Chapter 4 - § 4.12 • RESTRICTIONS ON UNITS

• Jurisdiction: Colorado

§ 4.12 • RESTRICTIONS ON UNITS

Most people seem to be aware that the zoning limitations placed on property affect its value. Property zoned for a variety of retail and offices uses usually has a higher market value than that limited to low-density residential use. Yet, unsophisticated buyers are often unaware that restrictions placed on the use of units in a common interest community have the same effect. Indeed, use restrictions may be second only to the physical attributes of the unit in determining market value. For example, in an urban area of high-rise condominiums and cooperatives, if only one community permits pets and there are many pet owners competing to purchase units in that community, the price of its units may exceed that of nearly identical units in buildings that prohibit pets. Thus, purchasers of units in common interest communities need to carefully review the documents to determine what restrictions they place on the use of units. The CCIOA requires the declaration to include: "Any restrictions on the use, occupancy, and alienation of the units and on the amount for which a unit may be sold or on the amount that may be received by a unit owner on sale, condemnation, or casualty loss to the unit or to the common interest community or on termination of the common interest community."¹²⁰ Additionally, no amendment to a declaration is allowed to change the uses to which any unit is restricted absent a vote or agreement of unit owners of units to which at least 67 percent of the votes in the association are allocated, or any larger percentage the declaration specifies. The declaration may specify a smaller percentage, but only if all of the units are restricted exclusively to nonresidential use.¹²¹

The CCIOA includes some very specific limitations on how an association may restrict the use of a unit. Notwithstanding any provision in its declaration, bylaws, or rules and regulations, the association cannot prohibit reasonable modifications to a unit necessary to afford a person with disabilities full use and enjoyment of the unit in accordance with the federal Fair Housing Act.¹²² It also cannot prohibit, in very limited circumstances,¹²³ the right of a unit owner to restrict or specify by deed, covenant, or other document the permissible sale price, rental rate, or lease rate of the unit, or occupancy or other requirements designed to promote affordable housing.¹²⁴ Finally, an association may not effectively prohibit conservation measures, bar renewable energy generation devices,¹²⁵ or impose unreasonable restrictions on electric vehicle charging systems.¹²⁶

The Uniform Act is similar, but takes a somewhat different approach. It requires the declaration to contain restrictions on alienation of units, including restrictions on leasing that exceed the leasing restrictions a governing board may otherwise impose.¹²⁷ The declaration must...