Gov. Jared Polis and other Democrats are calling for action after a report revealed homeowner associations have foreclosed on thousands of Colorado properties and auctioned off hundreds due to unpaid HOA fees. 

In a statement released Wednesday, Polis and four state legislators said the actions of these HOAs exacerbates Colorado’s ongoing housing crisis. Polis said he urges HOAs to be more flexible, but “clearly, there is more work to do” from the state legislature and local governments to protect and bolster the rights of property owners. 

“Burdensome HOA policies shouldn’t be so restrictive that they … force people from a home they love over untrimmed grass, or drain a family or individual of their financial savings,” Polis said. “These recent accounts are heartbreaking and deeply troubling.” 

Around 3,000 judicial foreclosures have been initiated by HOAs in Colorado since 2018, according to a Colorado Sun report released on Monday. 

More than 250 of the foreclosed properties, roughly 8%, were then sold at a sheriff’s auction for a fraction of their market value. This practice wipes out years of equity, the report found, with some properties auctioned off for less than 10% of their value. At least 100 homes were auctioned off for $60,000 or less. 

The foreclosures were initiated for unpaid HOA debts, some totaling as little as a few thousand dollars before interest, HOA attorneys fees and court costs, according to the report. 

“HOAs should not be in the business of auctioning or selling off people’s homes – they should be doing everything in their power to build happy, healthy, and safe communities,” said Rep. Lorena Garcia, D-Adams County. “We have work to do to make sure HOAs do not buy into predatory practices that harm Coloradans and make our housing crisis worse.” 

Legislative Republicans were not available for comment.

The state legislature has taken up this issue before. Last year, legislators passed a bill requiring HOAs to notify residents of any accumulated fines or assessments and attempt to set up a payment plan before initiating a foreclosure. It also set a limit on late fees and interest, among other changes.

Even more recently, legislators passed a bill in May to create a task force charged with investigating HOAs, looking into how the associations work, how they get their authority and what types of concerns residents within them have. 

But Democrats argue past legislation has not done enough. 

“It’s clear there’s more work to do to ensure that predatory practices aren’t pushing people out of their homes they’ve worked so hard for,” said Rep. Naquetta Ricks, D-Aurora, who sponsored the 2022 HOA bill. “Every day Coloradans are losing their homes, equity and are seeing their credit scores irreparably damaged by foreclosure forced by HOAs.” 

Around 60% of Coloradans live under a homeowner association, according to 2019 state estimates. 

Other Democratic legislators who released statements calling for legislative action against HOA foreclosures include Rep. Brianna Titone of Arvada and Rep. Jennifer Parenti of Erie.