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Accetta v. Brooks Towers Residences Condominium Ass’n Inc.

2021 COA 87. No. 19CA2076.  Common Interest Communities—Colorado Common Interest Ownership Act—Amended Declaration.

July 1, 2021

In 1979, Magna Associates recorded a declaration and map submitting the high-rise Brooks Towers Condominiums to condominium ownership under the Condominium Ownership Act (COA). In 1995, before selling the units, the Magna Associates Liquidating Trust, acting as the declarant, executed and recorded an Amended and Restated Declaration referencing the Colorado Common Interest Ownership Act (CCIOA) and an amended map. The amended declaration stated that it superseded the 1979 declaration, changed the community’s name to Brooks Tower Residences, and designated the Brooks Tower Residences Condominium Association, Inc. (Association) to manage the building.

Plaintiffs purchased a Brooks Tower Residences unit in 2005. The special warranty deed that conveyed their unit states that the unit is subject to the 1995 declaration. Plaintiffs paid dues associated with their respective property ownership interest in the common elements. They filed this case in 2017 seeking a declaration that the 1995 declaration’s provisions for allocation of common expenses are invalid under the CCIOA and raised various common law claims. The trial court granted defendant’s motion for summary judgment, finding that plaintiffs were on notice that they were subject to the 1995 declaration, and the community wasn’t subject to the entirety of CCIOA or the specific CCIOA provisions at issue.

On appeal, plaintiffs contended that the trial court erred by concluding that Brooks Tower Residences isn’t governed by CCIOA. CCIOA automatically applies in its entirety to common interest communities created after CCIOA’s effective date of July 1, 1992. Pre-existing communities are automatically subject to certain CCIOA provisions. Associations for pre-existing communities may elect to be governed by CCIOA in its entirety; however, this may only be accomplished if certain association officers execute and record a statement of election setting forth the name of the common interest community and association, the fact that the association has elected to accept CCIOA’s provisions, and information concerning the association’s compliance with one of the two methods for electing into CCIOA. Here, Brooks Towers is a pre-existing community that falls outside the scope of much of CCIOA. Irrespective of the 1995 declaration’s repeated references to CCIOA, the community did not elect treatment under CCIOA as contemplated by CRS § 38-33.3-118. Further, the declaration shows no intent to incorporate the requirements of CRS § 38-33.3-205, or through it CRS § 38-33.3-207, which do not automatically apply to preexisting communities.

Plaintiffs also argued that the trial court erred by entering summary judgment in defendants’ favor on their remaining claims for breach of fiduciary duty, conversion, unjust enrichment, and negligence. Plaintiffs conceded that if their CCIOA declaratory judgment fails so does their unjust enrichment claim. Therefore, the Court of Appeals considered only the remaining common law claims, which are based on the imposition of excessive fees against plaintiffs’ unit and failure to disclose the relative amount of the fees as compared to other units. However, plaintiffs failed to articulate a legal basis for concluding that the fees were excessive or the Association was obligated to ignore the allocations in the 1995 declaration in assessing fees. Further, the recorded declaration sets out the allocations for each unit, so plaintiffs were on notice of the fee allocations. Accordingly, the trial court properly entered summary judgment.

The judgment was affirmed and the case was remanded to the trial court to determine the amount of defendants’ reasonable appellate attorney fees and award such fees to defendants as the prevailing party.

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

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