Colorado Common Interest Ownership Act Archives - Goodman Law Group

§38-33.3-402 Manager licensing – condition precedent for enforcement of contract terms. (Repealed)

Goodman Law Group — Sun, 02 Jan 2022 06:02:37 +0000

Title 7 – Corporations and Associations

Article 121 – General Provisions

Notice

7-121-402. Notice

(1) Notice given pursuant to articles 121 to 137 of this title shall be in writing unless otherwise provided in the bylaws.

(2) Notice may be given in person; by telephone, telegraph, teletype, electronically transmitted, or other form of wire or wireless communication; or by mail or private carrier. The bylaws may provide that if these forms of personal notice are impracticable, notice may be communicated by a newspaper of general circulation in the area where published.

(3) Written notice by a nonprofit corporation to its members, if mailed, is correctly addressed if addressed to the member’s address shown in the nonprofit corporation’s current record of members. If three successive notices given to a member pursuant to subsection (5) of this section have been returned as undeliverable, no further notices to such member shall be necessary until another address for the member is made known to the nonprofit corporation.

(4) Written notice to a domestic nonprofit corporation or to a foreign nonprofit corporation authorized to transact business or conduct activities in this state, other than in its capacity as a member, is correctly addressed if addressed to the registered agent address of its registered agent or to the domestic or foreign nonprofit corporation or its secretary at its principal office.

(5) Written notice by a nonprofit corporation to its members, if in a comprehensible form, is effective at the earliest of:

(a) The date received;

(b) Five days after its deposit in the United States mail, as evidenced by the postmark, if mailed correctly addressed and with first class postage affixed;

(c) The date shown on the return receipt, if mailed by registered or certified mail, return receipt requested, and the receipt is signed by or on behalf of the addressee;

(d) Thirty days after its deposit in the United States mail, as evidenced by the postmark, if mailed correctly addressed and with other than first class, registered, or certified postage affixed.

(6) Oral notice is effective when communicated if communicated in a comprehensible manner.

(7) Notice by publication is effective on the date of first publication.

(8) If articles 121 to 137 of this title prescribe notice requirements for particular circumstances, those requirements govern. If the articles of incorporation or bylaws prescribe notice requirements not inconsistent with this section or other provisions of articles 121 to 137 of this title, those requirements govern.

(9) A written notice or report delivered as part of a newsletter, magazine, or other publication regularly sent to members shall constitute a written notice or report if addressed or delivered to the member’s address shown in the nonprofit corporation’s current list of members, or in the case of members who are residents of the same household and who have the same address in the nonprofit corporation’s current list of members, if addressed or delivered to one of such members, at the address appearing on the current list of members.

History

Source: L. 97: Entire article added, p. 657, § 3, effective July 1, 1998. L. 2000: (4) amended, p. 982, § 77, effective July 1. L. 2003: (4) amended, p. 2335, § 281, effective July 1, 2004.

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§38-33.3-401 Registration – annual fees

Goodman Law Group — Sun, 02 Jan 2022 06:02:37 +0000

Title 7 – Corporations and Associations

Article 121 – General Provisions

General definitions

As used in articles 121 to 137 of this title 7, unless the context otherwise requires:

(1) (Deleted by amendment, L. 2003, p. 2332, § 280, effective July 1, 2004.)

(2) “Articles of incorporation” includes amended articles of incorporation, restated articles of incorporation, and other instruments, however designated, on file in the records of the secretary of state that have the effect of amending or supplementing in some respect the original or amended articles of incorporation, and shall also include:

(a) For a corporation created by special act of the general assembly or pursuant to general law, which corporation has elected to accept the provisions of articles 121 to 137 of this title, the special charter and any amendments thereto made by special act of the general assembly or pursuant to general law prior to the corporation’s election to accept the provisions of said articles;

(b) For a corporation formed or incorporated under article 40, 50, or 51 of this title, which corporation has elected to accept the provisions of articles 121 to 137 of this title, the certificate of incorporation or affidavit and any amendments thereto made prior to the corporation’s election to accept the provisions of said articles.

(3) (Deleted by amendment, L. 2003, p. 2332, § 280, effective July 1, 2004.)

(4) “Board of directors” means the body authorized to manage the affairs of the domestic or foreign nonprofit corporation; except that no person or group of persons are the board of directors because of powers delegated to that person or group of persons pursuant to section 7-128-101 (2).

(5) “Bylaws” means the code or codes of rules, other than the articles of incorporation, adopted pursuant to articles 121 to 137 of this title for the regulation or management of the affairs of the domestic or foreign nonprofit corporation irrespective of the name or names by which such rules are designated, and includes amended bylaws and restated bylaws.

(6) “Cash” and “money” are used interchangeably in articles 121 to 137 of this title. Each of these terms includes:

(a) Legal tender;

(b) Negotiable instruments readily convertible into legal tender; and

(7) “Class” refers to a group of memberships that have the same rights with respect to voting, dissolution, redemption, and transfer. For the purpose of this section, rights shall be considered the same if they are determined by a formula applied uniformly to a group of memberships.

(8) (Deleted by amendment, L. 2000, p. 982, § 76, effective July 1, 2000.)

(9) “Corporation” or “domestic corporation” means a corporation for profit, which is not a foreign corporation, incorporated under or subject to the provisions of articles 101 to 117 of this title.

(10) “Delegate” means any person elected or appointed to vote in a representative assembly for the election of a director or directors or on other matters.

(11) (Deleted by amendment, L. 2003, p. 2332, § 280, effective July 1, 2004.)

(12) “Director” means a member of the board of directors.

(13) “Distribution” means the payment of a dividend or any part of the income or profit of a corporation to its members, directors, or officers.

(14) (Deleted by amendment, L. 2003, p. 2332, § 280, effective July 1, 2004.)

(15) “Effective date of notice” has the meaning set forth in section 7-121-402.

(16) “Employee” includes an officer but not a director; except that a director may accept duties that make said director also an employee.

(16.5) “Entrance fee” means any fee or charge, including a damage deposit, paid by a person to a residential nonprofit corporation in order to become a resident member. “Entrance fee” does not include regular periodic payments for the purchase or lease of residential real estate or for the day-to-day use of facilities or services.

(17) to (20) (Deleted by amendment, L. 2003, p. 2332, § 280, effective July 1, 2004.)

