2023 Colorado Revised Statutes › Title 38 - PROPERTY - REAL AND PERSONAL (§§ 38-1-101 — 38-53-110) › REAL PROPERTY (§§ 38-30-101 — 38-46-104) › INTERESTS IN LAND (§§ 38-30-101 — 38-34-106) › Article 30 - TITLES AND INTERESTS (§§ 38-30-101 — 38-30-173) › Section 38-30-165 - Unreasonable restraints on the alienation of property - prohibited practices

(1)
Subject to the limitations and exceptions as provided in this section, any person with a security interest in real estate shall not, directly or indirectly:
(a)
Accelerate or mature the indebtedness secured by such real estate on account of the sale or transfer of such real estate or on account of the assumption of such indebtedness; except that this paragraph (a) shall not apply if the person to whom the real estate would be sold or transferred is reasonably determined by the person holding the security interest to be financially incapable of retiring the indebtedness according to its terms, based upon standards normally used by persons in the business of making loans on real estate in the same or similar circumstances; or
(b)
Increase the interest rate more than one percent per annum above the existing interest rate of the indebtedness or otherwise modify, for the benefit of the holder of the security interest, the terms and conditions of the indebtedness secured by such real estate, on account of the sale or transfer of such real estate or on account of the assumption of such indebtedness; or
(c)
Charge, collect, or attempt to collect any fee in excess of one-half of one percent of the principal amount of the indebtedness outstanding, on account of the sale or transfer of such real estate or on account of the assumption of such indebtedness, not including title insurance, abstracting, credit report, survey, or other charges appertaining to the sale; or
(d)
Enforce or attempt to enforce the provisions of any mortgage, deed of trust, or other real estate security instrument executed on or after July 1, 1975, which provisions are contrary to this section; but this section shall not be applicable to instruments executed prior to July 1, 1975, nor to the rights, duties, or interests flowing therefrom.
(2)
The maximum increase allowed in paragraph (b) of subsection (1) of this section and the maximum fee allowed in paragraph (c) of subsection (1) of this section shall not be deemed required, minimum, or ordinary, but said interest increase and fee may, in any case, be less than the amount allowed.
(3)
This section shall be applicable only to a security interest in real property utilized as residential dwelling units other than motels, hotels, and nursing homes.
(4)
This section shall not be applicable in those cases in which the secretary of the department of housing and urban development, or his successor, matures the indebtedness on multiple-family housing projects pursuant to the current law and regulations of the federal housing administration.
(5)
This section shall not be applicable to a person with a security interest in real estate who is not regularly engaged in the business of making real estate loans.
(6)
In the event that the party assuming the indebtedness declines to agree to an increase in the interest rate as provided in paragraph (b) of subsection (1) of this section, said indebtedness may be prepaid without penalty or increased interest at any time within sixty days after said assumption; but if he does not make such prepayment within the sixty-day period he shall be liable for the increased interest rate from the date of the assumption, and any prepayment penalty provided for in the security instrument shall thereafter be in effect.
(7)
The provisions of subsection (1) of this section shall not apply in cases of mortgage loans made on or after January 1, 1981, with proceeds of bonds issued pursuant to article
3
of title
29
, C.R.S.
(8)
The provisions of subsection (1) of this section shall not apply to indebtedness made or acquired by the Colorado housing and finance authority on or after April 1, 1981, secured by real estate, when said authority accelerates or matures, or requires or permits the acceleration or maturing of, indebtedness secured by real estate or when said authority increases, or requires or permits the increase of, the interest rate more than one percent per annum above the existing rate of the indebtedness in accordance with regulations of the Colorado housing and finance authority.
L. 75: Entire section added, p. 1428, § 1, effective July 1. L. 76: (1)(c) amended, p. 315, § 70, effective May 20. L. 81: (8) added, p. 1827, § 1, effective April 2; (7) added, p. 1826, § 1, effective April 30. L. 87: (8) amended, p. 1197, § 20, effective May 20.
For powers of the Colorado housing finance authority, see the "Colorado Housing and Finance Authority Act", part 7 of article 4 of title 29.