Chapter 4 - § 4.7 • SEPARATE TITLE AND TAXATION

• Jurisdiction: Colorado

§ 4.7 • SEPARATE TITLE AND TAXATION

The CCIOA addresses matters of title and taxation for each of the three forms of common interest communities: cooperatives, condominiums, and planned communities.⁶⁵

In a cooperative, a unit owner's interest in the unit and its allocated interests is considered real estate for all purposes, unless the declaration provides that an owner's interest is personal property.⁶⁶

In a condominium, each unit, together with its interest in the common elements, constitutes a separate parcel of real estate for all purposes and must be separately assessed and taxed.⁶⁷ Valuation of the common elements must be assessed proportionately to each unit in accordance with the unit's allocated interests in those common elements. The common elements may not be separately taxed or assessed.⁶⁸

In the case of a planned community, the existence of common elements is determinative. If a planned community has common elements, each unit that has been created, together with its interest in the common elements, constitutes a separate parcel of real estate for all purposes and must be separately assessed and taxed.⁶⁹ Valuation of those common elements must be assessed in accordance with a unit's allocated common expense liability, as set forth in the declaration. The common elements may not be separately taxed or assessed.⁷⁰ If, however, a planned community has no common elements, the real estate comprising that community may be taxed and assessed in any manner provided by law.⁷¹

Connecticut has also adopted the Uniform Act. In one case,⁷² a condominium marina consisted of individual boat slips together with title rights to certain other property added to the development. That property was a swimming pool with attendant buildings and a clubhouse. The condominium allowed non-owners to use the facilities for a fee. The local tax assessor decided that by allowing members of the public to use the facilities for a fee, the association made the facilities and the land on which they were situated subject to direct taxation, payment of which was the association's responsibility. The association, on the other hand, argued that the property was a common element and that, therefore, the unit owners were already taxed for its value. The court agreed and found that the individual unit owners were to be taxed on their undivided interest in the common elements, including their fractional interest in the swimming pool and clubhouse.

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^[65] The Uniform Act...