(21) “Internal revenue code” means the federal “Internal Revenue Code of 1986”, as amended from time to time, or to corresponding provisions of subsequent internal revenue laws of the United States of America.

(22) and (23) (Deleted by amendment, L. 2003, p. 2332, § 280, effective July 1, 2004.)

(24) “Member” means any person or persons identified as such in the articles of incorporation or bylaws pursuant to a procedure stated in the articles of incorporation or bylaws or by a resolution of the board of directors. The term “member” includes “voting member” and a stockholder in a cooperative housing corporation formed pursuant to section 38-33.5-101, C.R.S.

(25) “Membership” refers to the rights and obligations of a member or members.

(25.5) “Mutual ditch company” means a nonprofit corporation that complies with article 42 of this title.

(26) “Nonprofit corporation” or “domestic nonprofit corporation” means an entity, which is not a foreign nonprofit corporation, incorporated under or subject to the provisions of articles 121 to 137 of this title.

(27) to (29) (Deleted by amendment, L. 2003, p. 2332, § 280, effective July 1, 2004.)

(30) “Receive”, when used in reference to receipt of a writing or other document by a domestic or foreign nonprofit corporation, means that the writing or other document is actually received:

(a) By the domestic or foreign nonprofit corporation at its registered office or at its principal office;

(b) By the secretary of the domestic or foreign nonprofit corporation, wherever the secretary is found; or

(c) By any other person authorized by the bylaws or the board of directors to receive such writings, wherever such person is found.

(31) “Record date” means the date, established under article 127 of this title, on which a nonprofit corporation determines the identity of its members. The determination shall be made as of the close of business on the record date unless another time for doing so is stated when the record date is fixed.

(32) (Deleted by amendment, L. 2003, p. 2332, § 280, effective July 1, 2004.)

(32.5) “Residential member” means a member of a residential nonprofit corporation whose status as a member is dependent upon, or whose membership is accorded voting rights as a result of, owning or leasing specified residential real estate.

(33) (Deleted by amendment, L. 2003, p. 2332, § 280, effective July 1, 2004.)

(33.5)

(a) Except as otherwise provided in paragraph (b) of this subsection (33.5), “residential nonprofit corporation” means a nonprofit corporation that has residential members.

(b) Notwithstanding subsection (33.5)(a) of this section, “residential nonprofit corporation” does not include:

(I) A unit owners’ association or any other entity subject to the “Colorado Common Interest Ownership Act”, article 33.3 of title 38, C.R.S., regardless of whether it was formed before, on, or after July 1, 1992;

(II) A nursing care facility licensed by the department of public health and environment under section 25-3-101, C.R.S.;

(III) An assisted living residence licensed under section 25-3-101, C.R.S.;

(IV) A life care institution regulated under article 49 of title 11; or

(V) A continuing care retirement community, as described in section 25.5-6-203, C.R.S., operated by an entity that is licensed or otherwise subject to state regulation.

(34) “Secretary” means the corporate officer to whom the bylaws or the board of directors has delegated responsibility under section 7-128-301 (3) for the preparation and maintenance of minutes of the meetings of the board of directors and of the members and of the other records and information required to be kept by the nonprofit corporation under section 7-136-101 and for authenticating records of the nonprofit corporation.

(35) to (37) (Deleted by amendment, L. 2003, p. 2332, § 280, effective July 1, 2004.)

(38) “Vote” includes authorization by written ballot and written consent.

(39) “Voting group” means all the members of one or more classes of members or directors that, under articles 121 to 137 of this title or the articles of incorporation or bylaws, are entitled to vote and be counted together collectively on a matter. All members or directors entitled by articles 121 to 137 of this title or the articles of incorporation or bylaws to vote generally on the matter are for that purpose a single voting group.

(40) “Voting member” means any person or persons who on more than one occasion, pursuant to a provision of a nonprofit corporation’s articles of incorporation or bylaws, have the right to vote for the election of a director or directors. A person is not a voting member solely by virtue of any of the following:

(a) Any rights such person has as a delegate;

(b) Any rights such person has to designate a director or directors; or

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§38-33.3-319 Other applicable statutes

Goodman Law Group — Sun, 02 Jan 2022 06:02:37 +0000

Title 38 – Property – Real and Personal

Article 33.3 – Colorado Common Interest Ownership Act

Other applicable statutes

To the extent that provisions of this article conflict with applicable provisions in the “Colorado Business Corporation Act”, articles 101 to 117 of title 7, C.R.S., the “Colorado Revised Nonprofit Corporation Act”, articles 121 to 137 of title 7, C.R.S., the “Uniform Partnership Law”, article 60 of title 7, C.R.S., the “Colorado Uniform Partnership Act ”, article 64 of title 7, C.R.S., the “Colorado Uniform Limited Partnership Act of 1981”, article 62 of title 7, C.R.S., article 1 of this title, article 55 of title 7, C.R.S., article 33.5 of this title, and section 39-1-103 (10), C.R.S., and any other laws of the state of Colorado which now exist or which are subsequently enacted, the provisions of this article shall control.

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§38-33.3-318 Association as trustee

Goodman Law Group — Sun, 02 Jan 2022 06:02:37 +0000

Title 38 – Property – Real and Personal

Article 33.3 – Colorado Common Interest Ownership Act

Association as trustee

With respect to a third person dealing with the association in the association’s capacity as a trustee, the existence of trust powers and their proper exercise by the association may be assumed without inquiry. A third person is not bound to inquire whether the association has the power to act as trustee or is properly exercising trust powers. A third person, without actual knowledge that the association is exceeding or improperly exercising its powers, is fully protected in dealing with the association as if it possessed and properly exercised the powers it purports to exercise. A third person is not bound to assure the proper application of trust assets paid or delivered to the association in its capacity as trustee.

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§38-33.3-317 Association records — rules.

Goodman Law Group — Sun, 02 Jan 2022 06:02:37 +0000

Title 38 – Property – Real and Personal

Article 33.3 – Colorado Common Interest Ownership Act

Association records — rules.

