Colorado § 38-33.3-123 - Enforcement - limitation.

§ 38-33.3-123. Enforcement - limitation.

(1) (a) If a unit owner fails to timely pay assessments or any money owed to the association, the association may require, without the necessity of commencing a legal proceeding, reimbursement for the following, in addition to the assessments or owed money:

(I) Actual collection costs of the unpaid assessments;

(II) Reasonable attorney fees incurred as a result of the failure to pay; except that the association is not entitled to reimbursement for attorney fees that exceed five thousand dollars or fifty percent of the assessments and any money owed to the association as described in the introductory portion of this subsection (1)(a), whichever is less; and

(III) Other actual costs incurred as a result of the failure to pay.

(b) For any failure to comply with this article 33.3 or the declaration, bylaws, articles, or rules and regulations, other than the payment of assessments owed to the association, the association, any unit owner, or any class of unit owners adversely affected by the failure to comply may seek, without the necessity of commencing a legal proceeding, reimbursement for:

(I) Actual collection costs incurred as a result of the failure to comply; and

(II) Reasonable attorney fees and costs incurred as a result of the failure to comply; except that the association is not entitled to reimbursement for attorney fees that exceed five thousand dollars or fifty percent of the actual costs the association or unit owner incurred as a result of the failure to comply, whichever is less.

(c) (I) In any civil action to enforce or defend this article 33.3 or the declaration, bylaws, articles, or rules and regulations, the court shall award reasonable attorney fees, actual costs, and actual costs of collection to the prevailing party, except as provided in subsection (1)(c)(II) of this section.

(II) In connection with any civil action described in subsection (1)(c)(I) of this section to collect money owed to an association from a unit owner, the court shall not award attorney fees to the association in an amount in excess of five thousand dollars or fifty percent of the actual costs the association incurred as a result of the failure to comply with this article 33.3 or with the declaration, bylaws, articles, or rules and regulations, whichever is less; except that the court may award attorney fees in excess of the limitations, based on the court's discretion, if the court finds that the unit owner was financially, physically, and reasonably able to comply with the declaration, bylaws, articles, or rules and regulations but willfully failed to comply.

(d) Notwithstanding paragraph (c) of this subsection (1), in connection with any claim in which a unit owner is alleged to have violated a provision of this article or of the declaration, bylaws, articles, or rules and regulations of the association and in which the court finds that the unit owner prevailed because the unit owner did not commit the alleged violation:

(I) The court shall award the unit owner reasonable attorney fees and costs incurred in asserting or defending the claim; and

(II) The court shall not award costs or attorney fees to the association. In addition, the association shall be precluded from allocating to the unit owner's account with the association any of the association's costs or attorney fees incurred in asserting or defending the claim.

(e) A unit owner shall not be deemed to have confessed judgment to attorney fees or collection costs.

(f) In determining reasonable attorney fees pursuant to this subsection (1) relating to an association's foreclosure of a lien against a unit owner for unpaid assessments, the court shall give consideration to all relevant factors, including:

(I) The amount of the unpaid assessments;

(II) Whether the amount of the attorney fees requested exceeds the amount of the unpaid assessments;

(III) Whether the amount of time spent or fees incurred by the attorney are disproportionate to the needs of the case, considering the complexity of the case or the efforts required to obtain the unpaid assessments;

(III.5) Whether the association incurred inflated or duplicative attorney fees due to a stay in court proceedings pursuant to subsection (3) of this section for the association to come into strict compliance with applicable lien or foreclosure provisions of this title 38;

(IV) Whether the foreclosure action was contested or required the association to respond to unmeritorious defenses; and

(V) Other factors typically considered in determining an award of attorney fees.

(g) The limitations on attorney fees in subsections (1)(a)(II), (1)(b)(II), and (1)(c)(II) of this section are adjusted for inflation on August 1, 2025, and each year thereafter. Inflation is measured by the annual percentage change in the United States department of labor's bureau of labor statistics consumer price index, or a successor index, for Denver-Aurora-Lakewood for all items paid by urban consumers.

(2) Notwithstanding any law to the contrary, no action shall be commenced or maintained to enforce the terms of any building restriction contained in the provisions of the declaration, bylaws, articles, or rules and regulations or to compel the removal of any building or improvement because of the violation of the terms of any such building restriction unless the action is commenced within one year from the date from which the person commencing the action knew or in the exercise of reasonable diligence should have known of the violation for which the action is sought to be brought or maintained.

(3) Notwithstanding any law to the contrary, as a condition precedent to recovering money owed to an association, collection costs, or reasonable attorney fees or costs through the foreclosure of an association lien, the association shall strictly comply with any applicable association lien or foreclosure provisions of this title 38 and any applicable lien or foreclosure provisions of the association's declaration, bylaws, articles, and rules and regulations. In addition, if a court determines that a common interest community is not in strict compliance with the lien or foreclosure provisions of this title 38, the court may stay the proceedings to grant the association a reasonable period of time to come into strict compliance with the law. During the stay in proceedings, the association shall not assess or accrue late fees, interest, or other delinquency charges against the unit owner.

Source: L. 91: Entire article added, p. 1714, § 1, effective July 1, 1992. L. 96: Entire section amended, p. 1087, § 1, effective May 23. L. 2005: (1) amended, p. 1376, § 5, effective January 1, 2006. L. 2006: (1)(c) amended, p. 1217, § 4, effective May 26. L. 2024: (1)(a), (1)(b), and (1)(c) amended and (1)(f) and (1)(g) added, (HB 24-1337), ch. 422, p. 2880, § 1, effective August 7. L. 2025: (1)(f)(III.5) and (3) added, (HB 25-1043), ch. 433, p. 2497, § 2, effective October 1.

