Chapter 12 - § 12.4 • THE DECLARATION
| Jurisdiction | Colorado |
§ 12.4.1—Generally
The declaration is usually considered to be the document that creates a condominium.52 Courts and commentaries have said the declaration has the characteristic of a constitution.53 It is also said that it defines "the character, duration, rights, obligations, and limitations of condominium ownership."54 The declaration is sometimes deemed a con-tract,55 although its benefits and burdens have been characterized as founded in property, not contract, law,56 and a Florida court described the declaration as
more than a mere contract spelling out mutual rights and obligations of the parties thereto — it assumes some of the attributes of a covenant running with the land, circumscribing the extent and limits of the enjoyment and use of real property. Stated otherwise, it spells out the true extent of the purchased, and thus granted, use interest therein.57
While the declaration in general may be viewed as a covenant running with the land,58 it appears that not every clause necessarily has that character.59
Unfortunately, the COA has little to say about the declaration. It does state that the declaration "defines the character, duration, rights, obligations, and limitations of condominium ownership."60 That implies, but does not explicitly state — as do many state condominium acts — that recording a declaration creates the condominium. The Colorado Supreme Court has said that the "operative documents" of an association — one of which would be the declaration — give rise to both tort and contract obligations.61
Some elemental rules of contract construction have been applied to declarations. For example, if there are inconsistent declaration clauses, a specific clause will prevail over a general one.62 Ambiguity will usually be construed against a declaration's author63 or a party seeking to enforce the declaration.64 On the other hand, courts have said that when there is no ambiguity, the court should not go beyond the declaration,65 or employ parol evidence,66 but rather should give full force to the declaration's plain and clear language. Words of common usage should be construed in their plain and ordinary sense.67 Finally, courts have said declarations should be strictly enforced,68 and construed to assure that "what the buyer sees the buyer gets."69
The COA addresses half of a sticky problem by stating that if the declaration provides for disposition of condominium units in the event of the destruction or obsolescence of buildings in which those units are located and restricts partition of the common elements, the rule against perpetuities and the rule prohibiting unlawful restraints on alienation are not to be applied to defeat or limit any of those provisions. The CCIOA — and the legislation of many other states70 — has a broader provision under which the rule against perpetuities does not apply to defeat any provision of the declaration.71
The COA also contains a curious provision under which, if a declaration
• requires that all condominium unit owners must be members of an association or corporation;
• provides for the payment of charges assessed by the association on condominium units; or
• provides for appointment of an attorney-in-fact to deal with the property on its destruction or obsolescence
those provisions are considered covenants running with the land — notwithstanding any rule of law to the contrary — binding on all owners and their successors in interest, and any common law rule terminating agency on death or disability of a principal will not be applied to defeat or limit them.72 What makes this statement odd is that for a condominium to function, it is essential for all owners to belong to the governing organization, usually called an association, and to pay any assessments levied by that organization. Under most condominium acts, the owners must belong to the governing association and must pay its assessments.73
The Colorado Supreme Court has made the curious statement more enigmatic. The court said that under the COA, if a declaration requires all condominium unit owners to be members of an association or corporation, then the declaration is a covenant running with the land.74 Presumably, the court would say the same if either of the other two statutory conditions were found in a declaration. However, the court may have misread the statutory language. The COA provision says that to the extent that a declaration contains one of the three statutory conditions, "the same shall be considered as covenants running with the land."75 What is the antecedent of "the same?" Is it the declaration? Clearly, the court thought so. However, a plausible argument could be made that "the same" refers to the three conditions. In other words, if the declaration contains one of those three conditions, that condition becomes a covenant running with the land. If that is not the case, why does the statute use the plural: "covenants running with the land"? If "the same" referred to the declaration, would the statute not say "the same shall be considered as a covenant running with the land"? However reasonable this interpretation might be, it is not that of Colorado's highest court.
§ 12.4.2—Recording
The COA requires the declaration to be recorded in the county where the condominium property is located.76 The declaration must provide for the filing for record of a map properly locating condominium units. After the declaration is recorded, an instrument affecting a condominium unit may legally describe it by identifying the condominium unit number or symbol as shown on that map. When a unit purchaser receives a deed stating that the conveyance is expressly subject to the terms, conditions, duties, and obligations imposed by a previously recorded declaration, he or she has constructive notice of the provisions of the declaration, and that declaration becomes binding on the buyer when he or she acquires ownership of the unit.77
§ 12.4.3—Declaration Contents
The COA78 requires declarations to contain:
• The name of the condominium property, which must include the word "condominium" or be followed by the words "a condominium";79
• The name of every county in which any part of the condominium property is situated;80
• A legally sufficient description of the real estate included in the condominium property;81
• A description or delineation of the boundaries of each condominium unit, including its identifying number;82
• A statement of the maximum number of condominium units that may be created by the subdivision or conversion of units in a multiple-unit dwelling owned by the declarant;83
• A description of any limited common elements;84
• A description of all general common elements;85
• A description of all general common elements that may be conveyed to any person or entity other than the condominium unit owners;86
• A description of all general common elements that may be allocated subsequently as limited common elements, together with a statement that they may be so allocated, and a description of the method by which the allocations are to be made;87
• An allocation to each condominium unit of 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;88
• Any restrictions on the use, occupancy, or alienation of the condominium units;89
• The recording data for recorded easements and licenses appurtenant to, or included in, the condominium property or to which any portion of the condominium property is or may become subject;90
• Reasonable provisions concerning the manner in which notice of matters affecting the condominium property may be given to condominium unit owners by the association or other condominium unit owners;91 and
• Any other matters the declarant deems appropriate.92
One other requirement that only applies to residential condominiums is that the administration and operation of multi-unit condominiums is to be "governed by the declaration," unless exempted.93 A great deal is left to interpretation here. The COA does not define "administration and operation," nor does it explain what an exemption is or how one is invoked. Assuming "administration and operation" is a phrase meaning governance, the COA nonetheless requires many governance issues to be addressed in the bylaws.
§ 12.4.4—Omissions
The language of the COA is very clear. The declaration "shall contain" the elements discussed above.94 Unlike some condominium acts,95 the COA does not explicitly require a declaration of intent to create a condominium, but it does say the declaration must contain the "name of the condominium property, which shall include the word 'condominium' or be followed by the words 'a condominium.'" What happens if the word "condominium" is left out of the declaration? There are decisions from other jurisdiction holding that failure to make a proper declaration of intent or use the "magic words" prevents a project from being governed by the applicable condominium act.96 The Oregon Supreme Court said in an early condominium case that if a "declaration did not conform to the statutory requirements in some respects, these deficiencies, if any, would constitute a mistake in the transaction between the parties, thus making the instrument eligible for reformation in equity."97 A commentary adds the possibility that if the documents are deficient, courts could analogize to the "defacto corporation" concept and find a "defacto condominium."98 The CCIOA apparently recognizes "defacto" condominiums,99 but the COA does not explicitly do so, although its definition of "condominium" is very broad and purports to define condominiums established before its effective date.100
§ 12.4.5—Amendments
In a surprising departure from the typical Condominium Act, the COA nowhere describes the means for amending the declaration or even requires the declaration to state the method...
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