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Priority Lien - Colorado

TITLE 38. PROPERTY - REAL AND PERSONAL  

REAL PROPERTY 

ARTICLE 33.3. COLORADO COMMON INTEREST OWNERSHIP ACT 

PART 3. MANAGEMENT OF THE COMMON INTEREST COMMUNITY

 

Section 38-33.3-316 - Lien for assessments - liens for fines, fees, charges, costs, and attorney fees - limitations

(1)
(a) The association, if such association is incorporated or organized as a limited liability company, has a statutory lien on a unit for any assessment levied against that unit or fines imposed against its unit owner. Fees, charges, late charges, attorney fees up to the maximum amount authorized under subsection (7) of this section, fines, and interest charged pursuant to section 38-33.3-302(1)(j), (1)(k), and (1)(l), section 38-33.3-313(6), and section 38-33.3-315(2) may be subject to a statutory lien but are not subject to a foreclosure action under this article 33.3.
(b) If an assessment is payable in installments, each installment may be subject to a statutory lien if the unit owner fails to pay the installment within fifteen days after the installment becomes due, but the association may not pursue legal action for unpaid monthly installments until the unit owner has failed to pay at least three monthly installments pursuant to section 38-33.3-209.5(7)(a)(III)(B).

(2)
(a) A lien under this section is prior to all other liens and encumbrances on a unit except:
(I) Liens and encumbrances recorded before the recordation of the declaration and, in a cooperative, liens and encumbrances which the association creates, assumes, or takes subject to;
(II) A security interest on the unit which has priority over all other security interests on the unit and which was recorded before the date on which the assessment sought to be enforced became delinquent, or, in a cooperative, a security interest encumbering only the unit owner's interest which has priority over all other security interests on the unit and which was perfected before the date on which the assessment sought to be enforced became delinquent; and
(III) Liens for real estate taxes and other governmental assessments or charges against the unit or cooperative.
(b) Subject to paragraph (d) of this subsection (2), a lien under this section is also prior to the security interests described in subparagraph (II) of paragraph (a) of this subsection (2) to the extent of:
(I) An amount equal to the common expense assessments based on a periodic budget adopted by the association under section 38-33.3-315(1) which would have become due, in the absence of any acceleration, during the six months immediately preceding institution by either the association or any party holding a lien senior to any part of the association lien created under this section of an action or a nonjudicial foreclosure either to enforce or to extinguish the lien.
(II) (Deleted by amendment, L. 93, p. 653, § 21, effective April 30, 1993.)
(c) This subsection (2) does not affect the priority of mechanics' or materialmen's liens or the priority of liens for other assessments made by the association. A lien under this section is not subject to the provisions of part 2 of article 41 of this title or to the provisions of section 15-11-202, C.R.S.
(d) A lien described in subsection (1) of this section has the priority described in this subsection (2) if the other lien or encumbrance is created after June 30, 1992.

(3) Unless the declaration otherwise provides, if two or more associations have liens for assessments created at any time on the same property, those liens have equal priority.

(4) Recording of the declaration constitutes record notice and perfection of the lien. No further recordation of any claim of lien for assessments is required.

(5) A lien for unpaid assessments is extinguished unless proceedings to enforce the lien are instituted within six years after the full amount of assessments become due.

(6) This section does not prohibit actions or suits to recover sums for which subsection (1) of this section creates a lien or to prohibit an association from taking a deed in lieu of foreclosure.

(7)
(a)
(I) The association is entitled to costs and reasonable attorney fees that the association incurs in any action or suit for a judgment or decree brought by the association under this section.
(II) A court shall determine reasonable attorney fees in accordance with rule 121 sec. 1-22 of the Colorado rules of civil procedure.
(b) An association is not entitled to recover attorney fees under subsection (7)(a) of this section for attorney fees incurred before the association has complied with the notice requirements of section 38-33.3-209.5 (1.7)(a) with regard to any matter for which the association is required to comply with the notice requirements of section 38-33.3-209.5 (1.7)(a).