ANNOTATION

The express language of this section requires a plaintiff to prevail on a claim to obtain an award of attorney fees and no fees will be awarded where the merits of a defendant's affirmative defenses have not yet been adjudicated. Dunne v. Shenandoah Homeowners Ass'n, Inc., 12 P.3d 340 (Colo. App. 2000).

There is no "prevailing party" upon dissolution of a preliminary injunction, because at that point there has not yet been a resolution on the merits. DeJean v. Grosz, 2015 COA 74, 412 P.3d 733.

Where HOA prevailed on a significant issue against the declarant, the HOA was entitled to have the trial court determine and award it reasonable attorney fees and costs under this section. FD Interests v. Fairways at Buffalo Run, 2019 COA 148, 490 P.3d 496.

Even assuming a trial court could determine that an overall case ended in a tie, subsection (1)(c) requires a court to award fees "for each claim...to the party prevailing on such claim". Therefore, the statutory claim-by-claim approach differs from the C.R.C.P. 54(d) analysis of multiple claims cases. Giguere v. SJS Family Enters., 155 P.3d 462 (Colo. App. 2006) (decided under law in effect prior to the 2006 amendment).

Subsection (1)(c), as amended in 2006, requires a court to determine the prevailing party in the action as a whole, not on a claim-by-claim basis. Far Horizons Farm v. Flying Dutchman Condo., 2023 COA 99, 542 P.3d 700.

By its express language this section does not apply to tort claims in which the plaintiff's primary purpose was not to enforce the covenants contained in the declaration but was to secure a damage award. Colo. Homes, Ltd. v. Loerch-Wilson, 43 P.3d 718 (Colo. App. 2001).

As a prevailing party on the defendant's claim for an assessment lien based on property damages, plaintiff is entitled to attorney fees and costs for that aspect of the case. Hallmark Bldg. Co. v. Westland Meadows Owners Ass'n, 983 P.2d 170 (Colo. App. 1999).

Section requires an award of attorney fees to defendants as a prevailing party in a civil action where plaintiff brought the action to enforce provisions of the Colorado Common Interest Ownership Act (CCIOA), even though the court rejected the plaintiff's claim that the defendant was subject to the CCIOA. Accetta v. Brooks Towers Residences Condo., 2021 COA 87, 496 P.3d 821.

Where a civil action is brought to enforce the covenants of a property owners' association, both elements of subsection (1)(c) are met. Cody Park v. Harder, 251 P.3d 1 (Colo. App. 2009).

The plain language of subsection (1)(c) does not require a prevailing party to be a unit owner to collect attorney fees, and the omission of the language from this subsection, in light of its inclusion in other subsections of the statute, evidences the general assembly's intent not to limit recovery of attorney fees under that subsection to unit owners. Cody Park v. Harder, 251 P.3d 1 (Colo. App. 2009).

Subsection (1)(c)'s requirement to award attorney fees to prevailing party applies in a civil action concerning a common interest declaration that predated the CCIOA. Section 38-33.3-117 incorporates the statute with regard to events and circumstances occurring on or after July 1, 1992. Accetta v. Brooks Towers Condo. Ass'n, 2021 COA 147M-2, 506 P.3d 857.

Collateral source rule does not apply to limit an award of fees to the amount of the deductible paid under a directors and officers insurance policy. Accetta v. Brooks Towers Condo. Ass'n, 2021 COA 147M-2, 506 P.3d 857.

No award of attorney fees to condominium association on appeal under C.A.R. 39.5 and this section. Subsection (1)(c) provides for recovery of attorney fees only in actions to "enforce or defend the provision of this article or of the declaration, bylaws, articles, or rules and regulations". Condominium association defended against purchasers' breach of contract action and sought declaratory action that contract was void. Neither purchasers' claims nor associations' counterclaims were to enforce or defend the article; thus, the statute does not apply. Platt v. Aspenwood Condo. Ass'n, 214 P.3d 1060 (Colo. App. 2009).

Allocation of liability for 30% of attorney fees award to owner of lot improper where owner did not attempt to use an easement that violated restrictive covenants, but merely refused to vacate the easement pending a legal determination as to its validity and where co-defendant actually commenced building a road in reliance on the easement. Allocation of liability for attorney fees must be commensurate with failure to comply with covenants and remand to the trial court for reapportionment of liability for attorney fees was necessary. Buick v. Highland Meadow Estates, 21 P.3d 860 (Colo. 2001).

Statute of limitations defense was not preserved on appeal where defendants raised the defense in their answer to plaintiffs' second amended complaint and in the trial management order, but failed to bring the defense to the court's attention in opening or closing statements, in an oral motion for a directed verdict, or in a motion for a new trial. Highland Meadows Estates v. Buick, 994 P.2d 459 (Colo. App. 1999), aff'd in part, rev'd in part on other grounds, 21 P.3d 860 (Colo. 2001).

Applied in Giguere v. SJS Family Enters., 155 P.3d 462 (Colo. App. 2006); Abril Meadows Homeowner's Ass'n v. Castro, 211 P.3d 64 (Colo. App. 2009); Briargate at Seventeenth Ave. v. Nelson, 2021 COA 78M, 494 P.3d 1149.