Colorado HOA Budget Approval

Section 1: Overview, how HOA budgets are approved in Colorado

Colorado approves homeowners' association budgets by putting the decision in the owners' hands, but only if they speak up. The Colorado Common Interest Ownership Act (CCIOA), Colo. Rev. Stat. § 38-33.3-101 et seq., governs condominiums, cooperatives, and planned communities created on or after July 1, 1992, and it runs the budget by negative option. The core mechanic sits at Colo. Rev. Stat. § 38-33.3-303(4): the executive board adopts a proposed budget, and that budget is ratified unless a majority of all unit owners reject it. Colorado adds a wrinkle of its own, giving the board 90 days after adoption to distribute a budget summary.¹ Owners do not vote to approve the budget. It passes by default unless they affirmatively reject it. On reserves, CCIOA tells associations to adopt a written reserve policy and to disclose whether a reserve study exists and how they fund reserves, but it stops short of mandating a study or a minimum reserve balance for existing associations.² Communities created before July 1, 1992 follow a narrower set of CCIOA provisions that the Act lists in its retroactivity section, though the budget-ratification process now reaches them for events on or after July 1, 2017.³ Colorado belongs to the family of states that adopted the Uniform Common Interest Ownership Act, but its budget timing departs from the uniform text. The table and sequence below lay out the mechanics, the operational steps, and the points where a recorded declaration can change the default.

Section 2: The budget approval mechanism

The table below sets out the CCIOA budget mechanism for common interest communities created on or after July 1, 1992. Subsection 2C covers pre-July-1992 communities.

2A. Quick-Reference Budget Mechanics Table

2B. The budget approval sequence

The process is negative-option ratification, not an affirmative member vote. Step one: the executive board adopts a proposed budget, using its statutory power to adopt and amend budgets for revenues, expenditures, and reserves under Colo. Rev. Stat. § 38-33.3-302(1)(a).¹² Step two: within 90 days after adoption, the board mails by first-class mail or otherwise delivers — including by posting on the association's website — a summary of the budget to all unit owners and sets a date for an owners' meeting to consider it.⁵ This 90-day summary window is where Colorado breaks from the uniform text, which uses a 30-day window. Step three: the meeting must happen within a reasonable time after the board mails or delivers the summary, or as the bylaws allow, with notice given as the bylaws allow.⁵ This "reasonable time" standard is Colorado's second deviation; the uniform text fixes a 14-to-30-day meeting window. Step four: at the noticed meeting, the budget ratifies by default. Unless the declaration says otherwise, the budget needs no owner approval and is deemed approved unless a majority of all unit owners veto it (or a class majority if the declaration permits, or any larger percentage the declaration specifies), whether or not a quorum is present.⁶ No quorum is required to ratify. Step five: if owners reject the budget, the last periodic budget they did not veto continues until a later proposed budget survives the same test.⁶

Ratifying the budget is not the same as levying the assessment. Once a budget takes effect, the association levies common-expense assessments against the units according to the allocated interests set in the declaration under Colo. Rev. Stat. § 38-33.3-315, which requires assessments to rest on a periodic budget adopted at least annually.¹³ The ratification mechanism decides whether the budget stands; the assessment provision decides how the resulting common expenses get apportioned among units.

2C. Variation by declaration, pre-CCIOA communities, and the corporate-law overlay

CCIOA provisions generally cannot be varied by agreement, and owners cannot waive the rights they confer, under Colo. Rev. Stat. § 38-33.3-104.¹⁴ The budget provision is an express exception, but it runs only one way: the declaration may make ratification harder by requiring affirmative owner approval, a larger rejection percentage, or class voting.⁶ A declaration cannot drop the rejection threshold below a majority or add a quorum requirement. Where the governing documents and CCIOA conflict, the statute controls, except where it expressly defers to the declaration.

