Real Estate Section Responds to Court of Appeals Decision
On July 13, 2006, the Colorado Court of Appeals decided Snowmass Land Company v. Two Creeks Homeowners Association, Inc., (2006 WL 1914076), cert. denied. In Snowmass, a developer created a common interest community under CCIOA, and reserved certain development rights, (including the right to withdraw property from the community), in the recorded declaration of the association. The association later asserted that the developer did not properly reserve the right to withdraw the property. The trial court ruled in favor of the association. In confirming the trial court's decision, the Court of Appeals held that the community did not have a map (as defined in CCIOA) containing the information required by § 209 of CCIOA for the developer to properly reserve the right to withdraw the property. Many practitioners feel that the Snowmass decision creates potential problems for developers, buyers and lenders, in that the decision fails to distinguish between plats and maps under CCIOA, and rejects the reasoning that a plat or a map is a part of the declaration for a community. The decision further holds that there is not equivalent effect for terms or disclosures made in either the declaration, plat or map. The Real Estate Section Council of the Colorado Bar Association has drafted proposed legislation to amend § 209 of CCIOA, (i) to clarify the distinction between plats and maps, (ii) to create equivalency among the plat, map and declaration, (i.e. if any material required by § 209 is contained in any one of the plat, map or declaration, the requirements of § 209 are satisfied), and (iii) to make the changes retroactive to July 1, 1998, the effective date of the 1998 amendments to CCIOA, (i.e. if material required by § 209 was previously included in a declaration recorded after July 1, 1998, but was not contained in a map, the requirements of § 209 would be satisfied). The legislation will likely be introduced in the 2007 session.