First Regular Session
Sixty-first General Assembly
LLS NO. 970471.01 JY
SENATE BILL 97156
STATE OF COLORADO
BY SENATOR Phillips
BUSINESS AFFAIRS & LABOR
A BILL FOR AN ACT
CONCERNING THE "COLORADO COMMON INTEREST OWNERSHIP
(Note: This summary applies to this bill as introduced
and does not necessarily reflect any amendments which may be subsequently
In addition to every contract or duty governed by
the "Colorado Common Interest Ownership Act", specifies
that any declaration, bylaws, rules and regulations, or articles
of incorporation of a unit owners' association imposes an obligation
of good faith in its performance or enforcement. Allows an association
to enter into an intermediate covenant variance, without waiver
of future enforcement rights against a subsequent purchaser, under
certain circumstances. Eliminates the ability of a person to collect
costs and attorney fees for noncompliance with the provisions
of the act without commencing a lawsuit. Rather than requiring
the court to award certain costs and attorney fees to the prevailing
party, requires the court to determine the appropriate liability,
if any, for costs and fees. Prior to exercising certain powers,
requires the association to have specific authorization pursuant
to a declaration or approval of the voting association members.
Specifies that all executive board members and officers, whether
appointed by the declarant, owe a fiduciary duty to the association.
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. 3833.3103 (3) and (16), Colorado Revised Statutes, 1982 Repl. Vol., as amended, are amended to read:
3833.3103. Definitions. As used in the declaration and bylaws of an association, unless specifically provided otherwise or unless the context otherwise requires, and in this article:
(3) "Association" or "unit owners' association" means a unit owners' association organized under section 3833.3301 AND THE MEMBERSHIP THEREOF.
(16) "Executive board" means the body, regardless of name, IF SO designated in the declaration to act on behalf of the association AND WHOSE MEMBERS OWE A FIDUCIARY DUTY TO THE ASSOCIATION.
SECTION 2. 3833.3113, Colorado Revised Statutes, 1982 Repl. Vol., as amended, is amended to read:
3833.3113. Obligation of good faith. Every contract or duty governed by this article AND ANY DECLARATION, BYLAWS, RULES AND REGULATIONS, OR ARTICLES OF INCORPORATION OF AN ASSOCIATION imposes an obligation of good faith in its performance or enforcement. WHERE THE ASSOCIATION IN GOOD FAITH CHOOSES NOT TO PERFORM UNDER OR ENFORCE THE PROVISIONS OF ANY DECLARATIONS, BYLAWS, RULES AND REGULATIONS, OR ARTICLES OF INCORPORATION, THE ASSOCIATION SHALL HAVE THE AUTHORITY TO ENTER INTO AN INTERMEDIATE COVENANT VARIANCE, WITHOUT THE WAIVER OF FUTURE ENFORCEMENT RIGHTS AGAINST A SUBSEQUENT PURCHASER, UPON NOTICE OF THE ASSOCIATION'S DECLARATIONS, BYLAWS, RULES AND REGULATIONS, OR ARTICLES OF INCORPORATION TO THE SUBSEQUENT PURCHASER PRIOR TO CLOSING ON A CONTRACT FOR THE PURCHASE AND SALE OF ANY UNIT.
SECTION 3. 3833.3123 (1), Colorado Revised Statutes, 1982 Repl. Vol., as amended, is amended to read:
limitation. (1) If any
person subject to the provisions of this article fails to comply
with any of its provisions or any provision of the declaration,
bylaws, articles, or rules and regulations, any person or class
of persons adversely affected by the failure to comply may require
reimbursement for collection costs and reasonable attorney fees
and costs incurred as a result of such failure to comply.
the necessity of commencing a legal proceeding.
For each claim, including but not limited to counterclaims, crossclaims,
and thirdparty claims, in any legal proceeding to enforce
the provisions of this article or of the declaration, bylaws,
articles, or rules and regulations, the court shall award
to the party prevailing on such claim the prevailing party's reasonable
collection costs and attorney fees and costs incurred in asserting
or defending the claim DETERMINE
THE LIABILITY, IF ANY, OF THE PARTIES IN THE LEGAL PROCEEDING
FOR COSTS AND ATTORNEY FEES.
SECTION 4. The introductory portion to 3833.3302 (1), Colorado Revised Statutes, 1982 Repl. Vol., as amended, is amended, and the said 3833.3302 is further amended BY THE ADDITION OF A NEW SUBSECTION, to read:
3833.3302. Powers of unit
owners' association. (1) Except
as provided in
SUBSECTIONS (1.5) AND (2) of this section and subject to the provisions
of the declaration, the association, without specific authorization
in the declaration, may:
(1.5) (a) EXCEPT AS PROVIDED IN PARAGRAPH (b) OF THIS SUBSECTION (1.5) AND PRIOR TO EXERCISING ANY OF THE POWERS SPECIFIED IN SUBSECTION (1) OF THIS SECTION, IF THE ASSOCIATION HAS ANY MEMBERS WHO ARE ENTITLED TO VOTE, A MAJORITY OF THE VOTING MEMBERS SHALL APPROVE THE EXERCISE OF SUCH POWERS.
(b) THE POWERS OF THE ASSOCIATION SPECIFIED IN PARAGRAPHS (a), (b), (d), (g), (k), (l), (o), AND (p) OF SUBSECTION (1) OF THIS SECTION SHALL BE EXERCISED ONLY PURSUANT TO SPECIFIC AUTHORIZATION IN THE DECLARATION GRANTING SUCH POWERS OR UPON APPROVAL BY A TWOTHIRDS MAJORITY OF THE VOTING MEMBERS OF THE ASSOCIATION.
SECTION 5. 3833.3303 (1) and (2), Colorado Revised Statutes, 1982 Repl. Vol., as amended, are amended to read:
3833.3303. Executive board
members and officers. (1) Except
as provided in the declaration, the bylaws,
subsection (3) of this section, SECTION 3833.3302
(1.5), or any other provisions of this article, the executive
board may act in all instances on behalf of the association.
appointed by the declarant, In the
performance of their duties, the officers and members of the executive
board are required to exercise the care required of fiduciaries
of the unit owners.
appointed by the declarant, No member
of the executive board and no officer shall be liable for actions
taken or omissions made in the performance of such member's duties
except for wanton and willful acts or omissions.
SECTION 6. Effective date applicability. This act shall take effect upon passage, and section 3 shall apply to causes of action filed on or after said date.
SECTION 7. Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.