JanetB2 (Colorado)
Posts: 4,219
Posts: 4,219
Posted:
Does anyone familiar with Colorado HOA's know when CCIOA 38-33.3-217(4)(a) and (4)(b) comes into play pertaining to amendments in a Declarant controlled community?
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CCIOA Regarding Amendment to Covenants
Started by JanetB2 • 6 replies • 2410 views
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RogerB (Colorado)
Posts: 5,067
Posts: 5,067
Posted:
Janet, these apply if the associatin is controlled by the CCIOA, which probably is when the Declarant still controls the community. If your developer is not following these guidelines after being made aware of them, you may want to get an attorney involved if the change is important to you and the other homeowners.
(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 sixtyseven
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) (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 sixtyseven
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.
JanetB2 (Colorado)
Posts: 4,219
Posts: 4,219
Posted:
Thank you Roger ...
The Declarant changed the covenants pursuant to 217(1)(a) and reduced the square footage for homes in our subdivision; however, 217(1)(III)This paragraph (a) shall not apply ... (E) To amendments that affect phased communities or declarant-controlled communities. The amendment was also done without a meeting or vote from current homeowners as the Declarant just stated it was because he owned more than 67% of the lots.
Because of what 217(1)(III)(E) states and as changing the square footage was not something the Declarant reserved in our covenants pursuant to 205(1)(h), if I am reading everything correct the Declarant would have needed to make the change pursuant to 217(4)(a) and which would have required 67% of votes allocated to units NOT owned by a Declarant or (4)(b) which would disallow votes from anyone who owned more than 67%. This would make sense for the legislatures to include this language in order to prevent a possible "Declarant Dictatorship".
I just wanted to check with others to make sure I am hopefully reading the CCIOA Statutes correctly. I found when going through you need to be sure and check the definitions on many items to correctly interpret certain verbage.
The Declarant changed the covenants pursuant to 217(1)(a) and reduced the square footage for homes in our subdivision; however, 217(1)(III)This paragraph (a) shall not apply ... (E) To amendments that affect phased communities or declarant-controlled communities. The amendment was also done without a meeting or vote from current homeowners as the Declarant just stated it was because he owned more than 67% of the lots.
Because of what 217(1)(III)(E) states and as changing the square footage was not something the Declarant reserved in our covenants pursuant to 205(1)(h), if I am reading everything correct the Declarant would have needed to make the change pursuant to 217(4)(a) and which would have required 67% of votes allocated to units NOT owned by a Declarant or (4)(b) which would disallow votes from anyone who owned more than 67%. This would make sense for the legislatures to include this language in order to prevent a possible "Declarant Dictatorship".
I just wanted to check with others to make sure I am hopefully reading the CCIOA Statutes correctly. I found when going through you need to be sure and check the definitions on many items to correctly interpret certain verbage.
RogerB (Colorado)
Posts: 5,067
Posts: 5,067
Posted:
Janet, I read 4(b) differently than you. I believe it allows the Declarant the right to amend the Declaration so long as they control over 67% of the votes. And the Declarant, as a class B owner, may have 3, 4, or more votes per lot which they still own. This allows them to protect their investment by amending the Declaration without involving the homeowners during the beginning of the development.
For example: suppose there are 100 lots and 60 lots have been sold to homeowners; and and each class A homeowner has 1 vote/lot while the develoer as a class B owner has 4 votes/lot. Thus, the developer has 160 vote (40 lots x 4 votes/lot) out of a total of 220 votes (60 + 160) or 72% (160/220) of all votes.
For example: suppose there are 100 lots and 60 lots have been sold to homeowners; and and each class A homeowner has 1 vote/lot while the develoer as a class B owner has 4 votes/lot. Thus, the developer has 160 vote (40 lots x 4 votes/lot) out of a total of 220 votes (60 + 160) or 72% (160/220) of all votes.
JanetB2 (Colorado)
Posts: 4,219
Posts: 4,219
Posted:
Hi Roger:
For our subdivision everyone has one vote. I absolutely would not have purchased in a subdivision in which the Declarant had the control of numerous votes. The Declarant is suppose to reserve any rights as far as anything he would like to possibly change via CCIOA 205(1)(h). This is fair as it also lets those who will be purchasing know what he can and cannot change before they spend alot of money on buying a home. My understanding is anything else not reserved increases Declarant rights and must be changed via 217(4)(a) or (4)(b).
217(4)(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.
