Chapter 12 - § 12.2 • THE COLORADO COMMON INTEREST OWNERSHIP ACT AND PRE-EXISTING CONDOMINIUMS

• Jurisdiction: Colorado

§ 12.2 • THE COLORADO COMMON INTEREST OWNERSHIP ACT AND PRE-EXISTING CONDOMINIUMS

§ 12.2.1—Applicability of Act to Pre-existing Condominiums

The Colorado Common Interest Ownership Act (CCIOA), effective July 1, 1992, is a "comprehensive, and uniform framework for the creation and operation of common interest communities,"¹⁴ based on the Uniform Common Interest Ownership Act. It applies to all common interest communities created within Colorado¹⁵ on or after July 1, 1992,¹⁶ while the Condominium Ownership Act does not apply to any common interest communities created on or after July 1, 1992. However, a number of CCIOA statutes apply to preexisting condominiums. Some govern all common interest communities created in Colorado before July 1, 1992, "with respect to events and circumstances occurring on or after July 1, 1992,"¹⁷ while others are made applicable to all common interest communities created in Colorado before July 1, 1992, "with respect to events and circumstances occurring on or after January 1, 2006."¹⁸

Additionally, certain provisions of the CCIOA statute on meetings apply to all common interest communities created in Colorado before July 1, 1995, and apply to all meetings of an executive board or any committee of the board occurring on or after that date.¹⁹ A provision requiring associations to adopt policies, procedures, and rules and regulations regarding reserve studies now applies to all common interest communities created within Colorado before July 1, 1992, "with respect to events and circumstances occurring on or after July 1, 2010."²⁰ A statute requiring governing boards to deliver a summary of the budget to all the unit owners and to set a date for a meeting of the unit owners to consider the budget applies to all common interest communities created within Colorado before July 1, 1992, with respect to events and circumstances occurring on or after July 1, 2017.²¹ Finally, notwithstanding any other provision of law, the CCIOA statute regarding construction defect actions²² applies to all common interest communities created within the state on, before, or after July 1, 1992, with respect to events and circumstances occurring on or after September 1, 2017.²³

A key aspect of the provisions applying CCIOA statutes to pre-existing communities is that they must be "common interest communities." The Act defines them as "real estate described in a declaration with respect to which a person, by virtue of such person's ownership of a unit, is obligated to pay for real estate taxes, insurance premiums, maintenance, or improvement of other real estate described in a declaration."²⁴ While a common interest community is, therefore, defined by the existence of a mandatory obligation or servitude imposed on individual owners to pay for common elements of the community, the Colorado Supreme Court has said that it does not follow that a community is not a common interest community because the original covenants do not impose a servitude to pay assessments. There is no requirement that the obligation to pay or servitude that defines a community as a common interest community must be made express in the covenants or in an owner's deed. Thus, in Evergreen Highlands Ass'n v. West,²⁵ the court decided that the obligation to pay assessments could be implied from the various documents that made up the "declaration"²⁶ because those documents made clear that a homeowners association existed, that it owned and maintained common area, and that it had the power to impose annual membership or use fees on owners. These documents, which collectively formed the declaration,²⁷ were sufficient to create a common interest community by implication. In Pulte Home Corp. v. Countryside Community Ass'n,²⁸ the Colorado Supreme Court emphasized that use of the word "declaration" in a document does not make it a declaration for purposes of the CCIOA. The court then focused on the phrase "that create a common interest community" in the statutory definition. No declaration exists, said the court, until some combination of recorded documents, taken together, creates a common interest community. A "common interest community," noted the court, requires that an obligation to pay for various expenses associated with common property be established and that the obligation attach to individually owned property. Thus, where a declaration of covenants, conditions and restrictions established an obligation to pay for common element maintenance, but did not attach that obligation to any property at the time it was recorded, it was not, by itself, the statutory declaration.

This chapter is concerned with condominiums governed by the Condominium Ownership Act, but many of the CCIOA statutes that are applicable to pre-existing condominiums are discussed, or at least mentioned, below where pertinent. However, this chapter does not attempt to discuss every CCIOA statute that may apply. They are listed elsewhere,²⁹ and the reader should consult that list to determine if there is a statute that could apply to an issue concerning a condominium formed before...