(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.