38-33.3-317. Association records — rules. (Effective September 7, 2021)

(1) In addition to any records specifically defined in the association’s declaration or bylaws or expressly required by section 38-33.3-209.4 (2), the association must maintain the following, all of which shall be deemed to be the sole records of the association for purposes of document retention and production to owners:

(a) Detailed records of receipts and expenditures affecting the operation and administration of the association;

(b) Records of claims for construction defects and amounts received pursuant to settlement of those claims;

(c) Minutes of all meetings of its unit owners and executive board, a record of all actions taken by the unit owners or executive board without a meeting, and a record of all actions taken by any committee of the executive board;

(d) Written communications among, and the votes cast by, executive board members that are:

(I) Directly related to an action taken by the board without a meeting pursuant to section 7-128-202, C.R.S.; or

(II) Directly related to an action taken by the board without a meeting pursuant to the association’s bylaws;

(e) The names of unit owners in a form that permits preparation of a list of the names of all unit owners and the physical mailing addresses at which the association communicates with them, showing the number of votes each unit owner is entitled to vote; except that this paragraph (e) does not apply to a unit, or the owner thereof, if the unit is a time-share unit, as defined in section 38-33-110 (7);

(f) Its current declaration, covenants, bylaws, articles of incorporation, if it is a corporation, or the corresponding organizational documents if it is another form of entity, rules and regulations, responsible governance policies adopted pursuant to section 38-33.3-209.5, and other policies adopted by the executive board;

(g) Financial statements as described in section 7-136-106, C.R.S., for the past three years and tax returns of the association for the past seven years, to the extent available;

(h) A list of the names, electronic mail addresses, and physical mailing addresses of its current executive board members and officers;

(h.5) A list of the current amounts of all unique and extraordinary fees, assessments, and expenses that are chargeable by the association in connection with the purchase or sale of a unit and are not paid for through assessments, including transfer fees, record change fees, and the charge for a status letter or statement of assessments due;

(h.6) All documents included in the association’s annual disclosures made pursuant to section 38-33.3-209.4.

(i) Its most recent annual report delivered to the secretary of state, if any;

(j) Financial records sufficiently detailed to enable the association to comply with section 38-33.3-316 (8) concerning statements of unpaid assessments;

(k) The association’s most recent reserve study, if any;

(l) Current written contracts to which the association is a party and contracts for work performed for the association within the immediately preceding two years;

(m) Records of executive board or committee actions to approve or deny any requests for design or architectural approval from unit owners;

(n) Ballots, proxies, and other records related to voting by unit owners for one year after the election, action, or vote to which they relate;

(o) Resolutions adopted by its board of directors relating to the characteristics, qualifications, rights, limitations, and obligations of members or any class or category of members; and

(p) All written communications within the past three years to all unit owners generally as unit owners.

(2)

(a) Subject to subsections (3), (3.5), and (4) of this section, all records maintained by the association must be available for examination and copying by a unit owner or the owner’s authorized agent. The association may require unit owners to submit a written request, describing with reasonable particularity the records sought, at least ten days prior to inspection or production of the documents and may limit examination and copying times to normal business hours or the next regularly scheduled executive board meeting if the meeting occurs within thirty days after the request. Notwithstanding any provision of the declaration, bylaws, articles, or rules and regulations of the association to the contrary, the association may not condition the production of records upon the statement of a proper purpose.

(b)

(I) Notwithstanding paragraph (a) of this subsection (2), a membership list or any part thereof may not be obtained or used by any person for any purpose unrelated to a unit owner’s interest as a unit owner without consent of the executive board.

(II) Without limiting the generality of subparagraph (I) of this paragraph (b), without the consent of the executive board, a membership list or any part thereof may not be:

(A) Used to solicit money or property unless such money or property will be used solely to solicit the votes of the unit owners in an election to be held by the association;

(B) Used for any commercial purpose; or

(3) Records maintained by an association may be withheld from inspection and copying to the extent that they are or concern:

(a) Architectural drawings, plans, and designs, unless released upon the written consent of the legal owner of the drawings, plans, or designs;

(b) Contracts, leases, bids, or records related to transactions to purchase or provide goods or services that are currently in or under negotiation;

(c) Communications with legal counsel that are otherwise protected by the attorney-client privilege or the attorney work product doctrine;

(d) Disclosure of information in violation of law;

(e) Records of an executive session of an executive board;

(f) Individual units other than those of the requesting owner; or

(g) The names and physical mailing addresses of unit owners if the unit is a time-share unit, as defined in section 38-33-110 (7).

(3.5) Records maintained by an association are not subject to inspection and copying, and they must be withheld, to the extent that they are or concern:

(a) Personnel, salary, or medical records relating to specific individuals; or

(b)

(I) Personal identification and account information of members and residents, including bank account information, telephone numbers, electronic mail addresses, driver’s license numbers, and social security numbers; except that, notwithstanding section 38-33.3-104, a member or resident may provide the association with prior written consent to the disclosure of, and the association may publish to other members and residents, the person’s telephone number, electronic mail address, or both. The written consent must be kept as a record of the association and remains valid until the person withdraws it by providing the association with a written notice of withdrawal of the consent. If a person withdraws his or her consent, the association is under no obligation to change, retrieve, or destroy any document or record published prior to the notice of withdrawal.

(II) As used in this paragraph (b), written consent and notice of withdrawal of the consent may be given by means of a “record”, as defined in the “Uniform Electronic Transactions Act”, article 71.3 of title 24, C.R.S., if the parties so agree in accordance with section 24-71.3-105, C.R.S.

(4) The association may impose a reasonable charge, which may be collected in advance and may cover the costs of labor and material, for copies of association records. The charge may not exceed the estimated cost of production and reproduction of the records, including the costs of copying, mailing, and any necessary special processing.

(4.5) If the association fails to allow inspection or copying of records in accordance with this section within thirty calendar days after receipt of a written request submitted by certified mail, return receipt requested, and payment of any fees required pursuant to subsection (4) of this section, the association is liable for penalties in the amount of fifty dollars per day, commencing on the eleventh business day after the association received the written request, up to a maximum of five hundred dollars or the unit owner’s actual damages sustained as a result of the refusal, whichever is greater.

(5) A right to copy records under this section includes the right to receive copies by photocopying or other means, including the receipt of copies through an electronic transmission if available, upon request by the unit owner.

(6) An association is not obligated to compile or synthesize information.

(7) Association records and the information contained within those records shall not be used for commercial purposes.

(8) Subsections (1)(h.5), (1)(h.6), and (4.5) of this section, as added by House Bill 21-1229, enacted in 2021, and subsection (4) of this section, as amended by House Bill 21-1229, enacted in 2021, do not apply to an association that includes time share units, as defined in section 38-33-110 (7).

