Almost all homeowner associations in Colorado are either condominium communities or planned developments, with nothing in between (aside from a very small number of co-ops). Many might find this hard to believe given all the different types of communities we have labels for, such as townhomes, single family, patio homes, zero-lot-line homes, and mixed-use communities. Nevertheless, all of these types of communities fall into one of the two categories: condominiums or planned developments.
The term “condominium” is defined by the Colorado Common Interest Ownership Act (“CCIOA”) as a community in which portions of the real estate are designated for separate ownership and remainder of which is designated for common ownership solely by the owners. In plain English, this means that common elements are owned by unit owners as tenants in common as opposed to being owned by associations.
CCIOA further provides, “A common interest community is not a condominium unless the undivided interests in the common elements are vested in the unit owners.” Thus, any community in which the unit owners do not collectively own the common elements does not constitute a “condominium” community.
CCIOA also defines the term “planned community” as a community that is not a condominium community or a cooperative. This, in short, means that communities in which the associations own common elements are considered planned developments.
Additionally, there are several other differences between condominiums and planned developments, which are outlined in the below chart: Click on the chart to view.
One might wonder why these differences are important and how they impact HOAs in general. The answer is this: oftentimes, maintenance and repair obligations are based on the designation of the pertinent components as common elements or portions of the units. For example, if a set of covenants is silent as to the maintenance obligations for siding in a community, the maintenance obligation would fall on the association if the siding is a common element and on the owner if the siding is part of a building that is owned by an individual owner. Thus, if the community is a condominium, the association would have the maintenance obligation for the siding; if the community is a planned development, the owner would have the obligation to maintain the siding.
Designation of the community also makes a big difference when it comes to enforcement. For instance, satellite dish rules and FCC regulations apply differently to condominium and planned developments. In a condominium community, the association may prohibit installation of dishes on the roofs because roofs are general common elements, while in planned developments (such as townhomes) associations cannot ban installation of dishes on roofs because the roofs are part of the buildings that are individually owned by the owners in the community.
If you are in doubt about whether your particular association is a condominium or planned development, the best thing to do is consult with the association’s legal representative.