Chapter 1 - § 1.3 • FORMS OF COMMON INTEREST OWNERSHIP

• Jurisdiction: Colorado

§ 1.3 • FORMS OF COMMON INTEREST OWNERSHIP

§ 1.3.1—Condominiums

Condominiums are one form of ownership that comes within the definition of "common interest community" and are, therefore, governed by the CCIOA. The CCIOA defines a "condominium" as a common interest community in which portions of the real estate are designated for separate ownership and the remainder is designated for common ownership solely by the owners of the separate ownership portions.¹¹⁵ The definition adds that a common interest community is not a condominium unless the undivided interests in the common elements are vested in the unit owners.¹¹⁶ The Colorado courts agree. In Cherry Hills Resort Development Co. v. Cherry Hills Village,¹¹⁷ the Colorado Supreme Court said that the very definition of a condominium requires the existence of an undivided interest in common elements. The court was interpreting the Condominium Ownership Act, but the same principle applies to the CCIOA.¹¹⁸ Following Cherry Hills, the court in Trailside Townhome Ass'n v. Acierno¹¹⁹ held that a townhome owners association in which the common areas were wholly owned by the association, not co-owned by the individual members of the association, was not a condominium.

The condominium form of ownership is ancient. While a few contractually created condominiums existed in the United States prior to the 1960s, condominium ownership did not become common until after the Federal Housing Administration (FHA) adopted a model act in the 1960s that became the basis for condominium legislation eventually adopted in all 50 states. Like many states, Colorado first enacted such legislation in 1963. That law, known as the "Condominium Ownership Act,"¹²⁰ is a "first generation" law, an embryonic enabling law that provides for creation of condominium regimes.¹²¹ Thus, the condominium form of ownership is considered a creature of statute and subject to the control and regulation of the legislature.¹²² In general, the Condominium Ownership Act no longer applies to condominiums created on or after July 1, 1992.

The CCIOA definition describes the condominium concept, as have many courts, as a "merger" of estates: fee simple ownership in a unit and tenancy in common in the common elements. As the Texas Supreme Court said:

A condominium is an estate in real property consisting of an undivided interest in a portion of a parcel of real property together with a separate fee simple interest in another portion of the same parcel. In essence, condominium ownership is the merger of two estates in land into one: the fee simple ownership of an apartment or unit in a condominium project and a tenancy in common with other co-owners in the common elements.¹²³

Many courts have agreed with that description.¹²⁴ One commentator, however, has remarked that common elements have unusual aspects that distinguish them from tenancy-in-common or joint tenancy: (1) common ownership in a condominium prohibits owners from separating the interest in the common elements; (2) the interest need not be created in a single instrument; and (3) owners have no right of survivorship.¹²⁵ These attributes, the author concludes, are a feature of concurrent ownership distinctive to condominiums.

§ 1.3.2—Cooperatives

The CCIOA encompasses cooperatives within the meaning of "common interest community" and cooperatives are, therefore, subject to the Act's regulation. The Act defines "cooperative" as a "a common interest community in which the real property is owned by an association, each member of which is entitled by virtue of such member's ownership interest in the association to exclusive possession of a unit."¹²⁶

Colorado has six statutes governing cooperative housing corporations. It first needs to be noted...