History

SOURCE:

Source: L. 91: Entire article added, p. 1756, § 1, effective July 1, 1992. L. 2005: Entire section amended, p. 1387, § 18, effective January 1, 2006. L. 2006: (2), (3), (4), and (7) amended, p. 1224, § 13, effective May 26. L. 2012: Entire section R&RE, (HB 12-1237), ch. 232, p. 1016, § 1, effective January 1, 2013. L. 2014: (3.5) amended, (HB 14-1125), ch. 66, p. 290, § 1, effective August 6.; L. 2021: (HB1229), ch. 409, § 4, effective September 7, 2021.

State Notes

ANNOTATION

Under subsections (1) and (2)(a), an association must make reasonably available records it owns and its agent maintainseven if the association itself does not actually create or keep the records. Glenwright v. St. James Place Condo. Ass’n, 197 P.3d 264 (Colo. App. 2008) (decided prior to the 2005 amendment).

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§38-33.3-316 Time share estate – foreclosure – definitions

Goodman Law Group — Sun, 02 Jan 2022 06:02:37 +0000

Title 38 – Property – Real and Personal

Article 33.3 – Colorado Common Interest Ownership Act

Time share estate – foreclosure – definitions

38-33.3-316.5. Time share estate – foreclosure – definitions

(1) As used in this section, unless the context otherwise requires:

(a) “Junior lienor” has the same meaning as set forth in section 38-38-100.3 (12), C.R.S.

(b) “Obligor” means the person liable for the assessment levied against a time share estate pursuant to section 38-33.3-316 or the record owner of the time share estate.

(2) A plaintiff may commence a single judicial foreclosure action pursuant to section 38-33.3-316 (11), joining as defendants multiple obligors with separate time share estates and the junior lienors thereto, if:

(a) The judicial foreclosure action involves a single common interest community;

(b) The declaration giving rise to the right of the association to collect assessments creates default and remedy obligations that are substantially the same for each obligor named as a defendant in the judicial foreclosure action;

(d) The plaintiff does not allege, with respect to any obligor, that the association’s lien is prior to any security interest described in section 38-33.3-316 (2)(a)(II), even if such a claim could be made pursuant to section 38-33.3-316 (2)(b)(I).

(3) In a judicial foreclosure action in which multiple obligors with separate time share estates and the junior lienors thereto have been joined as defendants in accordance with this section:

(a) In addition to any other circumstances where severance is proper under the Colorado rules of civil procedure, the court may sever for separate trial any disputed claim or claims;

(b) If service by publication of two or more defendants is permitted by law, the plaintiff may publish a single notice for all joined defendants for whom service by publication is permitted, so long as all information that would be required by law to be provided in the published notice as to each defendant individually is included in the combined published notice. Nothing in this paragraph (b) shall be interpreted to allow service by publication of any defendant if service by publication is not otherwise permitted by law with respect to that defendant.

(c) The action shall be deemed a single action, suit, or proceeding for purposes of payment of filing fees, notwithstanding any action by the court pursuant to paragraph (a) of this subsection (3), so long as the plaintiff complies with subsection (2) of this section.

(4) Notwithstanding that multiple obligors with separate time share estates may be joined in a single judicial foreclosure action, unless otherwise ordered by the court, each time share estate foreclosed pursuant to this section shall be subject to a separate foreclosure sale, and any cure or redemption rights with respect to such time share estate shall remain separate.

(5) The plaintiff in an action brought pursuant to this section is deemed to waive any claims against a defendant for a deficiency remaining after the foreclosure of the lien for assessment and for attorney fees related to the foreclosure action.

History

Source: L. 2008: Entire section added, p. 1522, § 1, effective August 5.

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§38-33.3-315 Assessments for common expenses

Goodman Law Group — Sun, 02 Jan 2022 06:02:37 +0000

Title 38 – Property – Real and Personal

Article 33.3 – Colorado Common Interest Ownership Act

Assessments for common expenses

38-33.3-315. Assessments for common expenses

(1) Until the association makes a common expense assessment, the declarant shall pay all common expenses. After any assessment has been made by the association, assessments shall be made no less frequently than annually and shall be based on a budget adopted no less frequently than annually by the association.

(2) Except for assessments under subsections (3) and (4) of this section and section 38-33.3-207 (4)(a)(IV), all common expenses shall be assessed against all the units in accordance with the allocations set forth in the declaration pursuant to section 38-33.3-207 (1) and (2). Any past-due common expense assessment or installment thereof shall bear interest at the rate established by the association not exceeding twenty-one percent per year.

(3) To the extent required by the declaration:

(a) Any common expense associated with the maintenance, repair, or replacement of a limited common element shall be assessed against the units to which that limited common element is assigned, equally, or in any other proportion the declaration provides;

(b) Any common expense or portion thereof benefiting fewer than all of the units shall be assessed exclusively against the units benefited; and

(c) The costs of insurance shall be assessed in proportion to risk, and the costs of utilities shall be assessed in proportion to usage.

(4) If any common expense is caused by the misconduct of any unit owner, the association may assess that expense exclusively against such owner’s unit.

(5) If common expense liabilities are reallocated, common expense assessments and any installment thereof not yet due shall be recalculated in accordance with the reallocated common expense liabilities.

(6) Each unit owner is liable for assessments made against such owner’s unit during the period of ownership of such unit. No unit owner may be exempt from liability for payment of the assessments by waiver of the use or enjoyment of any of the common elements or by abandonment of the unit against which the assessments are made.

(7) Unless otherwise specifically provided in the declaration or bylaws, the association may enter into an escrow agreement with the holder of a unit owner’s mortgage so that assessments may be combined with the unit owner’s mortgage payments and paid at the same time and in the same manner; except that any such escrow agreement shall comply with any applicable rules of the federal housing administration, department of housing and urban development, veterans’ administration, or other government agency.

History

Source: L. 91: Entire article added, p. 1753, § 1, effective July 1, 1992. L. 93: (6) amended, p. 653, § 20, effective April 30. L. 94: (2) amended, p. 2849, § 6, effective July 1. L. 2005: (7) added, p. 1387, § 17, effective January 1, 2006.

State Notes

ANNOTATION

Summary judgment was not appropriate in an action brought by an association to collect unpaid association dues for a timeshare unitwhere the owner of the unit made a sufficient showing that the developer, in connection with a resale program, agreed to pay the dues, and the association and the developer were, for all practical purposes, one and the same. Club Telluride Owners Ass’n, Inc. v. Mitchell, 70 P.3d 502 (Colo. App. 2002).

