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resources / Statutes / Colorado Common Interest Ownership Act / §38-33.3-217

§38-33.3-217 Amendment of declaration

Title 38 – Property – Real and Personal

Article 33.3 – Colorado Common Interest Ownership Act

Amendment of declaration

38-33.3-217. Amendment of declaration

(1)

(a)

(I) Except as otherwise provided in subparagraphs (II) and (III) of this paragraph (a), the declaration, including the plats and maps, may be amended only by the affirmative vote or agreement of unit owners of units to which more than fifty percent of the votes in the association are allocated or any larger percentage, not to exceed sixty-seven percent, that the declaration specifies. Any provision in the declaration that purports to specify a percentage larger than sixty-seven percent is hereby declared void as contrary to public policy, and until amended, such provision shall be deemed to specify a percentage of sixty-seven percent. The declaration may specify a smaller percentage than a simple majority only if all of the units are restricted exclusively to nonresidential use. Nothing in this paragraph (a) shall be construed to prohibit the association from seeking a court order, in accordance with subsection (7) of this section, to reduce the required percentage to less than sixty-seven percent.
(II) If the declaration provides for an initial period of applicability to be followed by automatic extension periods, the declaration may be amended at any time in accordance with subparagraph (I) of this paragraph (a).
(III) This paragraph (a) shall not apply:

(A) To the extent that its application is limited by subsection (4) of this section;
(B) To amendments executed by a declarant under section 38-33.3-205 (4) and (5), 38-33.3-208 (3), 38-33.3-209 (6), 38-33.3-210, or 38-33.3-222;
(C) To amendments executed by an association under section 38-33.3-107, 38-33.3-206 (4), 38-33.3-208 (2), 38-33.3-212, 38-33.3-213, or 38-33.3-218 (11) and (12);
(D) To amendments executed by the district court for any county that includes all or any portion of a common interest community under subsection (7) of this section; or
(E) To amendments that affect phased communities or declarant-controlled communities.

(b)

(I) If the declaration requires first mortgagees to approve or consent to amendments, but does not set forth a procedure for registration or notification of first mortgagees, the association may:

(A) Send a dated, written notice and a copy of any proposed amendment by certified mail to each first mortgagee at its most recent address as shown on the recorded deed of trust or recorded assignment thereof; and
(B) Cause the dated notice, together with information on how to obtain a copy of the proposed amendment, to be printed in full at least twice, on separate occasions at least one week apart, in a newspaper of general circulation in the county in which the common interest community is located.

(II) A first mortgagee that does not deliver to the association a negative response within sixty days after the date of the notice specified in subparagraph (I) of this paragraph (b) shall be deemed to have approved the proposed amendment.
(III) The notification procedure set forth in this paragraph (b) is not mandatory. If the consent of first mortgagees is obtained without resort to this paragraph (b), and otherwise in accordance with the declaration, the notice to first mortgagees shall be considered sufficient.

(2) No action to challenge the validity of an amendment adopted by the association pursuant to this section may be brought more than one year after the amendment is recorded.
(3) Every amendment to the declaration must be recorded in every county in which any portion of the common interest community is located and is effective only upon recordation. An amendment must be indexed in the grantee’s index in the name of the common interest community and the association and in the grantor’s index in the name of each person executing the amendment.
(4)

(a) Except to the extent expressly permitted or required by other provisions of this article, no amendment may create or increase special declarant rights, increase the number of units, or change the boundaries of any unit or the allocated interests of a unit in the absence of a vote or agreement of unit owners of units to which 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, are allocated or any larger percentage the declaration specifies. The declaration may specify a smaller percentage only if all of the units are restricted exclusively to nonresidential use.
(b) The sixty-seven-percent maximum percentage stated in paragraph (a) of subsection (1) of this section shall not apply to any common interest community in which one unit owner, by virtue of the declaration, bylaws, or other governing documents of the association, is allocated sixty-seven percent or more of the votes in the association.

(4.5) Except to the extent expressly permitted or required by other provisions of this article, no amendment may change the uses to which any unit is restricted in the absence of a vote or agreement of unit owners of units to which at least sixty-seven percent of the votes in the association are allocated or any larger percentage the declaration specifies. The declaration may specify a smaller percentage only if all of the units are restricted exclusively to nonresidential use.
(5) Amendments to the declaration required by this article to be recorded by the association shall be prepared, executed, recorded, and certified on behalf of the association by any officer of the association designated for that purpose or, in the absence of designation, by the president of the association.
(6) All expenses associated with preparing and recording an amendment to the declaration shall be the sole responsibility of:

(a) In the case of an amendment pursuant to sections 38-33.3-208 (2), 38-33.3-212, and 38-33.3-213, the unit owners desiring the amendment; and
(b) In the case of an amendment pursuant to section 38-33.3-208 (3), 38-33.3-209 (6), or 38-33.3-210, the declarant; and
(c) In all other cases, the association.

