Little by little, Colorado lawmakers are reining in out-of-control metro districts and homeowner associations. But much more needs to be done.

We are dumbfounded that a state law is necessary to prevent these quasi-governmental boards from abusing their power of fines, fees, interest and attorney fees to take people’s homes through a lien and foreclosure process. The districts and associations exist to serve the homeowners, and yet a few bad apples have found ways to use the districts to line their own pockets and the pockets of their friends.

Colorado House Bill 1267 will prevent some of these insidious practices starting next year. Getting even the narrow language of HB 1267 through the General Assembly is an impressive feat because the lobby to protect the interests of the developers and management companies that run these HOAs and metro districts is shockingly strong and includes the Metro District Education Coalition, which was created in response to Denver Post editorials and investigations uncovering unethical practices.

The bill, authored by state Representatives Iman Jodeh and Jennifer Bacon and Senators Tony Exum and James Coleman, will prevent metropolitan districts, which are often completely controlled by developers, from using fines to retake the homes they just built and sold.

Under the law, metro districts can still file liens on a property to attempt to recoup unpaid fees or fines. But, the bill strips metro district boards from using foreclosures. Critically, the legislation also limits the interest and attorney fees that can be tacked onto a lien.

Unfortunately, a similar law regulating homeowner associations, which operate under a different part of the law from metro districts, was killed in the Colorado House by a combination of Democrats and Republicans. We cannot fathom why poorly regulated HOAs should be trusted with foreclosure powers that give them similar status as the holder of a primary mortgageor the government for unpaid taxes.

The death of House Bill 1158 underpins the power of a lobby that is also opposed to a bill that would create regulation of management companies, which has stalled in the Colorado House and hasn’t had a vote in a month.

One sponsor of the legislation, Rep. Naquetta Ricks, an Aurora Democrat, told The Denver Post that the bill would have passed in the House had four other Democrats not been absent for the vote.

Fortunately, a different bill, House Bill 1337 is headed to Polis’ desk, and we urge him to sign it. The legislation doesn’t go as far as House Bill 1158 but it does put helpful restrictions on how much in attorneys fees can be tacked onto a lien. Also, it at least requires that an HOA initiate a legal proceeding before it can sell someone’s house out from under them using the foreclosure process. Before taking someone’s home for unpaid fees or fines, an HOA must offer the resident a payment plan. This will mean no one loses their home because they don’t have cash and people will no longer be forced to take out high-interest loans or use credit cards to pay fines.

Ricks called the current process used by HOAs to foreclose “equity theft.” We agree and at least if House Bill 1337 becomes law, the theft won’t be quite as easy.