Relieving the owner of a timeshare unit of an obligation to pay dues when the developer agreed to pay the dues in connection with a resale program was not void as against public policy.This section prohibits preferential assessments among units. It does not address agreements concerning how assessments will be paid. The statutory scheme would not be frustrated if the association accepted the developer and its successor as the primary obligors and looked to the owner as surety after exhausting collection efforts against the primary obligors. Club Telluride Owners Ass’n, Inc. v. Mitchell, 70 P.3d 502 (Colo. App. 2002).

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§38-33.3-314 Surplus funds

Goodman Law Group — Sun, 02 Jan 2022 06:02:37 +0000

Title 38 – Property – Real and Personal

Article 33.3 – Colorado Common Interest Ownership Act

Surplus funds

Unless otherwise provided in the declaration, any surplus funds of the association remaining after payment of or provision for common expenses and any prepayment of or provision for reserves shall be paid to the unit owners in proportion to their common expense liabilities or credited to them to reduce their future common expense assessments.

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§38-33.3-313 Insurance

Goodman Law Group — Sun, 02 Jan 2022 06:02:37 +0000

Title 38 – Property – Real and Personal

Article 33.3 – Colorado Common Interest Ownership Act

Insurance

38-33.3-313. Insurance

(1) Commencing not later than the time of the first conveyance of a unit to a person other than a declarant, the association shall maintain, to the extent reasonably available:

(a) Property insurance on the common elements and, in a planned community, also on property that must become common elements, for broad form covered causes of loss; except that the total amount of insurance must be not less than the full insurable replacement cost of the insured property less applicable deductibles at the time the insurance is purchased and at each renewal date, exclusive of land, excavations, foundations, and other items normally excluded from property policies; and

(b) Commercial general liability insurance against claims and liabilities arising in connection with the ownership, existence, use, or management of the common elements, and, in cooperatives, also of all units, in an amount, if any, specified by the common interest community instruments or otherwise deemed sufficient in the judgment of the executive board but not less than any amount specified in the association documents, insuring the executive board, the unit owners’ association, the management agent, and their respective employees, agents, and all persons acting as agents. The declarant shall be included as an additional insured in such declarant’s capacity as a unit owner and board member. The unit owners shall be included as additional insureds but only for claims and liabilities arising in connection with the ownership, existence, use, or management of the common elements and, in cooperatives, also of all units. The insurance shall cover claims of one or more insured parties against other insured parties.

(2) In the case of a building that is part of a cooperative or that contains units having horizontal boundaries described in the declaration, the insurance maintained under paragraph (a) of subsection (1) of this section must include the units but not the finished interior surfaces of the walls, floors, and ceilings of the units. The insurance need not include improvements and betterments installed by unit owners, but if they are covered, any increased charge shall be assessed by the association to those owners.

(3) If the insurance described in subsections (1) and (2) of this section is not reasonably available, or if any policy of such insurance is cancelled or not renewed without a replacement policy therefore having been obtained, the association promptly shall cause notice of that fact to be hand delivered or sent prepaid by United States mail to all unit owners. The declaration may require the association to carry any other insurance, and the association in any event may carry any other insurance it considers appropriate, including insurance on units it is not obligated to insure, to protect the association or the unit owners.

(4) Insurance policies carried pursuant to subsections (1) and (2) of this section must provide that:

(a) Each unit owner is an insured person under the policy with respect to liability arising out of such unit owner’s interest in the common elements or membership in the association;

(b) The insurer waives its rights to subrogation under the policy against any unit owner or member of his household;

(c) No act or omission by any unit owner, unless acting within the scope of such unit owner’s authority on behalf of the association, will void the policy or be a condition to recovery under the policy; and

(d) If, at the time of a loss under the policy, there is other insurance in the name of a unit owner covering the same risk covered by the policy, the association’s policy provides primary insurance.

(5) Any loss covered by the property insurance policy described in paragraph (a) of subsection (1) and subsection (2) of this section must be adjusted with the association, but the insurance proceeds for that loss shall be payable to any insurance trustee designated for that purpose, or otherwise to the association, and not to any holder of a security interest. The insurance trustee or the association shall hold any insurance proceeds in trust for the association unit owners and lienholders as their interests may appear. Subject to the provisions of subsection (9) of this section, the proceeds must be disbursed first for the repair or restoration of the damaged property, and the association, unit owners, and lienholders are not entitled to receive payment of any portion of the proceeds unless there is a surplus of proceeds after the property has been completely repaired or restored or the common interest community is terminated.

(6) The association may adopt and establish written nondiscriminatory policies and procedures relating to the submittal of claims, responsibility for deductibles, and any other matters of claims adjustment. To the extent the association settles claims for damages to real property, it shall have the authority to assess negligent unit owners causing such loss or benefiting from such repair or restoration all deductibles paid by the association. In the event that more than one unit is damaged by a loss, the association in its reasonable discretion may assess each unit owner a pro rata share of any deductible paid by the association.

(7) An insurance policy issued to the association does not obviate the need for unit owners to obtain insurance for their own benefit.

(8) An insurer that has issued an insurance policy for the insurance described in subsections (1) and (2) of this section shall issue certificates or memoranda of insurance to the association and, upon request, to any unit owner or holder of a security interest. Unless otherwise provided by statute, the insurer issuing the policy may not cancel or refuse to renew it until thirty days after notice of the proposed cancellation or nonrenewal has been mailed to the association, and each unit owner and holder of a security interest to whom a certificate or memorandum of insurance has been issued, at their respective last-known addresses.

(9)

(a) Any portion of the common interest community for which insurance is required under this section which is damaged or destroyed must be repaired or replaced promptly by the association unless:

(I) The common interest community is terminated, in which case section 38-33.3-218 applies;

(II) Repair or replacement would be illegal under any state or local statute or ordinance governing health or safety;

(III) Sixty-seven percent of the unit owners, including every owner of a unit or assigned limited common element that will not be rebuilt, vote not to rebuild; or

(IV) Prior to the conveyance of any unit to a person other than the declarant, the holder of a deed of trust or mortgage on the damaged portion of the common interest community rightfully demands all or a substantial part of the insurance proceeds.

