§ 38-33.3-312 — Conveyance or encumbrance of common elements

Colorado § 38-33.3-312

• Jurisdiction: Colorado
• Title 38: Property -
• Art.: Colorado Common Interest Ownership Act

Text

(1) In a
condominium or planned community, portions of the common elements may be
conveyed or subjected to a security interest by the association if persons entitled to
cast at least sixty-seven percent of the votes in the association, including sixty-seven percent of the votes allocated to units not owned by a declarant, or any
larger percentage the declaration specifies, agree to that action; except that all
owners of units to which any limited common element is allocated must agree in
order to convey that limited common element or subject it to a security interest.
The declaration may specify a smaller percentage only if all of the units are
restricted exclusively to nonresidential uses. Proceeds of the sale are an asset of
the association.

(2) Part of a cooperative may be conveyed and all or part of a cooperative
may be subjected to a security interest by the association if persons entitled to cast
at least sixty-seven percent of the votes in the association, including sixty-seven
percent of the votes allocated to units not owned by a declarant, or any larger
percentage the declaration specifies, agree to that action; except that, if fewer
than all of the units or limited common elements are to be conveyed or subjected to
a security interest, then all unit owners of those units, or the units to which those
limited common elements are allocated, must agree in order to convey those units
or limited common elements or subject them to a security interest. The declaration
may specify a smaller percentage only if all of the units are restricted exclusively
to nonresidential uses. Proceeds of the sale are an asset of the association. Any
purported conveyance or other voluntary transfer of an entire cooperative, unless
made in compliance with section 38-33.3-218, is void.

(3) An agreement to convey, or subject to a security interest, common
elements in a condominium or planned community, or, in a cooperative, an
agreement to convey, or subject to a security interest, any part of a cooperative,
must be evidenced by the execution of an agreement, in the same manner as a
deed, by the association. The agreement must specify a date after which the
agreement will be void unless approved by the requisite percentage of owners. Any
grant, conveyance, or deed executed by the association must be recorded in every
county in which a portion of the common interest community is situated and is
effective only upon recordation.

(4) The association, on behalf of the unit owners, may contract to convey an
interest in a common interest community pursuant to subsection (1) of this section,
but the contract is not enforceable against the association until approved pursuant
to subsections (1) and (2) of this section and executed and ratified pursuant to
subsection (3) of this section. Thereafter, the association has all powers necessary
and appropriate to effect the conveyance or encumbrance, including the power to
execute deeds or other instruments.

(5) Unless in compliance with this section, any purported conveyance,
encumbrance, judicial sale, or other transfer of common elements or any other part
of a cooperative is void.

(6) A conveyance or encumbrance of common elements pursuant to this
section shall not deprive any unit of its rights of ingress and egress of the unit and
support of the unit.

(7) Unless the declaration otherwise provides, a conveyance or encumbrance
of common elements pursuant to this section does not affect the priority or validity
of preexisting encumbrances.

(8) In a cooperative, the association may acquire, hold, encumber, or convey
a proprietary lease without complying with this section.

Legislative History

Source: L. 91: Entire article added, p. 1747, � 1, effective July 1, 1992. L. 93: (1) and (5) amended, p. 652, � 18, effective April 30. L. 98: (1) to (3) amended, p. 484, � 17, effective July 1.