HB26-1099 Reinforces a Simple Truth: HOA Records Belong to the Association

Colorado’s 2026 legislative session brought a significant update for community associations with the passage of House Bill 26-1099, Protect Financial Condition of Homeowners Associations. Much of the early attention around the bill has focused on reserve studies for new communities transitioning from declarant control, and for good reason. Long-term financial planning is one of the most important responsibilities in association governance.

However, another part of the bill deserves just as much attention from boards, managers, and management companies.

HB26-1099 makes it clear that when an association changes management companies, the outgoing management company must timely turn over the association’s records, funds, information, and property. This should not be controversial. It should be a basic part of a professional business transition.

The central question for every HOA board and management company is simple: Are association records being treated as association property, or are they being treated as leverage?

What HB26-1099 Requires for New Communities

HB26-1099 adds an important financial planning requirement for new planned communities and condominium associations before transition from declarant control.

Under the bill, the declarant must obtain and pay for a reserve study before transfer of control to the association. The reserve study must estimate the projected cost of maintaining, repairing, or replacing the common elements or association property over a 30-year period.

The study must be prepared by an independent reserve study professional or another qualified professional with knowledge of industry standards. The professional must not have a financial interest in, affiliation with, or business relationship with the declarant beyond being retained to perform the reserve study.

Before transition, the declarant must provide a copy of the reserve study to the association.

For new Colorado communities, this is a meaningful step toward better financial transparency. Boards taking control from a declarant should not be left guessing about roofs, pavement, fencing, mechanical systems, drainage, amenities, or other major common element expenses. A reserve study gives the incoming board a starting point for informed budgeting and long-term capital planning.

The Often Overlooked Part of the Bill: Management Company Turnover

While the reserve study requirement is important, HB26-1099 also addresses a practical issue that many associations experience during management transitions.

When an association changes management companies, the former association management company must deliver the association’s property and records to the new management company or directly to the association within 45 days.

This includes association property, records, money, accounts, information, and other association materials identified in the law.

The bill also states that this turnover must be completed at no charge to the association unless otherwise agreed in writing.

That requirement reflects a principle that should already guide the community association management industry:

The records do not belong to the management company. They belong to the association.

Association Records Should Never Be Held Hostage

A management transition should be handled as a professional business transaction, not as a standoff.

When a contract is not renewed, terminated, or canceled, the outgoing management company may be disappointed. There may be disagreement over performance, expectations, unpaid invoices, personality conflicts, communication issues, or board decisions. Even so, association records, funds, login credentials, financial information, contracts, owner ledgers, vendor records, insurance information, and governance documents should never be held back as leverage.

The association’s operations continue after the management relationship ends.

Homeowners still need responses. Bills still need to be paid. Insurance questions still need to be answered. Vendors still need direction. Board members still need accurate records to make decisions. Assessments still need to be processed. Compliance matters, maintenance issues, financial reporting, and legal deadlines do not pause because a management contract ended.

Holding records back harms the association, the board, the homeowners, and often the reputation of the management industry as a whole.

The Penalties Are Significant

HB26-1099 gives this requirement real consequences.

If the former management company fails to timely return the association’s property and records, the company may be required to pay the association $250 for each business day after the 45-day turnover period.

The former management company may also be liable for interest and late fees on late payments made by the association because of the failure to turn over records, along with other damages incurred by the association.

If a court finds that the violation was willful, the consequences become more serious. A willful violation may subject the former management company to three times the association’s actual damages, plus reasonable attorney fees and court costs.

That is a significant statutory warning to the industry.

Boards should not have to chase their own records. New managers should not have to rebuild an association file from fragments. Homeowners should not suffer operational disruption because a former management company failed to provide what already belonged to the association.

Why This Matters for Colorado HOA Boards

For Colorado HOA boards, this law reinforces the importance of contract oversight and transition planning.

A board should understand where association records are stored, who controls access, how financial accounts are managed, how owner records are maintained, and what the association would need if it changed management companies.

This does not mean boards should operate from a place of distrust. It does mean boards should operate from a place of governance responsibility.

A healthy board-management relationship includes transparency. The association should always have a clear understanding of its records, accounts, vendors, contracts, insurance information, governing documents, meeting records, financial reports, owner ledgers, maintenance history, and digital access points.

The board has a fiduciary responsibility to protect the association’s interests. That includes making sure the association is not overly dependent on any one individual, company, platform, or undocumented process.

Best Practices for a Smooth Management Transition

A management transition does not need to be adversarial. In most cases, it can and should be orderly, professional, and respectful.

Boards can help protect the association by making sure the management agreement clearly addresses transition expectations. This includes timelines, records to be transferred, financial account access, software access, owner information, vendor information, open projects, pending violations, insurance records, legal files, meeting minutes, contracts, reserve study materials, bank records, and communication history.

Outgoing management companies should maintain organized records throughout the relationship, not just at the end of the contract. A clean transition is much easier when records are already accurate, complete, and accessible.

Incoming management companies should provide a clear transition checklist and communicate what is needed to maintain continuity. The goal should be to reduce disruption for the board and homeowners.

Most importantly, all parties should remember that the association is the client. The transition should be centered on protecting the association’s operations, finances, and homeowners.

Operational Responsibility Versus Strategic Governance

HB26-1099 connects two important themes: financial planning and operational accountability.

The reserve study requirement is strategic. It helps new associations understand long-term financial obligations before they are fully controlled by homeowners.

The management turnover requirement is operational. It helps ensure that associations can continue functioning when a management relationship changes.

Both matter.

A board cannot govern well without reliable financial information. A management company cannot serve well without respecting the association’s ownership of its records and property. A new manager cannot step in effectively if essential records are delayed or incomplete.

Strong association governance requires both long-term planning and clean day-to-day operations.

A Professional Standard for the Industry

The community association management industry should embrace this part of HB26-1099 as a professional standard, not merely a legal requirement.

A management company’s professionalism is not only measured by how it begins a client relationship. It is also measured by how it ends one.

When a management contract is not renewed, the outgoing company should provide the association’s records promptly, completely, and professionally. That is not just compliance. It is respect for the association, the board, the homeowners, and the industry.

The best management companies understand that records, funds, and association property are held in service to the client. They are not bargaining chips. They are not company assets. They are not tools for delay.

They belong to the association.

Colorado HOA Takeaway

HB26-1099 is an important reminder for Colorado associations, declarants, boards, and management companies.

For new communities, transition from declarant control should include meaningful reserve planning so boards are not handed responsibility without the financial information needed to govern responsibly.

For management transitions, association records and property must move promptly and professionally. A change in management should not jeopardize the association’s operations, finances, or access to its own information.

At Colorado Community Management, we believe transitions should be handled with transparency, organization, and respect for the association’s ownership of its records. Boards deserve clear information, accurate accounting, and professional support before, during, and after any management change.

That is part of what we mean by Elevated Management – Earned Trust.

This article is provided for general educational purposes and should not be considered legal advice. Boards should consult qualified legal counsel regarding how HB26-1099 applies to their specific association, governing documents, contracts, and circumstances.