a payment plan?

Before it can foreclose on unpaid assessments, yes. The association must offer a plan to pay the debt in monthly installments over 18 months. It doesn’t have to offer one to an owner who already had a plan.

How much does an owner have to pay each month on the plan?

The owner chooses the amount, as long as each payment is at least $25. The Colorado Division of Real Estate lists requiring more than $25 a month as an example of not strictly complying with the law.

What happens if the owner misses payments on the plan?

If the owner misses three or more payments, or falls behind on regular dues during the plan, the association may move forward with legal action under its collection policy.

Can an HOA charge a late fee every day?

No. Colorado bans daily late fees and daily fines. Late fees must follow the association’s written collection policy.

What is the interest cap on late HOA dues in Colorado?

8% a year on unpaid assessments, fines or fees.

Sources

• C.R.S. 38-33.3-209.5 (collection policy, late fees, interest)
• C.R.S. 38-33.3-316.3 (payment plans)
• Colorado Division of Real Estate: HB25-1043 HOA Forum (2025)
• HB22-1137 and HB24-1233