Colorado HOA late fees, interest and payment plans

CCIOA lets an association charge for late payment of assessments without naming an amount. What it controls is the method. A late fee cannot be imposed on a daily basis, so a rule like $5 a day until the account is current does not comply. A late fee charged once for a missed installment is allowed.

The amount has to appear in the association's written collection policy, along with the interest rate, any returned-check charge, the payment plan terms and how payments are applied. An association that has not adopted and followed that policy cannot use a collection agency or file suit to collect unpaid assessments.

Interest on a past-due assessment runs at the rate the association sets, up to 8 percent a year. The same 8 percent ceiling covers unpaid fines and fees. An older declaration that names 18 percent does not override the 8 percent limit.

At 8 percent, a $450 quarterly assessment left unpaid for three months picks up $9 in interest. The statute does not set a default rate, so if the collection policy names none, ask the association what it charges.

If you owe both assessments and fines or fees, Colorado sends your payment to the assessments first. Owe a $450 assessment and a $200 fine, pay $450, and the assessment is cleared. The fine is what remains.

When it collects past-due assessments, the association must make a good-faith effort to set up a payment plan in equal installments over at least 18 months. A $1,800 balance spread over 18 months is $100 a month. The plan fails if you miss three or more installments or fall behind on regular assessments during it, and the association does not have to offer a second plan to an owner who already had one. While you stay current on the plan, the association cannot foreclose its lien.

Before a judicial foreclosure, the association also has to offer in writing an 18-month repayment plan where you choose the monthly amount, as long as each payment is at least $25.

Since October 1, 2025 (HB25-1043), if a court pauses a collection or foreclosure case so the association can come into strict compliance with the lien and foreclosure rules, the association cannot add late fees, interest or other delinquency charges during that pause.

Read these before you make an offer:

• The collection policy, and whether it states the late fee and interest rate.
• Any interest rate above 8 percent in the declaration, bylaws or policy.
• Any late fee that is charged per day.
• How the policy applies payments, which should put assessments ahead of fines and fees.
• The seller's ledger and status letter for late fees and interest on the unit.

A collection policy that still lists 18 percent interest or a daily late fee shows the association has not updated its documents since HB22-1137 took effect in August 2022. That is worth knowing before you rely on the rest of its paperwork.

An HOA Notes brief reads the collection policy, declaration and fee schedule, checks the late fee and interest terms against CCIOA, and cites the page behind every finding.

Colorado Revised Statutes section 38-33.3-209.5 (8) and section 38-33.3-316.3 (Interest cap, late fees and payment plans). Interest on unpaid assessments, fines, or fees may not exceed eight percent per year (209.5 (8)(a); 315 (2)); late fees may not be imposed on a daily basis (209.5 (1.7)(b)); CCIOA sets no dollar cap on a late fee, but the written collection policy must state the late fees and interest charged (209.5 (5)(a)); the association must make a good-faith effort to set up a payment plan of equal installments over at least eighteen months (316.3 (2)); a payment goes first to assessments, then to fines, fees, or other charges (316.3 (4)). The association may charge a late fee in the amount its collection policy states and interest up to eight percent per year; it need not offer a second payment plan to an owner who already had one, and it may pursue legal action if the owner misses three or more plan installments or falls behind on regular assessments during the plan; late charges and interest may be liened but are not subject to foreclosure (316 (1)(a)).

When you read the disclosure packet, watch for interest accrues at 12 percent or 18 percent per year on delinquent accounts, a late fee of $5 per day until the account is brought current, payments are applied first to late fees, interest, and fines before assessments, no payment plan is available; the full balance is due before referral to collections, and the collection policy does not state the late fee or interest rate. HOA Notes flags each of these against the statute and tells you which restrictions are actually enforceable.