Chapter 5 - § 5.1 • "OWNERSHIP"

• Jurisdiction: Colorado

§ 5.1 • "OWNERSHIP"

The Colorado Common Interest Ownership Act (CCIOA) is, as the name suggests, all about property ownership and its concomitant rights and obligations. However, under the CCIOA, there are three types of communities, and "ownership" has a different meaning in each. In a condominium, a portion of the real estate (the units) is designated for separate, individual ownership — usually, but not necessarily, in fee¹ — and the remainder designated for common ownership by those same unit owners, and only by them. In fact, a common interest community is not a condominium unless the undivided interests in the common elements are vested in the unit owners.² In a cooperative, all of the real property is owned by the association and each member is entitled, by virtue of his or her ownership interest in the association, to exclusive possession of a unit.³ Indeed, in the usual formulation of cooperative ownership, "unit owners" are often called "shareholder/tenants," they have no direct fee interest in any real property, and their right to exclusive use of any real property — including what in a condominium would usually be a limited common element, for instance a balcony — is governed by a proprietary lease.⁴ Nonetheless, unless the cooperative's declaration provides that a unit owner's interest is personal property, it is real estate "for all purposes."⁵ Finally, if a common interest community is neither a condominium nor a cooperative, it is called a "planned community,"⁶ a form of ownership in which there may or may not be commonly owned property.⁷ A planned community could be a traditional single-family subdivision, as long as it meets the definition of a common interest community,⁸ or a "townhouse" project that meets that definition, but not a development meeting the definition of a condominium.⁹

In a condominium or planned community, the declarant will ordinarily own the property and convey a fee interest to each unit owner. However, sometimes the declarant will only have a leasehold interest — a long-term ground lease — or will create a leasehold estate in the property. Obviously, the unit owner then acquires less than a fee simple absolute interest in his or her unit. Under the CCIOA, a common interest community in which all or a portion of the real estate is subject to a lease, the expiration or termination of which will terminate the community or reduce its size, is called a "leasehold common interest community."¹⁰ Although uncommon, there...