C.R.S. Section 38-33.3-218
Termination of common interest community

(1)

Except in the case of a taking of all the units by eminent domain, or in the case of foreclosure against an entire cooperative of a security interest that has priority over the declaration, a common interest community may be terminated only by 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 in the common interest community are restricted exclusively to nonresidential uses.

(1.5)

No planned community that is required to exist pursuant to a development or site plan shall be terminated by agreement of unit owners, unless a copy of the termination agreement is sent by certified mail or hand delivered to the governing body of every municipality in which a portion of the planned community is situated or, if the planned community is situated in an unincorporated area, to the board of county commissioners for every county in which a portion of the planned community is situated.

(2)

An agreement of unit owners to terminate must be evidenced by their execution of a termination agreement or ratifications thereof in the same manner as a deed, by the requisite number of unit owners. The termination agreement must specify a date after which the agreement will be void unless it is recorded before that date. A termination agreement and all ratifications thereof must be recorded in every county in which a portion of the common interest community is situated and is effective only upon recordation.

(3)

In the case of a condominium or planned community containing only units having horizontal boundaries described in the declaration, a termination agreement may provide that all of the common elements and units of the common interest community must be sold following termination. If, pursuant to the agreement, any real estate in the common interest community is to be sold following termination, the termination agreement must set forth the minimum terms of the sale.

(4)

In the case of a condominium or planned community containing any units not having horizontal boundaries described in the declaration, a termination agreement may provide for sale of the common elements, but it may not require that the units be sold following termination, unless the declaration as originally recorded provided otherwise or all the unit owners consent to the sale.

(5)

Subject to the provisions of a termination agreement described in subsections (3) and (4) of this section, the association, on behalf of the unit owners, may contract for the sale of real estate in a common interest community following termination, but the contract is not binding on the unit owners until approved pursuant to subsections (1) and (2) of this section. If any real estate is to be sold following termination, title to that real estate, upon termination, vests in the association as trustee for the holders of all interests in the units. Thereafter, the association has all the powers necessary and appropriate to effect the sale. Until the sale has been concluded and the proceeds thereof distributed, the association continues in existence with all the powers it had before termination. Proceeds of the sale must be distributed to unit owners and lienholders as their interests may appear, in accordance with subsections (8), (9), and (10) of this section, taking into account the value of property owned or distributed that is not sold so as to preserve the proportionate interests of each unit owner with respect to all property cumulatively. Unless otherwise specified in the termination agreement, as long as the association holds title to the real estate, each unit owner and the unit owner’s successors in interest have an exclusive right to occupancy of the portion of the real estate that formerly constituted the unit. During the period of that occupancy, each unit owner and the unit owner’s successors in interest remain liable for all assessments and other obligations imposed on unit owners by this article or the declaration.

(6)

Intentionally left blank —Ed.

(a)

In a planned community, if all or a portion of the common elements are not to be sold following termination, title to the common elements not sold vests in the unit owners upon termination as tenants in common in fractional interests that maintain, after taking into account the fair market value of property owned and the proceeds of property sold, their respective interests as provided in subsection (10) of this section with respect to all property appraised under said subsection (10), and liens on the units shift accordingly.

(b)

In a common interest community, containing units having horizontal boundaries described in the declaration, title to the units not to be sold following termination vests in the unit owners upon termination as tenants in common in fractional interests that maintain, after taking into account the fair market value of property owned and the proceeds of property sold, their respective interests as provided in subsection (10) of this section with respect to all property appraised under said subsection (10), and liens on the units shift accordingly. While the tenancy in common exists, each unit owner and the unit owner’s successors in interest have an exclusive right to occupancy of the portion of the real estate that formerly constituted such unit.

(7)

Following termination of the common interest community, the proceeds of any sale of real estate, together with the assets of the association, are held by the association as trustee for unit owners and holders of liens on the units as their interests may appear.

(8)

Upon termination of a condominium or planned community, creditors of the association who obtain a lien and duly record it in every county in which any portion of the common interest community is located are to be treated as if they had perfected liens on the units immediately before termination or when the lien is obtained and recorded, whichever is later.