The budget-ratification process reaches pre-CCIOA communities. The retroactivity list at Colo. Rev. Stat. § 38-33.3-117(1.8) applies § 38-33.3-303(4)(a) to all communities created before July 1, 1992 for events and circumstances occurring on or after July 1, 2017.³ One exception applies: the veto subsection does not reach a pre-1992 community whose declaration sets a maximum assessment or caps the annual increase, as long as the proposed budget stays within that limit; there, the meeting is informational rather than a ratification vote.¹⁵

Most Colorado associations also incorporate as nonprofit corporations under the Colorado Revised Nonprofit Corporation Act, Colo. Rev. Stat. § 7-121-101 et seq., which supplies meeting, notice, and board-governance formalities that run alongside CCIOA. The Nonprofit Act sets no budget-approval threshold of its own; CCIOA sets the budget mechanism.¹⁶

Section 3: Budget-adjacent obligations

A. Reserves in the budget

CCIOA requires every association, including pre-1992 communities, to adopt a written responsible-governance policy that addresses reserve studies under Colo. Rev. Stat. § 38-33.3-209.5(1)(b)(IX). The policy must say when the association will have a reserve study prepared, whether a funding plan exists for the recommended work and where the money will come from, and whether any study rests on a physical and financial analysis; an internally conducted study will do.¹⁷ Colorado does not require a reserve study or a minimum reserve balance for existing associations. The Division of Real Estate says plainly that Colorado requires a reserve policy, not a study, and sets no funding minimum.²

B. Special assessments

CCIOA contains no separate special-assessment statute and no dedicated threshold. A board levies a special assessment in one of two ways: it obtains owner approval under the procedures in the governing documents, or it runs the § 38-33.3-303(4) budget-ratification process on an amended budget. Where the documents say nothing, the ratification process governs, and a board cannot simply impose a special assessment without ratification even if the documents appear to allow it.⁸ This applies to communities subject to CCIOA.

C. Assessment increase limits

CCIOA imposes no percentage cap on annual assessment increases. SB22-060, which according to Faegre Drinker Biddle & Reath (June 2022) "would have established a cap on any increase in fees charged for the use, rental or operation of common elements unless approved by a majority" of members, failed to pass, and CCIOA carries no Davis-Stirling-style ceiling.¹⁸ Any cap comes only from a recorded declaration, which binds where it exists and is otherwise absent.

D. Financial review, audit, and disclosure tied to the budget cycle

CCIOA does not require an annual independent audit. Under Colo. Rev. Stat. § 38-33.3-303(4)(b), an audit is required only when the association takes in or spends at least $250,000 a year and owners of at least one-third of the units request it; a review is required on a one-third owner request, and the association must make copies available to any unit owner within 30 days of completion.¹⁰ Separately, Colo. Rev. Stat. § 38-33.3-209.4 requires associations to make annual disclosures available to owners within 90 days after the end of each fiscal year, including the budget and financial information.¹⁹ These requirements apply to communities subject to CCIOA, and they are mandatory.

Section 4: Recent legislative and judicial activity

A. Recent bills

Two recent measures bear on how Colorado communities handle their finances — one signed for 2026, one signed in 2024.

B. Recent appellate rulings

No published Colorado appellate opinion in the past 36 months has interpreted the budget-ratification provision (§ 38-33.3-303(4)) or the common-expense assessment provision (§ 38-33.3-315) directly. The closest in-window decision asks whether an assessment obligation exists in the first place.

C. Active legislative debates

CCIOA stays an active subject in the General Assembly. Collection and foreclosure measures such as HB25-1043 (effective October 1, 2025) are reshaping enforcement and registration data, though that bill deals with collections rather than budget approval.