(b) The cost of repair or replacement in excess of insurance proceeds and reserves is a common expense. If the entire common interest community is not repaired or replaced, the insurance proceeds attributable to the damaged common elements must be used to restore the damaged area to a condition compatible with the remainder of the common interest community, and, except to the extent that other persons will be distributees, the insurance proceeds attributable to units and limited common elements that are not rebuilt must be distributed to the owners of those units and the owners of the units to which those limited common elements were allocated, or to lienholders, as their interests may appear, and the remainder of the proceeds must be distributed to all the unit owners or lienholders, as their interests may appear, as follows:

(I) In a condominium, in proportion to the common element interests of all the units; and

(II) In a cooperative or planned community, in proportion to the common expense liabilities of all the units; except that, in a fixed or limited equity cooperative, the unit owner may not receive more of the proceeds than would satisfy the unit owner’s entitlements under the declaration if the unit owner leaves the cooperative. In such a cooperative, the proceeds that remain after satisfying the unit owner’s obligations continue to be held in trust by the association for the benefit of the cooperative. If the unit owners vote not to rebuild any unit, that unit’s allocated interests are automatically reallocated upon the vote as if the unit had been condemned under section 38-33.3-107, and the association promptly shall prepare, execute, and record an amendment to the declaration reflecting the reallocations.

(10) If any unit owner or employee of an association with thirty or more units controls or disburses funds of the common interest community, the association must obtain and maintain, to the extent reasonably available, fidelity insurance. Coverage shall not be less in aggregate than two months’ current assessments plus reserves, as calculated from the current budget of the association.

(11) Any person employed as an independent contractor by an association with thirty or more units for the purposes of managing a common interest community must obtain and maintain fidelity insurance in an amount not less than the amount specified in subsection (10) of this section, unless the association names such person as an insured employee in a contract of fidelity insurance, pursuant to subsection (10) of this section.

(12) The association may carry fidelity insurance in amounts greater than required in subsection (10) of this section and may require any independent contractor employed for the purposes of managing a common interest community to carry more fidelity insurance coverage than required in subsection (10) of this section.

(13) Premiums for insurance that the association acquires and other expenses connected with acquiring such insurance are common expenses.

History

Source: L. 91: Entire article added, p. 1748, § 1, effective July 1, 1992. L. 98: (9)(a)(III) amended, p. 485, § 18, effective July 1.

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§38-33.3-312 Conveyance or encumbrance of common elements

Goodman Law Group — Sun, 02 Jan 2022 06:02:37 +0000

Title 38 – Property – Real and Personal

Article 33.3 – Colorado Common Interest Ownership Act

Conveyance or encumbrance of common elements

38-33.3-312. Conveyance or encumbrance of common elements

(1) In a condominium or planned community, portions of the common elements may be conveyed or subjected to a security interest by the association if persons entitled to cast at least sixty-seven percent of the votes in the association, including sixty-seven percent of the votes allocated to units not owned by a declarant, or any larger percentage the declaration specifies, agree to that action; except that all owners of units to which any limited common element is allocated must agree in order to convey that limited common element or subject it to a security interest. The declaration may specify a smaller percentage only if all of the units are restricted exclusively to nonresidential uses. Proceeds of the sale are an asset of the association.

(2) Part of a cooperative may be conveyed and all or part of a cooperative may be subjected to a security interest by the association if persons entitled to cast at least sixty-seven percent of the votes in the association, including sixty-seven percent of the votes allocated to units not owned by a declarant, or any larger percentage the declaration specifies, agree to that action; except that, if fewer than all of the units or limited common elements are to be conveyed or subjected to a security interest, then all unit owners of those units, or the units to which those limited common elements are allocated, must agree in order to convey those units or limited common elements or subject them to a security interest. The declaration may specify a smaller percentage only if all of the units are restricted exclusively to nonresidential uses. Proceeds of the sale are an asset of the association. Any purported conveyance or other voluntary transfer of an entire cooperative, unless made in compliance with section 38-33.3-218, is void.

(3) An agreement to convey, or subject to a security interest, common elements in a condominium or planned community, or, in a cooperative, an agreement to convey, or subject to a security interest, any part of a cooperative, must be evidenced by the execution of an agreement, in the same manner as a deed, by the association. The agreement must specify a date after which the agreement will be void unless approved by the requisite percentage of owners. Any grant, conveyance, or deed executed by the association must be recorded in every county in which a portion of the common interest community is situated and is effective only upon recordation.

(4) The association, on behalf of the unit owners, may contract to convey an interest in a common interest community pursuant to subsection (1) of this section, but the contract is not enforceable against the association until approved pursuant to subsections (1) and (2) of this section and executed and ratified pursuant to subsection (3) of this section. Thereafter, the association has all powers necessary and appropriate to effect the conveyance or encumbrance, including the power to execute deeds or other instruments.

(5) Unless in compliance with this section, any purported conveyance, encumbrance, judicial sale, or other transfer of common elements or any other part of a cooperative is void.

(6) A conveyance or encumbrance of common elements pursuant to this section shall not deprive any unit of its rights of ingress and egress of the unit and support of the unit.

(7) Unless the declaration otherwise provides, a conveyance or encumbrance of common elements pursuant to this section does not affect the priority or validity of preexisting encumbrances.

(8) In a cooperative, the association may acquire, hold, encumber, or convey a proprietary lease without complying with this section.

History

Source: L. 91: Entire article added, p. 1747, § 1, effective July 1, 1992. L. 93: (1) and (5) amended, p. 652, § 18, effective April 30. L. 98: (1) to (3) amended, p. 484, § 17, effective July 1.

State Notes

ANNOTATION

Subsection (3) requires that, when requisite number of unit owners approve the sale of new units, such approval be executed as a written agreement demonstrating that association has authority to enter into contracts to sell the new units.Nothing in the record shows that the unit owners executed any type of agreement approving the sale of new units. Platt v. Aspenwood Condo. Ass’n, 214 P.3d 1060 (Colo. App. 2009).

“Contract” referred to in subsection (4) must be ratified by the unit owners to be enforceable.Subsection (4) allows an association to enter into a contract but requires ratification for the contract to be enforceable. Association could enter into a contract but it could not also ratify the contract; therefore, the unit owners were required to ratify the contract to render it enforceable. Platt v. Aspenwood Condo. Ass’n, 214 P.3d 1060 (Colo. App. 2009).

