Colorado HB26-1099: Developers Must Pay for a Reserve Study
Quick answer: Colorado HB26-1099 requires the developer (the declarant) of a planned community or condominium to commission and pay for an independent, 30-year reserve study before control of the association transfers to the owners. The declarant must hand the study over with the other association property at turnover, and the association must then make it available to owners. The law also gives associations a 45-day deadline, with daily penalties, to get their records back from a former management company. HB26-1099 was signed in April 2026 and took effect August 12, 2026.
For owners buying into new Colorado communities, this closes a long-standing gap. Too many boards took over from a developer with no idea what the roofs, roads and pools would cost to replace. Here's what the law requires, what didn't make it into the final version, and what a new board should do at turnover.
What HB26-1099 requires
| Requirement | Who | When | Where in the law |
|---|---|---|---|
| Commission and pay for a reserve study | Declarant (developer) | Before transfer of control to the association | New C.R.S. 38-33.3-209.2 |
| Study projects costs over 30 years for the common elements the association will maintain, repair or replace | Reserve study professional | Before transfer of control | C.R.S. 38-33.3-209.2 |
| Study done by an independent professional (industry knowledge, no business relationship with the declarant, not an affiliate) | Declarant chooses; professional must qualify | Before transfer of control | C.R.S. 38-33.3-209.2 |
| Deliver the reserve study with the other association property | Declarant | Within 60 days after owners elect a board majority | C.R.S. 38-33.3-303 |
| Make the most recent reserve study available to owners | Association | Within 90 days after taking control, then annually | C.R.S. 38-33.3-209.4 |
| Return all association property, records, money and accounts | Former management company | Within 45 days after the contract ends, at no charge | C.R.S. 38-33.3-317 |
These cites come from the enrolled bill and the Colorado Division of Real Estate's summary. Confirm the final codified wording with the statute / your attorney.
The reserve study: developer pays, independent professional prepares
The heart of the bill is simple. Before the developer hands the association to the owners, the developer must pay for a reserve study. The owners don't pay for it through their assessments.
The study has to meet three conditions:
- It covers 30 years. It projects the cost of maintaining, repairing and replacing the common elements and property the association is responsible for.
- It's independent. The professional must know industry standards, must have no business relationship or financial interest with the declarant, and can't be an affiliate of the declarant.
- It goes to the association at turnover. It's delivered within 60 days after the owners elect a majority of the board, along with the other association property.
For a board, that study becomes the baseline for the first owner-controlled budget. If your first budget's reserve contribution doesn't match the study, you'll want a reason in the minutes.
What didn't survive: the 1.5 percent deposit
Early coverage of HB26-1099 described a requirement that developers deposit an amount equal to 1.5 percent of full reserve funding into the association's reserve account at turnover. The enrolled (signed) bill doesn't include that deposit. The final law requires the developer to pay for the study, not to seed the reserve fund. If you read about the 1.5 percent figure elsewhere, it came from an earlier version of the bill.
Your declaration or purchase contracts may still require working-capital or reserve contributions at closing. That's separate from HB26-1099. Check your governing documents.
The 45-day records rule for management companies
HB26-1099 also addresses a different transition: switching management companies. When a management contract ends, the former company must deliver all association property within 45 days, at no charge. That includes:
- bank accounts and money;
- financial records;
- insurance policies and contracts;
- keys, passwords and online accounts.
If the company is late, it's liable for:
- $250 for each business day it fails to comply;
- interest and late fees the association incurred because of the delay;
- treble actual damages plus attorney fees and court costs, if the violation is willful.
That gives boards real leverage when a former manager drags its feet. Put the 45-day deadline in your termination letter and keep a dated log of what has and hasn't come back.
Who it applies to
The reserve study requirement applies to planned communities and condominiums governed by the Colorado Common Interest Ownership Act (CCIOA) when the declarant transfers control to the association. The law took effect August 12, 2026. Commentators have noted it isn't retroactive for communities where turnover already happened. If your community is mid-development, ask your attorney how the effective date applies to your turnover.
The management-company rule applies to any CCIOA association that ends a management contract.
A turnover checklist for new Colorado boards
- Ask for the reserve study early. Don't wait for the 60-day turnover deadline. Request a copy and the preparer's independence disclosure as soon as the transition starts.
- Check the study's scope. Make sure it covers every common element the association will maintain: roofs (for condos), roads, drainage, fencing, amenities.
- Compare the study to the developer's budget. Developer budgets often understate reserves to keep assessments low during sales. The study will show the gap.
- Build the first owner budget from the study. Our HOA master budget guide walks through setting reserve contributions alongside operating costs.
- Plan the update cycle. HB26-1099 doesn't set an update schedule after turnover, so adopt one in your reserve policy. For comparison, see how Washington handles it in our RCW 64.90.545 reserve study post.
- Separate reserve cash from operating cash. See how much cash to keep in your operating account.
- Distribute the study to owners within 90 days after taking control, and after each fiscal year, as the disclosure rules require.
For running the turnover meeting where owners elect their first board, see HOA Board Minutes' guide on how to run an HOA annual meeting.
Where Dynamite fits
Dynamite Management handles the financial side for Colorado associations: the first owner-controlled budget, reserve schedules built from the developer's study, and getting records back from a prior manager. If your board is self-managing after turnover, HOA Fiscal's guide to self-managing an HOA covers the rest. Talk to us about backend financial management.
This is not legal advice. Confirm how HB26-1099 applies to your community with the enacted statute and your association's attorney.
FAQ
Who pays for the reserve study under Colorado HB26-1099? The declarant (developer) must commission and pay for it before control transfers to the association.
Does HB26-1099 require developers to fund the reserves? No. An earlier version proposed a deposit of 1.5 percent of full reserve funding, but the signed bill requires the developer to pay for the study, not to fund the reserve account.
When did HB26-1099 take effect? August 12, 2026.
How long does a former management company have to return records? 45 days after the contract ends, at no charge. Late companies owe $250 per business day, and treble damages plus attorney fees if the violation is willful.
Does the reserve study have to be independent? Yes. The professional must know industry standards, have no business relationship or financial interest with the declarant, and not be an affiliate of the declarant.