This checklist reviews the elements needed to terminate a Colorado Common Interest Community that is subject to Colorado Common Interest Ownership Act (CCIOA) – a so-called post-CCIOA community.
If the community is a pre-CCIOA community (formed before July 1, 1992) or is not subject to CCIOA as a post-CCIOA exempt community, the terms of the declaration will control. The provisions of the Colorado Common Interest Ownership Act and the checklist below may be helpful.
Checklist for termination in post-CCIOA communities that are not exempt from the Colorado Common Interest Ownership Act :
- At least 67% (or more) of all allocated votes in the Association must affirmatively agree to terminate the Colorado common interest community in a Termination Agreement. The declaration may have a percentage requirement higher than 67%.
- A notice of intention to terminate must be provided to local government if the community proposed to be terminated is a planned community. A notice of intention to terminate is not required if the community proposed to be terminated is a condominium community
- The Termination Agreement is in the nature of a declaration amendment (the Termination Agreement will terminate the declaration) and must include the following:
- A “void by” date for recording of the Termination Agreement.
- A certification that the Association has obtained the required amount of agreement from Owners (not votes, but consents or approvals) to terminate.
- Provisions establishing the Association as trustee of all remaining debts and expenses until Association affairs are properly wound up.
- The Termination Agreement may require that any or all common elements be sold following the termination, or distributed to the owners or resolved as otherwise set forth in the Termination Agreement.
- If there are common areas to be sold, the Association must remain in existence as a corporation (without dissolving under corporate law) until after the sale of those common areas, as outlined in the Termination Agreement.
- If there are common areas and the common areas are not to be sold, then i) each owner in the Association at the time of termination becomes a tenant in common or co-owner of the common areas, or ii) ownership is resolved as otherwise set forth in the Termination Agreement.
- If common areas are sold, the Agreement must set forth the distribution of proceeds from sale/conveyance to Owners and lienholders. The value of common areas to be sold must be determined by an independent appraiser.
- The Termination Agreement must be recorded as though it were a deed/declaration amendment. If the Association is located in more than county, it must be recorded in each and every county in which it is located.
For legal assistance in terminating a community, contact an attorney at our office.
Disclaimer
This article has been prepared by the HOA law firm of Orten Cavanagh & Holmes, LLC (the “Firm”) for general informational and educational purposes only. This article does not and is not intended to, constitute legal advice for any specific matter. The information in this article is not privileged and does not create an attorney-client relationship with the Firm or any of the Firm’s attorneys. This article is not an offer to represent any HOA or any other person. You should not act, or refrain from acting, based upon any information in this article. The hiring of an attorney is an important decision that should not be based solely on written information about qualifications or experiences. Anyone considering hiring an attorney should independently investigate the attorney’s credentials and ability and not rely upon advertisements or self-proclaimed expertise. To contact an attorney at the HOA law firm of Orten Cavanagh & Holmes, LLC visit us at our website and call or email one of our attorneys, contact us at info@ochhoalaw.com or call us at (720) 221-9780 or (719) 457-8420 or (888) 841-5149.