Under subsection (5), a “purported conveyance”, not “the agreement to convey” or “the contract”, is void for noncompliance with subsections (1) through (4).Although plaintiffs entered into contract to purchase new condominium unit, the unit was not conveyed to them; therefore, because the contract was not ratified by the unit owners, it was unenforceable, and the plaintiffs specific performance claim cannot stand. Platt v. Aspenwood Condo. Ass’n, 214 P.3d 1060 (Colo. App. 2009).

Trial court erred in dismissing plaintiffs’ breach of implied covenant of good faith and fair dealing claimbecause subsection (5) pertains to conveyances and not to the contract. Platt v. Aspenwood Condo. Ass’n, 214 P.3d 1060 (Colo. App. 2009).

Contract for sale of condominium unit is not void under subsection (5).Because contract was not ratified by the unit owners, it is unenforceable, and purchasers’ specific performance claim cannot stand. Nothing in the record shows that unit owners executed any type of agreement approving the sale of two new units. Reading subsections (3) and (4) together, “contract” referred to in subsection (4) must be ratified by the unit owners to render it enforceable. Moreover, subsection (5) pertains to conveyances and not to the contract. Although purchasers entered into contract to purchase a new condominium unit, the unit was not conveyed to them. Thus, subsection (5) was not triggered. Platt v. Aspenwood Condo. Ass’n, 214 P.3d 1060 (Colo. App. 2009).

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§38-33.3-311 Tort and contract liability

Goodman Law Group — Sun, 02 Jan 2022 06:02:37 +0000

Title 38 – Property – Real and Personal

Article 33.3 – Colorado Common Interest Ownership Act

Tort and contract liability

38-33.3-311. Tort and contract liability

(1) Neither the association nor any unit owner except the declarant is liable for any cause of action based upon that declarant’s acts or omissions in connection with any part of the common interest community which that declarant has the responsibility to maintain. Otherwise, any action alleging an act or omission by the association must be brought against the association and not against any unit owner. If the act or omission occurred during any period of declarant control and the association gives the declarant reasonable notice of and an opportunity to defend against the action, the declarant who then controlled the association is liable to the association or to any unit owner for all tort losses not covered by insurance suffered by the association or that unit owner and all costs that the association would not have incurred but for such act or omission. Whenever the declarant is liable to the association under this section, the declarant is also liable for all expenses of litigation, including reasonable attorney fees, incurred by the association. Any statute of limitation affecting the association’s right of action under this section is tolled until the period of declarant control terminates. A unit owner is not precluded from maintaining an action contemplated by this section by being a unit owner or a member or officer of the association.

(2) The declarant is liable to the association for all funds of the association collected during the period of declarant control which were not properly expended.

History

Source: L. 91: Entire article added, p. 1746, § 1, effective July 1, 1992.

State Notes

ANNOTATION

Subsection (1) does not establish the adequacy as a matter of law of the representation by a common interest community association of lot owners belonging to the association who were absent from the underlying action.Because conflicting interests exist between the association and the absent owners, representation was not adequate. When assessing prejudice, the court must consider whether the interests of an absent party are adequately represented by those already a party to the litigation. Clubhouse at Fairway Pines v. Fairway Pines Estates, 214 P.3d 451 (Colo. App. 2008).

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§38-33.3-310 Executive board – conflicts of interest – definitions

Goodman Law Group — Sun, 02 Jan 2022 06:02:37 +0000

Title 38 – Property – Real and Personal

Article 33.3 – Colorado Common Interest Ownership Act

Executive board – conflicts of interest – definitions

(1) Section 7-128-501, C.R.S., shall apply to members of the executive board; except that, as used in that section:

(a) “Corporation” or “nonprofit corporation” means the association.

(b) “Director” means a member of the association’s executive board.

(c) “Officer” means any person designated as an officer of the association and any person to whom the board delegates responsibilities under this article, including, without limitation, a managing agent, attorney, or accountant employed by the board.

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§38-33.3-309 Quorums

Goodman Law Group — Sun, 02 Jan 2022 06:02:37 +0000

Title 38 – Property – Real and Personal

Article 33.3 – Colorado Common Interest Ownership Act

Quorums

38-33.3-309. Quorums

(1) Unless the bylaws provide otherwise, a quorum is deemed present throughout any meeting of the association if persons entitled to cast twenty percent, or, in the case of an association with over one thousand unit owners, ten percent, of the votes which may be cast for election of the executive board are present, in person or by proxy at the beginning of the meeting.

(2) Unless the bylaws specify a larger percentage, a quorum is deemed present throughout any meeting of the executive board if persons entitled to cast fifty percent of the votes on that board are present at the beginning of the meeting or grant their proxy, as provided in section 7-128-205 (4), C.R.S.

History

Source: L. 91: Entire article added, p. 1745, § 1, effective July 1, 1992. L. 98: (2) amended, p. 484, § 16, effective July 1.

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§38-33.3-308 Meetings

Goodman Law Group — Sun, 02 Jan 2022 06:02:37 +0000

Title 38 – Property – Real and Personal

Article 33.3 – Colorado Common Interest Ownership Act

Meetings

38-33.3-308. Meetings

(1) Meetings of the unit owners, as the members of the association, shall be held at least once each year. Special meetings of the unit owners may be called by the president, by a majority of the executive board, or by unit owners having twenty percent, or any lower percentage specified in the bylaws, of the votes in the association. Not less than ten nor more than fifty days in advance of any meeting of the unit owners, the secretary or other officer specified in the bylaws shall cause notice to be hand delivered or sent prepaid by United States mail to the mailing address of each unit or to any other mailing address designated in writing by the unit owner. The notice of any meeting of the unit owners shall be physically posted in a conspicuous place, to the extent that such posting is feasible and practicable, in addition to any electronic posting or electronic mail notices that may be given pursuant to paragraph (b) of subsection (2) of this section. The notice shall state the time and place of the meeting and the items on the agenda, including the general nature of any proposed amendment to the declaration or bylaws, any budget changes, and any proposal to remove an officer or member of the executive board.

(2)

(a) All regular and special meetings of the association’s executive board, or any committee thereof, shall be open to attendance by all members of the association or their representatives. Agendas for meetings of the executive board shall be made reasonably available for examination by all members of the association or their representatives.

(b)

(I) The association is encouraged to provide all notices and agendas required by this article in electronic form, by posting on a website or otherwise, in addition to printed form. If such electronic means are available, the association shall provide notice of all regular and special meetings of unit owners by electronic mail to all unit owners who so request and who furnish the association with their electronic mail addresses. Electronic notice of a special meeting shall be given as soon as possible but at least twenty-four hours before the meeting.