(7)

(a) The association, acting through its executive board pursuant to section 38-33.3-303 (1), may petition the district court for any county that includes all or any portion of the common interest community for an order amending the declaration of the common interest community if:

(I) The association has twice sent notice of the proposed amendment to all unit owners that are entitled by the declaration to vote on the proposed amendment or are required for approval of the proposed amendment by any means allowed pursuant to the provisions regarding notice to members in sections 7-121-402 and 7-127-104, C.R.S., of the “Colorado Revised Nonprofit Corporation Act”, articles 121 to 137 of title 7, C.R.S.;
(II) The association has discussed the proposed amendment during at least one meeting of the association; and
(III) Unit owners of units to which are allocated more than fifty percent of the number of consents, approvals, or votes of the association that would be required to adopt the proposed amendment pursuant to the declaration have voted in favor of the proposed amendment.

(b) A petition filed pursuant to paragraph (a) of this subsection (7) shall include:

(I) A summary of:

(A) The procedures and requirements for amending the declaration that are set forth in the declaration;
(B) The proposed amendment to the declaration;
(C) The effect of and reason for the proposed amendment, including a statement of the circumstances that make the amendment necessary or advisable;
(D) The results of any vote taken with respect to the proposed amendment; and
(E) Any other matters that the association believes will be useful to the court in deciding whether to grant the petition; and

(II) As exhibits, copies of:

(A) The declaration as originally recorded and any recorded amendments to the declaration;
(B) The text of the proposed amendment;
(C) Copies of any notices sent pursuant to subparagraph (I) of paragraph (a) of this subsection (7); and
(D) Any other documents that the association believes will be useful to the court in deciding whether to grant the petition.

(c) Within three days of the filing of the petition, the district court shall set a date for hearing the petition. Unless the court finds that an emergency requires an immediate hearing, the hearing shall be held no earlier than forty-five days and no later than sixty days after the date the association filed the petition.
(d) No later than ten days after the date for hearing a petition is set pursuant to paragraph (c) of this subsection (7), the association shall:

(I) Send notice of the petition by any written means allowed pursuant to the provisions regarding notice to members in sections 7-121-402 and 7-127-104, C.R.S., of the “Colorado Revised Nonprofit Corporation Act”, articles 121 to 137 of title 7, C.R.S., to any unit owner, by first-class mail, postage prepaid or by hand delivery to any declarant, and by first-class mail, postage prepaid, to any lender that holds a security interest in one or more units and is entitled by the declaration or any underwriting guidelines or requirements of that lender or of the federal national mortgage association, the federal home loan mortgage corporation, the federal housing administration, the veterans administration, or the government national mortgage corporation to vote on the proposed amendment. The notice shall include:

(A) A copy of the petition which need not include the exhibits attached to the original petition filed with the district court;
(B) The date the district court will hear the petition; and
(C) A statement that the court may grant the petition and order the proposed amendment to the declaration unless any declarant entitled by the declaration to vote on the proposed amendment, the federal housing administration, the veterans administration, more than thirty-three percent of the unit owners entitled by the declaration to vote on the proposed amendment, or more than thirty-three percent of the lenders that hold a security interest in one or more units and are entitled by the declaration to vote on the proposed amendment file written objections to the proposed amendment with the court prior to the hearing;

(II) File with the district court:

(A) A list of the names and mailing addresses of declarants, unit owners, and lenders that hold a security interest in one or more units and that are entitled by the declaration to vote on the proposed amendment; and
(B) A copy of the notice required by subparagraph (I) of this paragraph (d).

(e) The district court shall grant the petition after hearing if it finds that:

(I) The association has complied with all requirements of this subsection (7);
(II) No more than thirty-three percent of the unit owners entitled by the declaration to vote on the proposed amendment have filed written objections to the proposed amendment with the court prior to the hearing;
(III) Neither the federal housing administration nor the veterans administration is entitled to approve the proposed amendment, or if so entitled has not filed written objections to the proposed amendment with the court prior to the hearing;
(IV) Either the proposed amendment does not eliminate any rights or privileges designated in the declaration as belonging to a declarant or no declarant has filed written objections to the proposed amendment with the court prior to the hearing;
(V) Either the proposed amendment does not eliminate any rights or privileges designated in the declaration as belonging to any lenders that hold security interests in one or more units and that are entitled by the declaration to vote on the proposed amendment or no more than thirty-three percent of such lenders have filed written objections to the proposed amendment with the court prior to the hearing; and
(VI) The proposed amendment would neither terminate the declaration nor change the allocated interests of the unit owners as specified in the declaration, except as allowed pursuant to section 38-33.3-315.

