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802 East Cooper v. Z-GKids.

2023 COA 48. No. 22CA0700. Common Interest Communities—Land Use Code—Floor Area Ratio—Condominium Declaration.

June 1, 2023

Original Street Condominiums Inc. (OSC) is a condominium association with four condominium units in Aspen that are the subject of this action. Z-GKids, LLC (Z-G); Mona Hayles Long, as Trustee of the Mona Hayles Long Trust (Long Trust); Kimberly A. Raymond; and Rickey and Cynthia Wark (the Warks) (collectively, defendants) are the current owners of the four condominium units. 802 East Cooper is the former owner of unit 1 and sold its condominium interest to the Warks, purporting to reserve to itself ownership of the development rights in unused floor space attributable to unit 1. 802 East Cooper also required the Warks to obtain 802 East Cooper’s written approval before agreeing to modification of the condominiums’ common elements. 802 East Cooper later learned that Z-G intended to use part of the OSC’s unallocated floor space to expand its unit. 802 East Cooper had not approved or received notice of any development, so it sued defendants to quiet title and for declaratory judgment, conversion, injunctive relief, civil theft, unjust enrichment, and breach of contract. The district court granted defendants’ motion to dismiss.

On appeal, 802 East Cooper argued that the district court erred by dismissing its complaint because it erroneously interpreted the City of Aspen’s Land Use Code (LUC) and the OSC’s condominium declaration’s silence regarding floor area ratio (FAR) to mean that FAR must be treated as a common element, even though FAR does not satisfy any of the declaration’s definitions of a common element. The LUC limits the amount of floor area that can be developed for buildings on residential lots within the city according to the FAR formula. However, the declaration was created before creation of the FAR concept in the LUC. The court of appeals concluded that where the applicable land use code is silent, but the condominium association’s declaration links property rights to condominium unit ownership, an entity that has sold its condominium unit cannot retain a reserved right in the development of unallocated floor space. Here, the declaration’s plain language expressly forbids separating an interest in an undeveloped, common element from the actual condominium itself. Unallocated FAR is a right belonging to all condominiums as a common element. Therefore, the declaration precluded 802 East Cooper from retaining any rights to unallocated FAR after it sold unit 1, and the district court properly dismissed the complaint.

802 East Cooper also argued that the district court erred by dismissing its complaint by adding a new term to the declaration in treating FAR as a common element inseverable from individual unit ownership. However, as stated above, the declaration’s plain language expressly forbids separating an interest in an undeveloped, common element such as FAR rights from the actual condominium itself.

802 East Cooper further contended that the district court erred in dismissing its complaint by not recognizing the prior conduct of condominium owners who used unallocated FAR apart from common ownership and for their own expansion projects. However, the parties’ prior conduct did not relate to the issue in this case, and such conduct may not be considered where, as here, the language in the document is unambiguous.

The division rejected defendants’ appellate attorney fees request because they failed to explain the legal and factual basis for their request.

The judgment was affirmed.

Official Colorado Court of Appeals proceedings can be found at the Colorado Court of Appeals website.

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