Colorado Court Invalidates HOA’s Restated Declaration for Failure to Satisfy Statutory Requirements

Colorado Appellate Court decision (May 18, 2017):

This case involved a dispute between a homeowners association (“Association”) and two homeowners (“Owners”) over the validity of the Association’s amended and restated Declaration (“Amendment”) — the recorded instrument that creates a common interest community and sets forth the rights and responsibilities of owners of properties within the common interest development. The original Declaration was recorded in 1983, and based on its belief that it was outdated and needed to be completely rewritten, Association sought membership approval of the Amendment in 2016. The desired Amendment was ultimately approved by the Court pursuant to a petition that was filed by Association.

Being unhappy with the Amendment, Owners appealed the court’s ruling approving the Amendment on the grounds that Association had not complied with applicable Colorado law regarding the procedure for adopting the Amendment and notice requirements. On review, the appellate court found that Association failed to provide adequate notice to the homeowners of a meeting where the proposed amendment would be discussed, in violation of a statutory requirement that the proposed amendment be discussed at an association meeting. The Court cited a Colorado Statute that states:

Not less than ten nor more than fifty days in advance of any meeting of the unit owners, the secretary or other officer specified in the bylaws shall cause notice to be hand delivered or sent prepaid by United States mail to the mailing address of each unit or to any other mailing address designated in writing by the unit owner. . . . The notice shall state the time and place of the meeting and the items on the agenda, including the general nature of any proposed amendment to the declaration or bylaws . . . .

Thus, because Association had failed to provide the members with the required notice of an association meeting to discuss the proposed amendment, Association did not satisfy all of the statutory requirements for a court to approve the Amendment. Accordingly, the district court’s judgment was reversed and, because Owners were determined to be the prevailing party, the court also awarded them their reasonable attorney fees and costs.

See case decision: Tyra_Summit_Condominiums_II_Ass’n_Inc._v._Clancy_2017_COA_73_(Colo._App._2017)1