Chapter 8 - § 8.1 • INTRODUCTION

• Jurisdiction: Colorado

§ 8.1 • INTRODUCTION

Common interest ownership associations are frequently described as functioning like a municipality and have been characterized as small democratic governments.¹ One community association law expert has said that associations occupy a space lying somewhere between public governments and private businesses.² Another characterizes associations as "private governments" delivering public services.³ In one of the most frequently cited condominium law cases, a Florida appellate court in 1975 said that:

inherent in the condominium concept is the principle that to promote the health, happiness, and peace of mind of the majority of the unit owners since they are living in such close proximity and using facilities in common, each unit owner must give up a certain degree of freedom of choice which he might otherwise enjoy in a separate, privately owned property. Condominium unit owners comprise a little democratic sub society of necessity more restrictive as it pertains to the use of condominium property than may be existent outside the condominium organization.⁴

Colorado courts have not rushed to embrace the characterization of community associations as "mini-governments,"⁵ but they have not rejected it out of hand.⁶ They have, for instance, agreed that associations have a fiduciary duty to enforce restrictive covenants that derives from the quasi-governmental functions they serve.⁷

Even were Colorado courts to respond more enthusiastically to the "little democracy" analogy, it is not a perfect one. The law treats common interest community associations and local governments differently in consequential ways. For example, because owners willingly decided to make themselves subject to an association's rules and the relationship between the association and the individual owner is deemed "contractual," rules of which an owner was aware — or should have been aware — when he or she purchased a unit may be upheld where similar restrictions would be struck down if enacted by a local government. Courts generally apply a reasonableness standard to review of association rules, but they use the "fairly debatable" standard to assess local government ordinances.

Some of the rules and restrictions an association must enforce will be in place before the owners take control from the declarant. These rules can be found in the original declaration and bylaws. Later, the association will adopt other rules. Under the CCIOA, the association may amend the...