shutterstock_214532707In Colorado, amendments to HOA Declarations have been under attack, particularly amendments seeking to eliminate provisions requiring unanimous votes before a change can be made. In recent years, plaintiff law firms who represent homeowner associations have recommended changing these type of provisions to make it easier to bring construction defect lawsuits. In 2012, a Colorado Condominium Association attempted to amend its Declarations (“2012 Amendment”) by, among other ways, eliminating the provision requiring a unanimous vote to change owner interests in the general common elements attached to each unit. An owner of one of the condominium units argued this 2012 Amendment could only be adopted by unanimous consent of the members pursuant to the plain language of the Declaration. The Association argued only 67% approval was required to amend the Declaration and anything further violated Colorado law. The Association argued that existing Colorado law capped the voting requirement at 67%.

Initially, a district court agreed with the Association. However, last week the Court of Appeals concluded the Declarations’ “unanimous” vote requirement to change owner interests in the general common elements attached to each unit did not violate Colorado law because an exception to the 67% cap existed. Although extremely limited, the exception allows Declaration provisions requiring unanimous member consent when amendments seek to change owner interests in general common elements or changes to provisions governing the sharing of common expenses. Although the 2012 Amendment itself did not seek to change the owner interests in the general common elements, the court reasoned that if the 2012 Amendment were permitted to go into effect, 67% of the members would be free to adopt a second set of amendments reallocating the general common element percentage interests by simply amending the percentages to the Declaration or authorizing a redevelopment adding or subtracting the number of units and modifying the general common elements percentage interests accordingly. Such a two-step process would conflict with the express language of the Declaration and Colorado law and should not be permitted. Therefore, if carefully drafted, under limited circumstances, unanimous vote provisions in Declarations remain enforceable in Colorado and should prevent unwanted actions by less than a majority of the association’s members.