Chapter 12 - § 12.8 • UNIT OWNERS

• Jurisdiction: Colorado

§ 12.8 • UNIT OWNERS

The COA does not set out the rights and duties of unit owners, but leaves those matters to the declaration and bylaws, both of which must address matters of particular concern to individual owners. However, a CCIOA statute that applies to pre-existing condominiums for events and circumstances occurring on or after January 1, 2006,³²⁶ requires associations to provide, or cause to be provided, education to owners at no cost on at least an annual basis about the association's general operations and the rights and responsibilities of owners, the association, and its governing board under Colorado law.³²⁷

The COA statute prescribing the contents of declarations was added to the Act effective May 25, 1983, and made applicable to "condominium ownership of property created on or after July 1, 1983."³²⁸ It contains four requirements of special concern to unit owners. It first directs the declaration to include a description or delineation of the boundaries of each condominium unit, including its identifying number.³²⁹ For an owner's rights to be clear, that description needs to be carefully drafted so that there is a clear distinction between each unit and between units and common elements.³³⁰ Next, there must be a description of any limited common elements.³³¹ A "limited common element" is commonly owned property designated in the declaration as reserved for use by fewer than all the owners of individual units.³³² Thus, while the statute on declaration contents does not mention reservation of the use of limited common elements, clearly the declaration must not only identify property as a limited common element, but must state to which units its use is reserved. This is essential to unit owners who presume that property — a patio, balcony, or parking space, for example — is a limited common element reserved to their use. Because a limited common element is commonly owned, it will be open to use by all of its owners if its use is not limited by a reservation. At the same time, the fact that property is reserved for the exclusive use of one owner does not make it a limited common element without the declaration labeling it as such.³³³

Another matter of great concern to owners is their ownership share in the community and their liability for common expenses. The COA requires the declaration to allocate to each unit an undivided interest in the general common elements, a portion of the votes in the association, and a percentage or fraction of the common expenses of the association.³³⁴ These allocations are very important. Three formulas have commonly been used to determine ownership share: (1) an equal ownership share for each unit; (2) a percentage share based on the value of the unit in relation to the value of the whole property; (3) and a percentage based on the size of the unit in relation to the total size of all units. There is no correct formula. The COA does not dictate a particular formula for allocating ownership share. The most commonly used formula is one based on size. Sometimes the ownership share is linked to the voting rights. The COA does not appear to require linkage, and it has been argued that there is no really good reason to link voting rights to ownership share.³³⁵ Even when ownership share is based on size, voting rights are often allocated as one vote per unit, and nothing in the COA appears to proscribe that allocation of voting rights. Liability for common expenses is usually...