Chapter 10 - § 10.2 • USE AND OCCUPANCY RESTRICTIONS
| Jurisdiction | Colorado |
§ 10.2.1—Residential and Single-Family Restrictions
Common interest communities usually have restrictions on the use and occupancy of units. The most common of these restrictions is one that limits units to "residential" use. The documents may also bind units to "single-family" use, limit the number of persons who may reside in a unit, or regulate guest occupancy.82 A Colorado statute that is not part of the CCIOA says that all restrictions as to the use or occupancy of real property must be strictly construed.83 The statute is consistent with long-standing principles of Colorado law.84 Many of the terms associated with use and occupancy restrictions are identical or similar to those used in zoning law, and definitions employed in that body of law may be helpful in interpreting these restrictions.85
A great many covenants use the term "single-family." How they do so will determine its effect. The phrase "single-family dwelling" alone relates only to the type of construction permitted.86 Therefore, operation of a residence as a bed and breakfast did not violate a covenant limiting use of lots to "one detached single-family dwelling, and a private garage for not more than two cars."87 That limitation would, however, prohibit multi-family dwellings.88 On the other hand, "use for private single family residential purposes" restricts use to a "single family," and it cannot be interpreted to restrict only the nature of the physical structure.89 The Colorado Supreme Court took up the language in Buick v. Highland Meadow Estates at Castle Peak Ranch, Inc.90 The covenant in that case stated that all lots had to be used "exclusively for single-dwellings." The court agreed with the trial judge that the language restricted the use of the lots, not just the type of structures that could be built on them. The court went on to hold that since the covenant served as a use restriction, a road across the property violated that restriction when, rather than serve a single-family residence on the lot, it provided access to another parcel of land. That use, concluded the court, was not consistent with the language of the use restriction.
Many covenants include the word "residential." The CCIOA defines "residential use" to mean use for dwelling or recreational purposes; the phrase does not include spaces or units primarily used for commercial income from, or service to, the public.91 One early Colorado Supreme Court decision held that "private residence purposes" means for "one man and his family" and would prohibit duplexes or any structures for two or more families.92 A more recent opinion defined "residential" to mean "used, serving, or designed as a residence or for occupation by residents" and "residence" to mean "the act or fact of abiding or dwelling in a place for some time; an act of making one's home in a place."93 Under those definitions, the court found that mere temporary or short-term rental use of a residence did not preclude that use from being residential.94
When use is limited to "residential purposes," a "home office" may be allowed as long as the owner does not have clients, customers, or employees enter the home,95 and sharing a home with elderly others who pay room and board may be allowed.96 In contrast, a ban on business or commercial use may prohibit any income-producing activity at all.97
Common interest communities often want to prevent what are variously known as trailer, mobile, modular, or manufactured homes from being located on the property. Whether they are successful depends in large part on the language in the documents. A Colorado appellate court confronted this matter in Holiday Acres Property Owners Ass'n v. Wise.98 The community had a protective covenant reading: "No trailer, camper, mobile home, or motor home shall be used at any time as a permanent residence except use of a trailer, camper, mobile home or motor home may be permitted during the above mentioned one year period permitted for construction and, in addition, may be used for periods of vacation use, but total vacation usage by any one owner may not exceed six (6) months in any calendar year." Several lot owners wanted to move double-wide mobile homes onto their properties. A general partner of the development corporation, who was also the sole member of the architectural committee, told the owners that double-wide modular homes were permitted under the covenants as long as they were permanently attached to a foundation, and noted that there were already "numerous" homes of that type in the community. After the lot owners began construction of double-wide mobile homes on their lots, other property owners formed an association and then sought an injunction, arguing the "mobile homes" violated the protective covenants. The court concluded the term "mobile home" is ambiguous "as to whether it includes all types of factory built housing." The court went on to find the association was estopped from enforcing the protective covenants. It did not explain why, after it found ambiguity, it did not "strictly construe" the covenants against the association and hold that those covenants were not violated, rather than invoke estoppel.
One of the most controversial issues to confront courts is whether associations can prevent "group homes" from being located in their communities. The Colorado Supreme Court addressed the issue in Double D Manor, Inc. v. Evergreen Meadows Homeowners' Ass'n.99 In that case, the appellant placed seven developmentally disabled children in two single-family houses in the community. The appellant had a state license to operate these homes as "residential child care facilities." The community had a covenant that read: "All sites shall be for residential use only, with only one single-family dwelling permitted on any site." The court concluded that the covenant, as written, restricted only the type of structure, requiring "single-family dwellings." It was not a use restriction, but even if it were, said the court, the court had previously held that a married couple and a maximum of six developmentally disabled children would constitute a family under the terms of a municipal zoning ordinance in an area zoned for one-family dwellings. Next, the court considered whether a home for developmentally disabled children was a "residential use," as required by the covenants. The association argued the home was a business because the appellant earned money from its operation to pay employees' wages and other costs to maintain the operation. However, the court responded that receiving funding and paying a staff to supervise and care for the children did not transform the use of the facilities from residential to commercial. Thus, use of the property did not violate the residential use requirement of the covenant. Finally, in what is probably dicta, the court found support for its decision in several statutes that it said evidenced a state policy "to assist developmentally disabled individuals to live in normal residential surroundings" and allow them to "live in homes in residential surroundings."
Double D Manor was preceded by two decisions of the Colorado Court of Appeals. In one, the court found that a group home for the developmentally disabled did not violate a covenant prohibiting buildings other than single-family dwellings from being "erected, altered, placed or permitted to remain on any site."100 The restriction was on the nature of the structures that could be erected, "not a restriction upon the use to which those structures could be put."101 The court said that if those who drafted the covenant had wanted to limit the relational status of the persons pursuing "residential uses" in the dwellings, they could have done so. In the second case, the covenant precluded building sites from being "improved, used or occupied for any purpose other than private single family residential purposes."102 The appellee operated its property as a group home for eight developmentally disabled persons. The court said the covenant restricted the property to use by a "single family" and could not be...
To continue reading
Request your trial