(9)

In a cooperative, the declaration may provide that all creditors of the association have priority over any interests of unit owners and creditors of unit owners. In that event, upon termination, creditors of the association who obtain a lien and duly record it in every county in which any portion of the cooperative is located are to be treated as if they had perfected liens against the cooperative immediately before termination or when the lien is obtained and recorded, whichever is later. Unless the declaration provides that all creditors of the association have that priority:

(a)

The lien of each creditor of the association which was perfected against the association before termination becomes, upon termination, a lien against each unit owner’s interest in the unit as of the date the lien was perfected;

(b)

Any other creditor of the association who obtains a lien and duly records it in every county in which any portion of the cooperative is located is to be treated upon termination as if the creditor had perfected a lien against each unit owner’s interest immediately before termination or when the lien is obtained and recorded, whichever is later;

(c)

The amount of the lien of an association’s creditor described in paragraphs (a) and (b) of this subsection (9) against each unit owner’s interest must be proportionate to the ratio which each unit’s common expense liability bears to the common expense liability of all of the units;

(d)

The lien of each creditor of each unit owner which was perfected before termination continues as a lien against that unit owner’s unit as of the date the lien was perfected; and

(e)

The assets of the association must be distributed to all unit owners and all lienholders as their interests may appear in the order described above. Creditors of the association are not entitled to payment from any unit owner in excess of the amount of the creditor’s lien against that unit owner’s interest.

(10)

The respective interests of unit owners referred to in subsections (5) to (9) of this section are as follows:

(a)

Except as provided in paragraph (b) of this subsection (10), the respective interests of unit owners are the combined fair market values of their units, allocated interests, any limited common elements, and, in the case of a planned community, any tenant in common interest, immediately before the termination, as determined by one or more independent appraisers selected by the association. The decision of the independent appraisers shall be distributed to the unit owners and becomes final unless disapproved within thirty days after distribution by unit owners of units to which twenty-five percent of the votes in the association are allocated. The proportion of any unit owner’s interest to that of all unit owners is determined by dividing the fair market value of that unit owner’s unit and its allocated interests by the total fair market values of all the units and their allocated interests.

(b)

If any unit or any limited common element is destroyed to the extent that an appraisal of the fair market value thereof prior to destruction cannot be made, the interests of all unit owners are:

(I)

In a condominium, their respective common element interests immediately before the termination;

(II)

In a cooperative, their respective ownership interests immediately before the termination; and

(III)

In a planned community, their respective common expense liabilities immediately before the termination.

(11)

In a condominium or planned community, except as provided in subsection (12) of this section, foreclosure or enforcement of a lien or encumbrance against the entire common interest community does not terminate, of itself, the common interest community. Foreclosure or enforcement of a lien or encumbrance against a portion of the common interest community other than withdrawable real estate does not withdraw that portion from the common interest community. Foreclosure or enforcement of a lien or encumbrance against withdrawable real estate does not withdraw, of itself, that real estate from the common interest community, but the person taking title thereto may require from the association, upon request, an amendment to the declaration excluding the real estate from the common interest community prepared, executed, and recorded by the association.

(12)

In a condominium or planned community, if a lien or encumbrance against a portion of the real estate comprising the common interest community has priority over the declaration and the lien or encumbrance has not been partially released, the parties foreclosing the lien or encumbrance, upon foreclosure, may record an instrument excluding the real estate subject to that lien or encumbrance from the common interest community. The board of directors shall reallocate interests as if the foreclosed section were taken by eminent domain by an amendment to the declaration prepared, executed, and recorded by the association.

Source: Section 38-33.3-218 — Termination of common interest community, https://leg.­colorado.­gov/sites/default/files/images/olls/crs2023-title-38.­pdf (accessed Oct. 20, 2023).

