You find a condo or townhome you love.
The HOA fee looks reasonable. The grounds are maintained. Everything seems to be in good shape.
There’s still one thing I’d want to know before getting too comfortable with those numbers:
How prepared is the HOA for the big expenses coming later?
Colorado just passed a new law aimed at giving buyers in certain new communities a clearer picture.
What Changed in Colorado?
House Bill 26-1099, Protect Financial Condition of Homeowners Associations, became law this year and took effect August 12, 2026.
Under the new law, before a developer turns control of a new planned community or condominium over to its homeowners association, the developer must pay for an independent reserve study.
That study has to look ahead 30 years and estimate what it may cost to maintain, repair, or replace the common property the HOA is responsible for. It also has to be completed by an independent qualified professional without a financial interest in the developer.
Think roofs, siding, private roads, common areas, shared amenities, or other major components the association may eventually need to repair or replace.
That matters because those bills eventually have to be paid somehow.
Why Buyers Should Care About HOA Reserves
Let’s say you’re comparing two condos.
One HOA charges $300 a month.
The other charges $400.
At first glance, the $300 HOA might look like the better deal.
Then you look at the financials.
Maybe the $400 association has been consistently setting money aside for future repairs, while the $300 association has very little saved and a major roof project coming up.
Suddenly, those monthly dues tell a very different story.
If an HOA doesn’t have enough reserves when a large expense comes due, homeowners may face increased dues, a special assessment, or another way of covering the cost.
That’s why I would never judge an HOA solely by whether the monthly fee feels high or low.
I want to know what that fee is paying for and how prepared the association is for what comes next.
What Exactly Is a Reserve Study?
A reserve study looks at the major components an HOA is responsible for and estimates:
How long those components are expected to last
When repairs or replacements may be needed
Approximately what those projects could cost
What financial obligations the association may face over time
Colorado’s new requirement calls for a 30-year projection for qualifying new planned communities and condominiums.
That gives future homeowners another piece of information about the financial condition of the community they are buying into.
And when you think about how long someone may own a condo or townhome, 30 years is a much more useful picture than simply knowing this year’s HOA dues.
There’s an Important Catch
This new law does not mean every HOA in Colorado suddenly has a new 30-year reserve study.
The requirement applies to the developer of a new planned community or condominium before control is transferred from the developer to the HOA.
So if you’re buying into an established community, you still need to do your homework.
And that may be where the most useful part of this conversation comes in.
What I’d Want to See Before Buying Into an HOA
When I’m helping someone look at a property with an HOA, the monthly dues are only one piece of the puzzle.
I’d also want to understand questions like:
How much money does the HOA currently have in reserves?
Does it have a reserve study?
Are any major repairs coming up?
Have there been recent special assessments?
Is another assessment being discussed?
Have dues increased recently?
What exactly does the HOA maintain?
What does the association’s budget look like?
Are there major insurance issues or pending litigation?
You may find an HOA with higher dues that is financially well prepared.
You may find another with attractive low dues and expenses waiting around the corner.
That’s why reading the HOA documents matters.
Colorado Added Another HOA Protection, Too
There’s another part of HB26-1099 worth knowing about.
When a professionally managed HOA changes management companies, the former management company generally has 45 days to turn over the association’s property, records, money, accounts, and required information to the new company or the HOA itself.
That may sound like administrative housekeeping, but good records matter when you own property in a shared community.
Budgets, contracts, bank information, owner records, maintenance history, and other association documents all help an HOA function properly.
The new law creates consequences when a former management company fails to hand those materials over on time.
What This Means for Southwest Colorado Buyers
Condos, townhomes, and HOA communities can make a lot of sense here.
Some buyers want less exterior maintenance. Others are looking for a second home or something they can lock up and leave. Retirees may want to simplify. Buyers may also like the roads, landscaping, snow removal, or amenities an association maintains.
The HOA can be a meaningful part of that lifestyle.
So can its finances.
Before you buy, take time to understand what you’re joining. Read the documents. Look at the budget. Ask about reserves. Find out what projects may be coming.
A reasonable monthly fee is great.
A financially prepared HOA is even better.
The Bottom Line
Colorado’s new law gives buyers in certain new communities more information about the long-term costs their HOA may face.
For everyone else, it’s a good reminder to look beyond the monthly dues.
When you buy into an HOA, you’re also buying into its financial decisions, its responsibilities, and its plans for the future.
If you’re looking at a condo, townhome, or HOA property in Southwest Colorado, I’m happy to help you understand what to look for before you buy.
