Chapter 5 - § 5.10 • INTEREST IN LEASEHOLD COMMUNITY

• Jurisdiction: Colorado

§ 5.10 • INTEREST IN LEASEHOLD COMMUNITY

A "leasehold common interest community" is one in which "all or a portion of the real estate is subject to a lease, the expiration or termination of which will terminate the common interest community or reduce its size."²⁰² Unit owners in a leasehold common interest community may have certain rights, and if they do, those rights must be stated in the declaration. If they do not, then the declaration must specifically state that they do have not those rights. The potential rights are:

• To redeem the reversion, in which case the declaration must state the manner by which any right to redeem the reversion may be exercised.
• To remove any improvements within a reasonable time after the expiration or termination of the lease.
• To renew the lease, in which case the declaration must state the conditions of any renewal.²⁰³

In a leasehold common interest community that is a condominium or planned community, after the declaration is recorded, neither the lessor nor any successor in interest of the lessor may terminate the leasehold interest of a unit owner who makes timely payment of a his or her share of the rent and complies with all covenants that, if violated, would entitle the lessor to terminate the lease.²⁰⁴

If the owner of the reversion or remainder acquires the leasehold interest of any unit owner, it does not merge the leasehold and fee simple interests unless the leasehold interests of all unit owners subject to that reversion or remainder are acquired.²⁰⁵

When expiration or termination of a lease decreases the number of units in a common interest community, the allocated interests must be reallocated as though the units had been taken by eminent domain,²⁰⁶ and reallocations must be confirmed by an amendment to the declaration prepared, executed, and recorded by the association.²⁰⁷

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Notes:

^[202] C.R.S. § 38-33.3-103(18).

^[203] C.R.S. § 38-33.3-206(1)(d)-(f).

^[204] C.R.S. § 38-33.3-206(2) (unit owner's leasehold interest in condominium or planned community is...