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What Is A “Common Interest Community" Under CCIOA?
The Colorado Common Interest Ownership Act (“CCIOA”) governs the formation, management and operation of most Colorado associations and common interest communities (“CIC’s”). CCIOA applies differently to CICs and their associations if the CIC existed prior to July 1, 1992, the effective date of CCIOA (“pre-CCIOA communities”) and those created after that date (“post-CCIOA communities.”)
CCIOA does not apply, in any respect, to the voluntary associations in communities that do not fall within the definition of a CIC. This distinction makes it important for associations and boards to understand whether or not their community is a “common interest community” as defined by CCIOA or Colorado case law.
CCIOA defines a CIC as including “[R]eal estate described in a declaration with respect to which a person, by virtue of such person’s ownership of a unit, is obligated to pay for real estate taxes, insurance premiums, maintenance, or improvement of other real estate described in a declaration.”
Unfortunately, this definition often leaves boards, owners, and others confused.
Does the community need to have common elements? What if the owners have formed an association and have voluntarily agreed to pay a certain sum of money to fund activities? What if the declaration (which is the recorded notice of the community’s covenants, conditions, and restrictions (“CC&Rs”)) doesn’t provide for mandatory assessments?
A more user-friendly way to approach this definition is to think in terms of mandatory v. voluntary. A community is a common interest community if it has a declaration and one of the following applies:
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the declaration provides for the payment of mandatory assessments by virtue of owning property described in the declaration; OR
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the declaration creates a mandatory membership in an association by virtue of owning property described in the declaration AND the bylaws of the association mandate payment of mandatory assessments; OR
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An implied obligation to pay assessments exists because of the ownership of common elements and the association’s obligation to maintain these common elements.
So, regardless of whether an association has common areas or common elements, if the payment of assessments is mandatory, CCIOA applies. If owners voluntarily pay assessments, the community does not fall within the definition of a CIC and CCIOA does not apply.
However, even if a community is not bound by CCIOA’s requirements, the community or the board of directors of a voluntary association may wish to consider following many provisions of CCIOA. All Colorado covenant controlled communities, regardless of whether or not the community is a CIC as defined by CCIOA and Colorado case law, can benefit from disclosing important association documents to owners and adopting policies and procedures that educate owners on how their association is governed, managed, and operated.
[PRINTER FRIENDLY VERSION]
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Lunch Forums For Managers
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February 2
Increasing Fiscal Viability:
Borrowing or Assessing?
12:00 - 1:30 PM
Arvada Office
5610 Ward Road
Suite 300
(1 mile north of I-70)
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Community Associations Institute
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The Community Associations Institute (CAI) is a nonprofit organization that provides education and resources to community associations. To find out more about CAI visit www.caionline.org
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