(II) Notwithstanding section 38-33.3-117 (1.5)(i), this paragraph (b) shall not apply to an association that includes time-share units, as defined in section 38-33-110 (7), C.R.S.

(2.5)

(a) Notwithstanding any provision in the declaration, bylaws, or other documents to the contrary, all meetings of the association and board of directors are open to every unit owner of the association, or to any person designated by a unit owner in writing as the unit owner’s representative.

(b) At an appropriate time determined by the board, but before the board votes on an issue under discussion, unit owners or their designated representatives shall be permitted to speak regarding that issue. The board may place reasonable time restrictions on persons speaking during the meeting. If more than one person desires to address an issue and there are opposing views, the board shall provide for a reasonable number of persons to speak on each side of the issue.

(c) Notwithstanding section 38-33.3-117 (1.5)(i), this subsection (2.5) shall not apply to an association that includes time-share units, as defined in section 38-33-110 (7).

(3) The members of the executive board or any committee thereof may hold an executive or closed door session and may restrict attendance to executive board members and such other persons requested by the executive board during a regular or specially announced meeting or a part thereof. The matters to be discussed at such an executive session shall include only matters enumerated in paragraphs (a) to (f) of subsection (4) of this section.

(4) Matters for discussion by an executive or closed session are limited to:

(a) Matters pertaining to employees of the association or the managing agent’s contract or involving the employment, promotion, discipline, or dismissal of an officer, agent, or employee of the association;

(b) Consultation with legal counsel concerning disputes that are the subject of pending or imminent court proceedings or matters that are privileged or confidential between attorney and client;

(d) Matters subject to specific constitutional, statutory, or judicially imposed requirements protecting particular proceedings or matters from public disclosure;

(e) Any matter the disclosure of which would constitute an unwarranted invasion of individual privacy;

(f) Review of or discussion relating to any written or oral communication from legal counsel.

(4.5) Upon the final resolution of any matter for which the board received legal advice or that concerned pending or contemplated litigation, the board may elect to preserve the attorney-client privilege in any appropriate manner, or it may elect to disclose such information, as it deems appropriate, about such matter in an open meeting.

(5) Prior to the time the members of the executive board or any committee thereof convene in executive session, the chair of the body shall announce the general matter of discussion as enumerated in paragraphs (a) to (f) of subsection (4) of this section.

(6) No rule or regulation of the board or any committee thereof shall be adopted during an executive session. A rule or regulation may be validly adopted only during a regular or special meeting or after the body goes back into regular session following an executive session.

(7) The minutes of all meetings at which an executive session was held shall indicate that an executive session was held and the general subject matter of the executive session.

History

Source: L. 91: Entire article added, p. 1745, § 1, effective July 1, 1992. L. 95: Entire section amended, p. 888, § 1, effective July 1. L. 98: (2) amended, p. 484, § 15, effective July 1. L. 2002: (4)(a) amended and (4)(f) added, p. 768, § 5, effective August 7. L. 2005: (3) and (5) amended, p. 781, § 71, effective June 1; (1) and (2) amended and (2.5) and (4.5) added, p. 1384, § 14, effective January 1, 2006. L. 2006: (1), (2.5)(a), and (2.5)(b) amended, p. 1222, § 10, effective May 26.

State Notes

ANNOTATION

Meeting notices were not sufficient under this sectionwhere the first notice stated only that “[we] have been working on a Declarations rewrite and … will be sending [it] via regular mail” and the second notice, which contained the substance of the proposal, was not provided at least ten days before the meeting. Tyra Summit Condos. II Ass’n, Inc. v. Clancy, 2017 COA 73, 413 P.3d 352.

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§38-33.3-307 Upkeep of the common interest community

Goodman Law Group — Sun, 02 Jan 2022 06:02:37 +0000

Title 38 – Property – Real and Personal

Article 33.3 – Colorado Common Interest Ownership Act

Upkeep of the common interest community

38-33.3-307. Upkeep of the common interest community

(1) Except to the extent provided by the declaration, subsection (2) of this section, or section 38-33.3-313 (9), the association is responsible for maintenance, repair, and replacement of the common elements, and each unit owner is responsible for maintenance, repair, and replacement of such owner’s unit. Each unit owner shall afford to the association and the other unit owners, and to their agents or employees, access through such owner’s unit reasonably necessary for those purposes. If damage is inflicted, or a strong likelihood exists that it will be inflicted, on the common elements or any unit through which access is taken, the unit owner responsible for the damage, or expense to avoid damage, or the association if it is responsible, is liable for the cost of prompt repair.

(1.5) Maintenance, repair, or replacement of any drainage structure or facilities, or other public improvements required by the local governmental entity as a condition of development of the common interest community or any part thereof shall be the responsibility of the association, unless such improvements have been dedicated to and accepted by the local governmental entity for the purpose of maintenance, repair, or replacement or unless such maintenance, repair, or replacement has been authorized by law to be performed by a special district or other municipal or quasi-municipal entity.

(2) In addition to the liability that a declarant as a unit owner has under this article, the declarant alone is liable for all expenses in connection with real estate within the common interest community subject to development rights. No other unit owner and no other portion of the common interest community is subject to a claim for payment of those expenses. Unless the declaration provides otherwise, any income or proceeds from real estate subject to development rights inures to the declarant. If the declarant fails to pay all expenses in connection with real estate within the common interest community subject to development rights, the association may pay such expenses, and such expenses shall be assessed as a common expense against the real estate subject to development rights, and the association may enforce the assessment pursuant to section 38-33.3-316 by treating such real estate as if it were a unit. If the association acquires title to the real estate subject to the development rights through foreclosure or otherwise, the development rights shall not be extinguished thereby, and, thereafter, the association may succeed to any special declarant rights specified in a written instrument prepared, executed, and recorded by the association in accordance with the requirements of section 38-33.3-304 (3).

(3) In a planned community, if all development rights have expired with respect to any real estate, the declarant remains liable for all expenses of that real estate unless, upon expiration, the declaration provides that the real estate becomes common elements or units.

History

Source: L. 91: Entire article added, p. 1744, § 1, effective July 1, 1992. L. 93: (2) amended, p. 651, § 17, effective April 30. L. 98: (2) amended, p. 483, § 14, effective July 1.

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