(f) Upon granting a petition, the court shall enter an order approving the proposed amendment and requiring the association to record the amendment in each county that includes all or any portion of the common interest community. Once recorded, the amendment shall have the same legal effect as if it were adopted pursuant to any requirements set forth in the declaration.

History


Source: L. 91: Entire article added, p. 1727, § 1, effective July 1, 1992. L. 93: (1) amended, p. 649, § 14, effective April 30. L. 98: (1) and (4) amended and (4.5) added, p. 482, § 10, effective July 1. L. 99: (1) amended and (7) added, p. 692, § 1, effective May 19; (1) amended, p. 629, § 38, effective August 4. L. 2005: (1) amended, p. 1380, § 8, effective June 6. L. 2006: (1) and (4) amended, p. 1219, § 8, effective May 26.

State Notes

Notes

Editor’s note: 

Amendments to subsection (1) by Senate Bill 99-221 and House Bill 99-1360 were harmonized.

ANNOTATION

Requiring a declarant’s consent to amend a declaration does not violate subsection (1).The declarant consent requirement does not exceed the sixty-seven percent limit on the maximum number of unit owners required to amend a declaration; rather, it is a separate and additional requirement that is permissible under the statute. Vallagio at Inverness v. Metro. Homes, 2015 COA 65, 412 P.3d 709, aff’d, 2017 CO 69, 395 P.3d 788.

Consent of lenders is also a permissible requirement.DA Mtn. Rentals v. Lodge at Lionshead, 2016 COA 141, 409 P.3d 564.

When declaration may require more than sixty-seven percent maximum percentage.Changes in the allocated interests of a unit, for example, “the undivided interests in and to the general common elements appurtenant to each unit”, are among those for which subsection (4)(a) allows the declaration to require greater than a sixty-seven percent vote. Therefore, the declaration’s requirement for unanimous consent applies to this provision despite the adoption of amendments to other provisions by a two-thirds vote. DA Mtn. Rentals v. Lodge at Lionshead, 2016 COA 141, 409 P.3d 564; Francis v. Aspen Mtn. Condo. Ass’n, 2017 COA 19, 401 P.3d 125.

The phrase in subsection (4)(a), “or any larger percentage the declaration specifies”,recognizes the continued validity of any pre-Colorado Common Interest Ownership Act declaration requirement for a voting threshold in excess of sixty-seven percent in order to change the allocated interest of a unit. Such alterations of property interests are much more consequential than the goals of efficiency and flexibility that are deemed sufficiently protected by the sixty-seven percent threshold referenced in subsection (1)(a)(I). Francis v. Aspen Mtn. Condo. Ass’n, 2017 COA 19, 401 P.3d 125.

Because subsections (4) and (4.5) use the term “any unit”, rather than “all units”,and regardless of what owner approval percentage may be required procedurally, substantively subsections (4) and (4.5) permit changes to building and access envelopes of less than all the lots in a common interest community. Giguere v. SJS Family Enters., 155 P.3d 462 (Colo. App. 2006).

Although subsection (4.5) governs situations where homeowners would like to change an enumerated use to which a lot is restricted, it does not operate to precludehomeowners from seeking to create a new use restriction or to remove a specifically permitted land use pursuant to the terms of a declaration. Good v. Bear Canyon Ranch Ass’n, 160 P.3d 251 (Colo. App. 2007).

This section contains no time limit, but time limits in corporate law may apply.Where an association was organized as a nonprofit corporation, the sixty-day time period specified in § 7-127-107 of the nonprofit corporation statutes governed the procedure for adoption of a proposal to amend a declaration without a meeting. Triple Crown v. Vill. Homes of Colo., 2013 COA 150M, 328 P.3d 275.

Subsection (7) incorporates all applicable meeting notice requirements.Where the proposed amendments were allegedly discussed at a meeting, but the notice of that meeting was not sufficient under § 38-33.3-308 (1), the court could not find that “[t]he association [had] complied with all requirements of this subsection (7).” Tyra Summit Condos. II Ass’n, Inc. v. Clancy, 2017 COA 73, 413 P.3d 352.