38‑33.3‑101
Short title 38‑33.3‑102
Legislative declaration 38‑33.3‑103
Definitions 38‑33.3‑104
Variation by agreement 38‑33.3‑105
Separate titles and taxation 38‑33.3‑106
Applicability of local ordinances, regulations, and building codes 38‑33.3‑106.5
Prohibitions contrary to public policy - patriotic, political, or religious expression - public rights-of-way - fire prevention - renewable energy generation devices - affordable housing - drought prevention measures - child care - definitions 38‑33.3‑106.7
Unreasonable restrictions on energy efficiency measures - definitions 38‑33.3‑106.8
Unreasonable restrictions on electric vehicle charging systems and electric vehicle parking - legislative declaration - definitions 38‑33.3‑107
Eminent domain 38‑33.3‑108
Supplemental general principles of law applicable 38‑33.3‑109
Construction against implicit repeal 38‑33.3‑110
Uniformity of application and construction 38‑33.3‑111
Severability 38‑33.3‑112
Unconscionable agreement or term of contract 38‑33.3‑113
Obligation of good faith 38‑33.3‑114
Remedies to be liberally administered 38‑33.3‑115
Applicability to new common interest communities 38‑33.3‑116
Exception for new small cooperatives and small and limited expense planned communities 38‑33.3‑116.3
Large planned communities - exemption from certain requirements 38‑33.3‑117
Applicability to preexisting common interest communities 38‑33.3‑118
Procedure to elect treatment under the “Colorado Common Interest Ownership Act” 38‑33.3‑119
Exception for small preexisting cooperatives and planned communities 38‑33.3‑120
Amendments to preexisting governing instruments 38‑33.3‑120.5
Extension of declaration term 38‑33.3‑121
Applicability to nonresidential planned communities 38‑33.3‑122
Applicability to out-of-state common interest communities 38‑33.3‑123
Enforcement - limitation 38‑33.3‑124
Legislative declaration - alternative dispute resolution encouraged - policy statement required 38‑33.3‑201
Creation of common interest communities 38‑33.3‑202
Unit boundaries 38‑33.3‑203
Construction and validity of declaration and bylaws 38‑33.3‑204
Description of units 38‑33.3‑205
Contents of declaration 38‑33.3‑206
Leasehold common interest communities 38‑33.3‑207
Allocation of allocated interests 38‑33.3‑208
Limited common elements 38‑33.3‑209
Plats and maps 38‑33.3‑209.4
Public disclosures required - identity of association - agent - manager - contact information 38‑33.3‑209.5
Responsible governance policies - due process for imposition of fines - procedure for collection of delinquent accounts - enforcement through small claims court - definitions 38‑33.3‑209.6
Executive board member education 38‑33.3‑209.7
Owner education 38‑33.3‑210
Exercise of development rights 38‑33.3‑211
Alterations of units 38‑33.3‑212
Relocation of boundaries between adjoining units 38‑33.3‑213
Subdivision of units 38‑33.3‑214
Easement for encroachments 38‑33.3‑215
Use for sales purposes 38‑33.3‑216
Easement rights 38‑33.3‑217
Amendment of declaration 38‑33.3‑218
Termination of common interest community 38‑33.3‑219
Rights of secured lenders 38‑33.3‑220
Master associations 38‑33.3‑221
Merger or consolidation of common interest communities 38‑33.3‑221.5
Withdrawal from merged common interest community 38‑33.3‑222
Addition of unspecified real estate 38‑33.3‑301
Organization of unit owners’ association 38‑33.3‑302
Powers of unit owners’ association 38‑33.3‑302.5
Unit owners’ access to common elements - duties of association - unreasonable restrictions and prohibitions prohibited - notice of restriction or prohibition required 38‑33.3‑303
Executive board members and officers - powers and duties - reserve funds - reserve study - audit 38‑33.3‑303.5
Construction defect actions - disclosure - approval by unit owners - definitions - exemptions 38‑33.3‑304
Transfer of special declarant rights 38‑33.3‑305
Termination of contracts and leases of declarant 38‑33.3‑306
Bylaws 38‑33.3‑307
Upkeep of the common interest community 38‑33.3‑308
Meetings 38‑33.3‑309
Quorums 38‑33.3‑310
Voting - proxies 38‑33.3‑310.5
Executive board - conflicts of interest - definitions 38‑33.3‑311
Tort and contract liability 38‑33.3‑312
Conveyance or encumbrance of common elements 38‑33.3‑313
Insurance 38‑33.3‑314
Surplus funds 38‑33.3‑315
Assessments for common expenses 38‑33.3‑316
Lien for assessments - liens for fines, fees, charges, costs, and attorney fees - limitations 38‑33.3‑316.3
Collections - limitations - violations 38‑33.3‑316.5
Time share estate - foreclosure - definitions 38‑33.3‑317
Association records - rules - applicability 38‑33.3‑318
Association as trustee 38‑33.3‑319
Other applicable statutes 38‑33.3‑401
Registration - annual fees
Green check means up to date. Up to date

Current through Fall 2024

§ 38-33.3-218’s source at colorado​.gov