1. (1) In collecting past-due assessments and other delinquent payments under this article, an association or a holder or assignee of the association's debt, whether the holder or assignee of the association's debt is an entity or a natural person, shall:

   1. (a) Adopt and comply with a collections policy that meets the requirements of section 38-33.3-209.5 (5); and

   2. (b) Make a good-faith effort to coordinate with the unit owner to set up a payment plan that meets the requirements of this section; except that:

      1. (I) This section does not apply if the unit owner does not occupy the unit and has acquired the property as a result of:

         1. (A) A default of a security interest encumbering the unit; or
         2. (B) Foreclosure of the association's lien; and
      2. (II) The association or a holder or assignee of the association's debt is not obligated to negotiate a payment plan with a unit owner who has previously entered into a payment plan under this section.
2. (2) A payment plan negotiated between the association or a holder or assignee of the association's debt, whether the holder or assignee of the association's debt is an entity or a natural person, and the unit owner pursuant to this section must permit the unit owner to pay off the deficiency in equal installments over a period of at least eighteen months. Nothing in this section prohibits an association or a holder or assignee of the association's debt from pursuing legal action against a unit owner if the unit owner fails to comply with the terms of the unit owner's payment plan. A unit owner's failure to remit payment of three or more agreed-upon installments pursuant to section 38-33.3-209.5 (7)(a)(III)(B), or to remain current with regular assessments as they come due during the eighteen-month period, constitutes a failure to comply with the terms of the unit owner's payment plan.
3. (3) Repealed.
4. (3.5) An association or the holder or assignee of the association's debts shall not foreclose a lien created under section 38-33.3-316 if the unit owner is in compliance with the terms of a payment plan required by this section.
5. (4) If a unit owner who has both unpaid assessments and unpaid fines, fees, or other charges makes a payment to the association, the association shall apply the payment first to the assessments owed and any remaining amount of the payment to the fines, fees, or other charges owed.
6. (5) If an association has violated any foreclosure laws, the unit owner in relation to whom the violation occurred may, within five years after the violation occurred, file civil suit in a court of competent jurisdiction against the association to seek damages. The court may award the unit owner damages in an amount of up to twenty-five thousand dollars, plus costs and reasonable attorney fees, if the unit owner proves the violation by a preponderance of the evidence.

Source: L. 2013: Entire section added, (HB 13-1276), ch. 351, p. 2037, § 3, effective January 1, 2014. L. 2022: (2) amended, (3) repealed, and (4) and (5) added, (HB 22-1137), ch. 367, p. 2617, § 5, effective August 10. L. 2024: (3.5) added, (HB 24-1337), ch. 422, p. 2884, § 4, effective August 7.