The Colorado Common Interest Ownership Act (“CCIOA”) and the Colorado Revised Nonprofit Corporations Act (“Nonprofit”) are the two primary statutes governing common interest communities in Colorado. These statutes are long, complex, and contain provisions many people are not familiar with, and, frankly, may not care about.
However, it is fun to take a look at some of these little-known provisions and see how many of them surprise you. Take a look!
Nonprofit
- Articles of incorporation must contain all of the following information:
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- Domestic entity name
- Principal office
- Registered agent
- True name/address of incorporator
- Will there be voting members?
- Distribution of assets upon termination
- The articles of incorporation may contain the following information:
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- Purpose of nonprofit corporation
- Regulating affairs
- Powers of corporation
- Board members identity
- Meetings may be conducted by telecommunication if all participants can hear each other during the meeting. All such participants are deemed present at the meeting;
- Directors must be individuals; no other requirement to serve on the board exists except as required in the bylaws;
- Officers must be individuals over 18 years of age; no other requirements exist except as may be set forth in the bylaws.
- Unless otherwise provided in the bylaws, a quorum of the board is a majority of the number of directors in office immediately before the meeting begins;
- Unless otherwise set forth in the bylaws, director terms are one year;
- Unless otherwise specified in the bylaws, directors may be compensated;
- Boards may hold regular meetings outside of the state of Colorado;
- Boards may not amend the bylaws to change quorum requirements without owner approval regardless of what the bylaws themselves provide;
- The Nonprofit Act authorizes boards to create committees and appoint members of such committees, including the appointment of directors to the committees;
CCIOA
- CCIOA requirements may not be waived through agreement; for example, associations cannot forego CCIOA notice requirements for membership meetings even if all the owners agree to forego such requirements.
- Associations must provide education to owners, at no cost, at least annually as to the general operations of associations and rights and responsibilities of owners, associations, and the board—this requirement does not apply to timeshares;
- Communities with less than 10 or 20 units (depending on creation date), as well as communities that have a cap on their annual assessments (exclusive of optional user fees and insurance premiums) of $300 or $400 (depending on creation date) per unit per year may be exempt from CCIOA; check with the association’s legal counsel if you think your community may fit under any of these exceptions;
- Condominium communities are never exempt from CCIOA regardless of the community size or assessment restraints.
- Each unit owner must be an insured person under the association’s insurance policies with respect to liability arising out of the owner’s interest in common elements;
- Although CCIOA sets a cap on owner approval requirements for declaration amendments at 67% of all the votes, there are several exceptions to this ceiling, including but not limited to amendments associated with changes to unit boundaries and reallocation of limited common elements;
- A common interest community may be terminated only by agreement of owners to which at least 67% of votes in the community are allocated—or larger percentage specified in the declaration;
- CCIOA does not require associations to carry Directors and Officers Liability insurance coverage (even though such coverage is highly recommended);
- Any proposed vote to remove one or more directors from the board, must be set forth in the meeting notice/agenda and cannot be voted on as a motion from the floor.
- By amending its declaration, a pre-CCIOA community does not automatically become a post-CCIOA community. To accomplish this task the following actions must be taken:
- Board of directors adopts resolution recommending community be treated as a post-CCIOA association (or if requested by 1/20th of owners); and
- Written notice of a special meeting is sent to owners along with a copy of CCIOA and explanation as to reason for the meeting: and
- At least 67% of the votes present at the meeting (in person or by proxy) approve proposed resolution.
Should you have any questions concerning CCIOA or the Nonprofit Act, please do not hesitate to contact one of our attorneys at 303.432.9999 or at [email protected].