It does not make any sense with what you stated that (4)(b) would give the Declarant absolute god like control after (4)(a) restricts said control. My understanding is (4)(b) would be the statute that would protect all homeowners from someone, possibly other than Declarant, from having complete dictatorship control. This would then make perfect sense. You absolutely cannot have a complete dictatorship in a HOA or individuals will not be willing to purchase one of the first homes built within an HOA subdivision. This scenario would cause developers to not be able to sell homes in a new development and also affect the real estate market at individuals would not purchase homes within an HOA, or homes in an HOA would loose value.
My issue is there must be something that protects homeowners when they spend $300,000 or more in real estate for their home, that someone cannot immorally and unethically totally destroy their investment value.
For our subdivision everyone has one vote. I absolutely would not have purchased in a subdivision in which the Declarant had the control of numerous votes. The Declarant is suppose to reserve any rights as far as anything he would like to possibly change via CCIOA 205(1)(h). This is fair as it also lets those who will be purchasing know what he can and cannot change before they spend alot of money on buying a home. My understanding is anything else not reserved increases Declarant rights and must be changed via 217(4)(a) or (4)(b).
217(4)(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.
It does not make any sense with what you stated that (4)(b) would give the Declarant absolute god like control after (4)(a) restricts said control. My understanding is (4)(b) would be the statute that would protect all homeowners from someone, possibly other than Declarant, from having complete dictatorship control. This would then make perfect sense. You absolutely cannot have a complete dictatorship in a HOA or individuals will not be willing to purchase one of the first homes built within an HOA subdivision. This scenario would cause developers to not be able to sell homes in a new development and also affect the real estate market at individuals would not purchase homes within an HOA, or homes in an HOA would loose value.
My issue is there must be something that protects homeowners when they spend $300,000 or more in real estate for their home, that someone cannot immorally and unethically totally destroy their investment value.
MaryA1 (Arizona)
Posts: 7,043
Posts: 7,043
Posted:
Janet,
It's certainly not uncommon for the declarant to have more than one vote while still in control of the assn. In fact, this is the norm. The reason is so that he will have control of the assn and the ability to protect his investment.
My interpretation of 217(4)(b) is that a 67% vote is required,whether the developer has 67% of the vote or not, the members must also vote. The statute says that a vote of 67% is required, ". . .including sixty-seven percent of the votes allocated to units not owned by a declarant. . .".
For ex: 100 homes
50 unsold, owned by declarant
50 sold
members and declarant vote to obtain 67% approval
100 homes
67 unsold, owned by declarant
23 sold
declarant has 67% of vote
members must also vote to obtain 67% of vote or 15 votes (23 x .67)
It's certainly not uncommon for the declarant to have more than one vote while still in control of the assn. In fact, this is the norm. The reason is so that he will have control of the assn and the ability to protect his investment.
My interpretation of 217(4)(b) is that a 67% vote is required,whether the developer has 67% of the vote or not, the members must also vote. The statute says that a vote of 67% is required, ". . .including sixty-seven percent of the votes allocated to units not owned by a declarant. . .".
For ex: 100 homes
50 unsold, owned by declarant
50 sold
members and declarant vote to obtain 67% approval
100 homes
67 unsold, owned by declarant
23 sold
declarant has 67% of vote
members must also vote to obtain 67% of vote or 15 votes (23 x .67)
JanetB2 (Colorado)
Posts: 4,219
Posts: 4,219
Posted:
Hi Mary:
I realize it is not uncommon for developer in some HOA's to have more votes; however, as stated before I would not purchase in such a development. On one side you have a developer who is developing a subdivision and under Colorado is suppose to reserve any rights regarding anything he would like to be able to amend. On the other side you have individuals who spend alot of money on homes and also must be protected regarding their real estate investment.
However, CCIOA 217(4)(b) does state that 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.
The important words in this paragraph is NOT apply. The paragraph (a) is the one that states 67%, but does NOT apply pursuant to (4)(b). This is the wording that makes me feel Colorado legislatures were insuring a Declarant protects his investment by reserving any rights he desires, but once he sells any homes the owners are then protected via 217(4)(a) and (4)(b).
I realize it is not uncommon for developer in some HOA's to have more votes; however, as stated before I would not purchase in such a development. On one side you have a developer who is developing a subdivision and under Colorado is suppose to reserve any rights regarding anything he would like to be able to amend. On the other side you have individuals who spend alot of money on homes and also must be protected regarding their real estate investment.
However, CCIOA 217(4)(b) does state that 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.
The important words in this paragraph is NOT apply. The paragraph (a) is the one that states 67%, but does NOT apply pursuant to (4)(b). This is the wording that makes me feel Colorado legislatures were insuring a Declarant protects his investment by reserving any rights he desires, but once he sells any homes the owners are then protected via 217(4)(a) and (4)(b).
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