On June 29, 2020, Governor Polis signed Senate Bill 20-211 into effect. Considering the devastation of COVID-19, Senate Bill 20-211 places a temporary prohibition on extraordinary collections actions. This includes “an action in the nature of an attachment, garnishment, levy, or execution to collect or enforce a judgment or debt.” SB 20-211 outlines requirements that a creditor must follow if it intends to initiate an extraordinary collection action, but does not prohibit collection outright. Failure to comply with the new requirements mandate that a court must dismiss the action without prejudice. The newly passed legislation does not appear to impact an association’s ability to seek foreclosure based on unpaid assessments. However, if an association is seeking to collect unpaid assessments through attachment, garnishment, levy or execution to collect or enforce a judgment or debt, the Association must advise the debtor of the right to temporarily suspend the collection action due to hardship created by the COVID-19 emergency. The debtor is not required to show documentation to support this request and may assert this right whether affected directly or indirectly. The statute does not prohibit the continued accrual of interest on the outstanding amount of the debt.
Additional information can be found here.
Given the uncertainties of dealing with collections during the pandemic, Associations and their property managers should review their collections process with a lawyer to ensure the new regulations are followed. Contact us today for a free consultation.