Community E-ssentials

September 2002 ISSUE 10   Volume 1 Issue 10  
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CONTENTS
The Drought and Your Landscaping Contracts
Complaints from Anonymous Sources
Spoliation of Evidence and Record Retention Policies
Drought Update: Colorado Springs Limits Covenant Enforcement
Declaration Amendments Via Document or the Court
Declaration Amendments Via Document or the Court
The amendment provision set out in the declaration governs amendment of the declaration. Until recently there have been few issues regarding those procedures. However, with the amendment of C.R.S. § 38-33.3-217 in 1999 and the decision by the Colorado Court of Appeals in West v. Evergreen Highlands Association, specific language in the amendment procedure takes on heightened significance.
 
Amendments Via Document
 
In West v. Evergreen Highlands Association, the Colorado Court of appeals limited the ability of the association to add a new covenant requiring mandatory membership and assessments based upon the specific amendment language in the original covenants. The 1972 protective covenants for Evergreen Highlands provided that:
 
These covenants shall run with the land and shall bind all parties and all persons claiming under them for a period of ten years from the date of filing . . . and shall automatically be continued thereafter for successive periods of ten years each; provided, however, that the owners of seventy-five percent of the lots which are subject to these covenants . . . may change or modify any one or more of said restrictions, by executing and acknowledging an appropriate agreement ...
 
The Court concluded that the ability to “change or modify” the restrictions did not include a right to add new restrictions. Consequently, amendment procedures must now be scrutinized based upon the exact language contained in the declaration. There may be limits depending on whether the amendment is to revise existing provisions or to add provisions where the declaration is currently silent.
 
Amendments Via Court Procedure
 
If an association can’t get the necessary owner consent or if mortgagee consent is required, a court approved amendment may be the solution to getting the declaration amended. C.R.S. § 38-33.3-217, permits court sanctioned amendments to declarations. The following steps must be accomplished to take advantage of this statute:
 
1.     All owners must receive at least two notices (by any means consistent with the Colorado Revised Nonprofit Corporation Act) of the proposed amendment;
 
2.     The Association must hold at least one member meeting (called and held in accordance with the Association’s governing documents) to discuss the proposed amendment;
 
3.    At least half of the owners required under the existing Declaration must vote for the proposed amendment;

4.    A Petition must be prepared and filed with the court requesting that the court approve the amendment. The Petition is required to include:

      (A)     A summary of the procedures and requirements for amending the Declaration that are set forth in the Declaration;

      (B)      The proposed amendment to the Declaration, the effect of and reason for the proposed amendment, including a statement of the circumstances that make the amendment necessary or advisable;
 
      (C)      The results of any vote taken with respect to the proposed amendment;
 
      (D)      Any other matters that the association believes will be useful to the court in deciding whether to grant the Petition; and
 
     (E)       As exhibits, copies of:

                (i)     The Declaration, as originally recorded, and any recorded amendments to the Declaration;

               (ii)     The text of the proposed amendment;

              (iii)     Copies of any notices sent pursuant to the requirements of the statute;

              (iv)     Minutes from the owner meeting(s) held to discuss the proposed amendments; and
  
              (v)     Any other documents that the association believes will be useful to the court in deciding whether to grant the Petition;

5.    A hearing is scheduled on the Petition within 45 to 60 days after filing the Petition;
 
6.    A notice of the Petition and notice of the hearing must be sent to owners, first mortgagees, and the Declarant within ten (10) days after the hearing date is set; and
 
7.    The court is required to grant the Petition unless 33% of the owners, 33% of the lenders, the Declarant, FHA or VA objects to the amendment.

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Published by Orten & Hindman, P.C.
Copyright © 2002 Orten & Hindman, P.C.. All rights reserved.
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