ARTICLE 33.3 COLORADO COMMON INTEREST OWNERSHIP …

1 ARTICLE COMMON INTEREST OWNERSHIP ACTA nnotationsEditor's note: The provisions of this act are based substantially on the "Uniform CommonInterest OWNERSHIP Act", as promulgated by the National Conference of Commissioners onUniform State Laws. COLORADO did not adopt ARTICLE 4 concerning protection of purchasers andthe optional ARTICLE 5 of said uniform act concerning administration and registration of commoninterest reviews: For ARTICLE " COLORADO COMMON INTEREST OWNERSHIP Act - How it is Doing", see 25 Colo. Law. 17 (November 1996); for ARTICLE , "When the Developer Controls the HomeownerAssociation Board: The Benevolent Dictator?

2 ", see 31 Colo. Law. 91 (January 2002).SectionPART 1 GENERAL PROVISIONS Short Legislative Variation by Separate titles and Applicability of local ordinances, regulations, and building Prohibitions contrary to public policy - patriotic and political expression -emergency vehicles - fire prevention - Eminent Supplemental general principles of law Construction against implicit Uniformity of application and Unconscionable agreement or term of Obligation of good Remedies to be liberally Applicability to new COMMON INTEREST Exception for new small cooperatives and small and limited expense Large planned communities - exemption from certain Applicability to preexisting COMMON INTEREST

3 Procedure to elect treatment under the " COLORADO COMMON INTEREST OwnershipAct". Exception for small preexisting cooperatives and planned Amendments to preexisting governing Extension of declaration Applicability to nonresidential planned Applicability to out-of-state COMMON INTEREST Enforcement - Legislative declaration - alternative dispute resolution encouraged - policystatement 2 CREATION, ALTERATION, AND TERMINATIONOF COMMON INTEREST COMMUNITIES Creation of COMMON INTEREST unit Construction and validity of declaration and Description of Contents of Leasehold COMMON INTEREST Allocation of allocated Limited COMMON Plats and Public disclosures required - identity of association - agent - manager - Responsible governance Executive board member Owner Exercise of development Alterations of Relocation of boundaries between adjoining Subdivision of Easement for Use for sales Easement Amendment of

4 Termination of COMMON INTEREST Rights of secured Master Merger or consolidation of COMMON INTEREST Withdrawal from merged COMMON INTEREST Addition of unspecified real Sale of unit - disclosure to buyer. (Repeal)PART 3 MANAGEMENT OF THE COMMONINTEREST COMMUNITY Organization of unit owners' Powers of unit owners' Executive board members and officers - powers and duties - Construction defect actions - Transfer of special declarant Termination of contracts and leases of Upkeep of the COMMON INTEREST Voting - Executive board - conflicts of INTEREST - Tort and contract Conveyance or encumbrance of COMMON Surplus Assessments for COMMON Lien for Association Association as Other applicable 1 GENERAL Short

5 ARTICLE shall be known and may be cited as the " COLORADO COMMON INTEREST OWNERSHIP Act".Source: L. 91: Entire ARTICLE added, p. 1701, 1, effective July 1, Legislative declaration.(1) The general assembly hereby finds, determines, and declares, as follows:(a) That it is in the best interests of the state and its citizens to establish a clear, comprehensive,and uniform framework for the creation and operation of COMMON INTEREST communities;(b) That the continuation of the economic prosperity of COLORADO is dependent upon thestrengthening of homeowner associations in COMMON INTEREST communities financially throughthe setting of budget guidelines, the creation of statutory assessment liens, the granting of sixmonths' lien priority, the facilitation of borrowing, and more certain powers in the association tosue on behalf of the owners and through enhancing the financial stability of associations byincreasing the association's powers to collect delinquent assessments, late charges.

6 Fines, andenforcement costs;(c) That it is the policy of this state to give developers flexible development rights with specificobligations within a uniform structure of development of a COMMON INTEREST community thatextends through the transition to owner control;(d) That it is the policy of this state to promote effective and efficient property managementthrough defined operational requirements that preserve flexibility for such homeownerassociations;(e) That it is the policy of this state to promote the availability of funds for financing thedevelopment of such homeowner associations by enabling lenders to extend the financialservices to a greater market on a safer, more predictable basis because of standardized practicesand prudent insurance and risk management : L.

7 91: Entire ARTICLE added, p. 1701, 1, effective July 1, is no support for the proposition that enactment of a legislative scheme governing theoperation of homeowners' association thereby transforms such homeowners' association intocities or other governmental entities. Woodmoor Improvement Ass'n v. Brenner, 919 928(Colo. App. 1996). used in the declaration and bylaws of an association, unless specifically provided otherwise orunless the context otherwise requires, and in this ARTICLE :(1) "Affiliate of a declarant" means any person who controls, is controlled by, or is undercommon control with a declarant.

8 A person controls a declarant if the person: Is a generalpartner, officer, director, or employee of the declarant; directly or indirectly, or acting in concertwith one or more other persons or through one or more subsidiaries, owns, controls, holds withpower to vote, or holds proxies representing more than twenty percent of the voting interests ofthe declarant; controls in any manner the election of a majority of the directors of the declarant;or has contributed more than twenty percent of the capital of the declarant. A person is controlledby a declarant if the declarant: Is a general partner, officer, director, or employee of the person;directly or indirectly, or acting in concert with one or more other persons or through one or moresubsidiaries, owns, controls, holds with power to vote, or holds proxies representing more thantwenty percent of the voting interests of the person; controls in any manner the election of amajority of the directors of the person; or has contributed more than twenty percent of the capitalof the person.

9 Control does not exist if the powers described in this subsection (1) are held solelyas security for an obligation and are not exercised.(2) "Allocated interests" means the following interests allocated to each unit :(a) In a condominium , the undivided INTEREST in the COMMON elements, the COMMON expenseliability, and votes in the association;(b) In a cooperative, the COMMON expense liability and the OWNERSHIP INTEREST and votes in theassociation; and(c) In a planned community, the COMMON expense liability and votes in the association.( ) "Approved for development" means that all or some portion of a particular parcel of realproperty is zoned or otherwise approved for construction of residential and other improvementsand authorized for specified densities by the local land use authority having jurisdiction oversuch real property and includes any conceptual or final planned unit development approval.

10 (3) "Association" or " unit owners' association" means a unit owners' association organized undersection (4) "Bylaws" means any instruments, however denominated, which are adopted by theassociation for the regulation and management of the association, including any amendments tothose instruments.(5) " COMMON elements" means:(a) In a condominium or cooperative, all portions of the condominium or cooperative other thanthe units; and(b) In a planned community, any real estate within a planned community owned or leased by theassociation, other than a unit .