(8) The association shall furnish to a unit owner or such unit owner's designee or to a holder of a security interest or its designee upon written request, delivered personally or by certified mail, first-class postage prepaid, return receipt, to the association's registered agent, a written statement setting forth the amount of unpaid assessments currently levied against such owner's unit. The statement shall be furnished within fourteen calendar days after receipt of the request and is binding on the association, the executive board, and every unit owner. If no statement is furnished to the unit owner or holder of a security interest or his or her designee, delivered personally or by certified mail, first-class postage prepaid, return receipt requested, to the inquiring party, then the association shall have no right to assert a lien upon the unit for unpaid assessments which were due as of the date of the request.

(9) In any action by an association to collect assessments or to foreclose a lien for unpaid assessments, the court may appoint a receiver of the unit owner to collect all sums alleged to be due from the unit owner prior to or during the pending of the action. The court may order the receiver to pay any sums held by the receiver to the association during the pending of the action to the extent of the association's common expense assessments.

(10) In a cooperative, upon nonpayment of an assessment on a unit, the unit owner may be evicted in the same manner as provided by law in the case of an unlawful holdover by a commercial tenant, and the lien may be foreclosed as provided by this section.

(11) The association's lien may be foreclosed by any of the following means:
(a) In a condominium or planned community, the association's lien may be foreclosed in like manner as a mortgage on real estate; except that the association or a holder or assignee of the association's lien, whether the holder or assignee of the association's lien is an entity or a natural person, may only foreclose on the lien if:
(I) The balance of the assessments and charges secured by its lien, as defined in subsection (2) of this section, equals or exceeds six months of common expense assessments based on a periodic budget adopted by the association; and
(II) The executive board has formally resolved, by a recorded vote, to authorize the filing of a legal action against the specific unit on an individual basis. The board may not delegate its duty to act under this subparagraph (II) to any attorney, insurer, manager, or other person, and any legal action filed without evidence of the recorded vote authorizing the action must be dismissed. No attorney fees, court costs, or other charges incurred by the association or a holder or assignee of the association's lien in connection with an action that is dismissed for this reason may be assessed against the unit owner.
(b) In a cooperative whose unit owners' interests in the units are real estate as determined in accordance with the provisions of section 38-33.3-105, the association's lien must be foreclosed in like manner as a mortgage on real estate; except that the association or a holder or assignee of the association's lien, whether the holder or assignee of the association's lien is an entity or a natural person, may only foreclose on the lien if:
(I) The balance of the assessments and charges secured by its lien, as defined in subsection (2) of this section, equals or exceeds six months of common expense assessments based on a periodic budget adopted by the association; and
(II) The executive board has formally resolved, by a recorded vote, to authorize the filing of a legal action against the specific unit on an individual basis. The board may not delegate its duty to act under this subparagraph (II) to any attorney, insurer, manager, or other person, and any legal action filed without evidence of the recorded vote authorizing the action must be dismissed. No attorney fees, court costs, or other charges incurred by the association or a holder or assignee of the association's lien in connection with an action that is dismissed for this reason may be assessed against the unit owner.
(c) In a cooperative whose unit owners' interests in the units are personal property, as determined in accordance with the provisions of section 38-33.3-105, the association's lien must be foreclosed as a security interest under the "Uniform Commercial Code", title 4, C.R.S.

(12) If a unit has been foreclosed, a member of the executive board, an employee of a community association management company representing the association, an employee of a law firm representing the association, or an immediate family member, as defined in section 2-4-401 (3.7), of any such executive board member, community association management company employee, or law firm employee shall not purchase the foreclosed unit.


C.R.S. § 38-33.3-316
Amended by 2022 Ch. 367,§4, eff. 8/10/2022.
Amended by 2014 Ch. 296,§16, eff. 8/6/2014.
Amended by 2013 Ch. 351,§2, eff. 1/1/2014.
L. 91: Entire article added, p. 1753, § 1, effective July 1, 1992. L. 93: (1), (2)(b), (4), and (8) amended and (2)(d) added, p. 653, § 21, effective April 30. L. 98: (1) amended, p. 485, § 19, effective July 1. L. 2013: (11)(a) and (11)(b) amended, (HB 13-1276), ch. 351, p. 2036, § 2, effective January 1, 2014. L. 2014: (2)(c) amended, (HB 14-1322), ch. 296, p. 1241, § 16, effective August 6.
2022 Ch. 367, was passed without a safety clause. See Colo. Const. art. V, § 1(3).