Section 5: National positioning and related coverage

Colorado belongs to the group of states that adopted the Uniform Common Interest Ownership Act and use negative-option budget ratification, under which a board-adopted budget passes unless owners affirmatively reject it. Colorado's timing departs from the uniform text: it uses a 90-day summary window and a reasonable-time meeting window, not the uniform 30-day summary window and 14-to-30-day meeting window that some sister states follow. That sets it apart from affirmative-approval and increase-cap states such as California, whose Davis-Stirling Act, Cal. Civ. Code § 5605(b), provides that "the board may not impose a regular assessment that is more than 20 percent greater than the regular assessment for the association's preceding fiscal year or impose special assessments which in the aggregate exceed 5 percent of the budgeted gross expenses of the association for that fiscal year without the approval of a majority of a quorum of members," and from CC&R-only states that leave budget approval entirely to recorded covenants.²³ A multi-state operator expanding into Colorado will find the mechanism familiar from other UCIOA states, but should apply Colorado's own day-counts and the reasonable-time standard rather than the uniform numbers.

HOA Weekly's Colorado Budget Approval coverage updates quarterly as the General Assembly and the Colorado courts act. Federal frameworks, including the Fair Housing Act, the Americans with Disabilities Act, the Fair Debt Collection Practices Act, the Servicemembers Civil Relief Act, and the OTARD rule, apply to Colorado associations regardless of the state budget framework.

1. Colo. Rev. Stat. § 38-33.3-303(4), § 38-33.3-302 & § 38-33.3-315, Colorado Common Interest Ownership Act (official text via Colorado Division of Real Estate) ↩
2. Colorado Division of Real Estate, HOA Finances ↩
3. Colo. Rev. Stat. § 38-33.3-117(1.8) ↩
4. Colo. Rev. Stat. § 38-33.3-303(4)(a)(II)(B) & § 38-33.3-117(1.8) ↩
5. Colo. Rev. Stat. § 38-33.3-303(4)(a)(I) ↩
6. Colo. Rev. Stat. § 38-33.3-303(4)(a)(II)(A) ↩
7. Colo. Rev. Stat. § 38-33.3-303(4)(a)(II)(A); Colorado Division of Real Estate, Passing an Association Budget ↩
8. Colorado Division of Real Estate, HOA Information About Assessments ↩
9. Colo. Rev. Stat. § 38-33.3-209.5(1)(b)(IX); H.B. 26-1099, Colo. Gen. Assemb. (2026) ↩
10. Colo. Rev. Stat. § 38-33.3-303(4)(b) ↩
11. Colo. Rev. Stat. § 38-33.3-303(4)(a)(II)(A) & § 38-33.3-104, Colorado Common Interest Ownership Act (official text via Colorado Division of Real Estate) ↩
12. Colo. Rev. Stat. § 38-33.3-302(1)(a); Colorado Division of Real Estate, Passing an Association Budget ↩
13. Colo. Rev. Stat. § 38-33.3-315 ↩
14. Colo. Rev. Stat. § 38-33.3-104, Variation by Agreement, Colorado Common Interest Ownership Act (official text via Colorado Division of Real Estate) ↩
15. Colo. Rev. Stat. § 38-33.3-303(4)(a)(II)(B) ↩
16. Colorado Revised Nonprofit Corporation Act, Colo. Rev. Stat. § 7-121-101 et seq.; Colorado Division of Real Estate, HOA Frequently Asked Questions ↩
17. Colo. Rev. Stat. § 38-33.3-209.5(1)(b)(IX) ↩
18. S.B. 22-060 & H.B. 22-1387, Colo. Gen. Assemb. (2022) (H.B. 22-1387 vetoed; S.B. 22-060 failed) ↩
19. Colo. Rev. Stat. § 38-33.3-209.4 ↩
20. H.B. 26-1099, Protect Financial Condition of Common Interest Communities, Colo. Gen. Assemb. (2026) ↩
21. S.B. 24-021, Colo. Gen. Assemb. (2024); Colorado Division of Real Estate Advisory ↩
22. Frisco Lot 3 LLC v. Giberson, 2024 COA 125 (Colo. App. Dec. 12, 2024) (No. 22CA2219) ↩
23. Cal. Civ. Code § 5605(b) (Davis-Stirling Common Interest Development Act) ↩