Chapter 1 - § 1.4 • DEFINITIONS
| Jurisdiction | Colorado |
The CCIOA includes a lengthy list of definitions that apply to the declaration and bylaws of a common interest community association "unless specifically provided otherwise or unless the context otherwise requires."137 Many of the CCIOA definitions are taken directly from the Uniform Act, in which case applicable commentary from the Uniform Act is discussed below.
The CCIOA includes definitions for 10 terms that are not defined by the Uniform Act. These are: (1) "approved for development," (2) "bylaws," (3) "horizontal boundary," (4) "large planned community," (5) "map," (6) "phased community," (7) "plat," (8) "rules and regulations," (9) "vertical boundary," and (10) "xeriscape." There are three definitions in the Uniform Act that were not adopted by the CCIOA. The first is "conversion building,"138 which is used in connection with a consumer protection statute that Colorado also did not adopt.139 Similarly, the CCIOA does not include a definition of "offering," a term in the Uniform Act that facilitates its purchaser protections.140 Finally, the Uniform Act defines "time share,"141 but the CCIOA does not. It also does not directly regulate time shares, although presumably any time share that meets the definition of a common interest community comes under the Act.142 The term "time share estate"143 is defined in the Condominium Ownership Act,144 which at this time contains the only direct statutory regulation of time shares,145 other than the statute on timeshare estate foreclosures added in 2008,146 and the Subdivision Developer Registration Statute.147
The following are the definitions that the CCIOA has adopted:
"Affiliate of a Declarant"
"Affiliate of a declarant" means any person who controls, is controlled by, or is under common control with a declarant. A person controls a declarant if the person: Is a general partner, officer, director, or employee of the declarant; directly or indirectly, or acting in concert with one or more other persons or through one or more subsidiaries, owns, controls, holds with power to vote, or holds proxies representing more than twenty percent of the voting interests of the declarant; controls in any manner the election of a majority of the directors of the declarant; or has contributed more than twenty percent of the capital of the declarant. A person is controlled by a declarant if the declarant: Is a general partner, officer, director, or employee of the person; directly or indirectly, or acting in concert with one or more other persons or through one or more subsidiaries, owns, controls, holds with power to vote, or holds proxies representing more than twenty percent of the voting interests of the person; controls in any manner the election of a majority of the directors of the person; or has contributed more than twenty percent of the capital of the person. Control does not exist if the powers described in this subsection (1) are held solely as security for an obligation and are not exercised.148
This definition is nearly identical to the one in the Uniform Act.149 The definition is significant because three CCIOA statutes directly include affiliates of declarants within rights or requirements placed on declarants.150 A comment to the Uniform Act notes that the definition is similar to definitions in other statutes, a definition concerning regulation of savings and loan holding companies, and another definition defining persons deemed associated with a broker or dealer for purposes of federal securities laws.151 Thus, those statutes may prove useful in interpreting the CCIOA definition. The comment also says that under the definition, there are some circumstances in which an association may be considered a declarant.152
"Allocated Interests"
"Allocated interests" means the following interests allocated to each unit: (a) In a condominium, the undivided interest in the common elements, the common expense liability, and votes in the association; (b) In a cooperative, the common expense liability and the ownership interest and votes in the association; and (c) In a planned community, the common expense liability and votes in the association.153
This definition is taken verbatim from the Uniform Act.154 The commentary to the Uniform Act says that the term refers to all of the interests a declaration must allocate to common interest communities.155 It notes the difference between the required allocation for condominiums and either cooperatives or planned communities. In cooperatives or planned communities, common elements are owned by the association, so no common element interest is allocated to unit owners. Because the owners in a cooperative traditionally have an ownership interest in the cooperative corporation through stock or a membership certificate, allocation of an "ownership interest in the association" to each unit is required.
"Approved for Development"
"Approved for development" means that all or some portion of a particular parcel of real property is zoned or otherwise approved for construction of residential and other improvements and authorized for specified densities by the local land use authority having jurisdiction over such real property and includes any conceptual or final planned unit development approval.156
This is one of the terms not defined in the Uniform Act. It appears only once in the CCIOA.157
"Association"
"Association" or "unit owners' association" means a unit owners' association organized under section 38-33.3-301.158
This definition is identical to the one in the Uniform Act.159 Note that under the CCIOA, an organization is not an "association" merely because it takes the name. It must meet the statutory requirements of C.R.S. § 38-33.3-301.160 That statute requires an association to be organized as a nonprofit, not-for-profit, or for-profit corporation or as a limited liability company in accordance with Colorado laws, although an association's failure to incorporate or organize as a limited liability company does not adversely affect either the existence of the common interest community for purposes of the CCIOA or the rights of persons acting in reliance on that existence other than as specifically provided in the statute concerning liens for assessments.161 The statute also requires that membership in an association must consist exclusively of all unit owners.
"Bylaws"
"Bylaws" means any instruments, however denominated, which are adopted by the association for the regulation and management of the association, including any amendments to those instruments.162
The Uniform Act does not define bylaws. The CCIOA requires that associations have bylaws addressing certain prescribed topics.163
"Common Elements"
"Common elements" means: (a) In a condominium or cooperative, all portions of the condominium or cooperative other than the units; and (b) In a planned community, any real estate within a planned community owned or leased by the association, other than a unit.164
This definition is similar to the one in the Uniform Act except that it omits a phrase reading: "in all common interest communities, any other interests in real estate for the benefit of unit owners which are subject to the declaration."165
Cases have considered whether specific items such as stairways,166 underground storage tanks,167 air space,168 cable systems,169 a swimming pool and club house,170 a sewage treatment plant and pavement,171 and even "common benefits,"172 are common elements. A comment to the Uniform Act says the definitions of "common elements" and of "units" should be examined in conjunction with the provision that defines unit boundaries,173 also in the CCIOA.174 It adds that an exhaustive list of those items comprising common elements is unnecessary, and declarations need not include an in-depth list as long as boundaries between units and common elements may be determined with reasonable certainty because, by definition, "common elements" include all of the real estate in a condominium or cooperative not designated as part of any unit.175
Another comment to the Uniform Act addresses real estate owned or leased by the association that is subject to the declaration and real estate not subject to the declaration.176 In a planned community, says the comment, if that real estate is subject to the declaration, it meets the definition of a common element, but if it is not within the planned community, title may be held by the association and it is not a common element unless the declaration is amended to make it part of the real estate subject to the declaration. The practical effect of the distinction is that generally real estate that is not a common element may be taxed notwithstanding the rule that the common elements may not be separately taxed.177 Also, if property is not a common element, it may be bought and sold by the association without observing the requirements for conveying or encumbering common elements.178
A Colorado Supreme Court decision creates some confusion about the meaning of "common elements."179 In the case, a condominium was created and a single parking space was conveyed appurtenant to each condominium unit. Ten spaces were unassigned. Under the declaration, only the developer could sell those spaces to non-unit owners. The developer sold one of the unassigned spaces to a unit owner. It was eventually sold to a partnership that was not a unit owner, and for over 20 years, one of the partners used the space. When the partnership attempted to sell the space to another non-unit owner, the association objected that the sale would violate the declaration. The partnership filed a quiet title action claiming fee simple ownership of the space by adverse possession. The trial court decided the partnership owned the space in "unrestricted fee simple" and could convey it to a third-party non-condominium owner. In other words, the space was not subject to the declaration restriction. The Colorado Supreme...
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