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cksiiEditor (Colorado)
Posts: 12
Posted:
I purchased property in 2001 in a rural sub-division in Colorado that consists of approximately 1500 lots. Each lot owner is responsible for drilling their own private well. Prior to making my purchase, I was given a copy of the covenants. I had heard over the years that their was a problem with the covenants and asked on the community web site about the covenants' legitimacy. I was assured on a couple of occasions by the HOA President that there was no problem.

Two weeks ago, I received a package in the mail that consisted of a completely new Declaration of Covenants and letter from a legal firm. The letter said that the original covenants expired and that I need to sign the new Declaration, which will acknowledge that I am a member of the Association and subject to dues assessments. It also said that if I didn't sign, that I would not be a member of the Association, and would therefore lose my water rights.

This did not sit well. I immediately downloaded all of the documents that were on the community web site and started reading. The Articles of Incorporation for the Association define a member as anyone who has a duly executed deed. In other words, if you bought property in the sub-division, you were automatically a member.

I then asked the HOA President why I would not be a member given the fact that the Articles of Incorporation defined the terms of membership. He replied that "it is the law" and made a reference to C.R.S 38-33.3-118 which is part of the 50-page CCIOA document. I read that particular clause and it in no way answers my question.

Here is my question to the forum. Are the Articles of Incorporation invalided or altered by the passage of CCIOA or any other Colorado statute? It appears that the HOA Board discovered that the covenants, which provided for assessments, liens, etc, have indeed expired and they no longer have the ability to force people to pay their dues. It also appears that in response to that predicament, they sent a threatening letter from the HOA attorney in the hopes that they could scare people into signing the new Declaration.

Any thoughts?
DJ1 (Ontario)
Posts: 798
Posted:
General thought is that if they are trying to threaten/coerce you to sign they know they have a problem and they can't make a valid non-threat reason to get you to sign. As I'm sure others will suggest, talk to your lawyer/title insurer.

We were in a similar situation where it was discovered the developer didn't register the CCR's on all titles in our subdivision. The homeowner members of the board went door to door to the individuals who didn't have the ccr's registered, and used a variety of tactics to convince folks to sign, not all of them honest or proper imo. The board was scared the whole HOA concept could fall apart I guess, but I always felt, since the developer never conveyed the same story to all buyers it would be best to start new, give everybody the facts as to what the CCR's involved (powers,responsibilities,liens etc) and let the homeowners make a truly informed decision as to whether to go forward...only then could it be a success. Forcing people into something just leads to problems.
BradP (Kansas)
Posts: 2,640
Posted:
On the surface it sounds like a scare tactic. If the covenants expired, then there is no HOA. Does the HOA pay for your water, how is it distributed to you?

On the flip side, is there any benefit to having an HOA, are there common areas that are utilized or services provided?

I guess if the only thing you will lose is water talk to the local water municipality and see what it takes to set you up by yourself.
DJ1 (Ontario)
Posts: 798
Posted:
"Each lot owner is responsible for drilling their own private well."

On their own lot or on HOA common area? If on my own lot I don't see the threat working. They don't own the water aquifers/water rights do they? If so tell em' you are going to charge them rent for allowing water to run under your lot! :)
JM2 (Oregon)
Posts: 439
Posted:
Hi:

I would suggest reviewing the situation with either a real estate laywer who is well versed in HOA matters, or a HOA lawyer who neither represents the HOA nor the developer.

J. Patrick Moore, CMCA
RogerB (Colorado)
Posts: 5,067
Posted:
Greg, in Colorado ownership of water rights can be very tricky. I think the key question to answer is who owns the water rights under your lot. Your documents from the title company may or may not answer this. You can also call the county clerk's (or engineer's?) office and ask how to find out who owns the water rights.

Perhaps the legal firm is simply providing info to cover their legal a**. Is
it possible the new HOA may be able to maintain ownership of the water rights(if they ever had them) or are they just trying to get everyone to sign up?
DJ1 (Ontario)
Posts: 798
Posted:
Perhaps a way around the issue IF the HOA does own the water rights.

"Exempt Well Permits, however, can be obtained for wells that pump less that 15 gallons per minute. For these wells, the state will give well permits that are exempt from the priority system."

http://www.blm.gov/nstc/WaterLaws/colorado.html

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