The Lake Chalet Owners Association, Inc. v. Amber Homes, Inc. (Colorado)

The Lake Chalet Owners Association, Inc. v. Amber Homes, Inc. (Colorado)

The Lake Chalet Owners Association is a townhome community of 108 units located in Denver, Colorado. The Association is suffering from serious construction defects which the Association has attempted to address by filing a lawsuit against its developer/declarant, Amber Homes. Accordingly, in late 2009 and early 2010, the Lake Chalet owner-members amended the Declaration to remove the impediments which the declarant had placed there to prevent or impede the owner-members from suing them for construction defects.

The issue on this appeal is nearly identical to the issue presented in the Triple Crown at Observatory Village Association case for which CAI provided an amicus brief earlier this year. Based on the Triple Crown decision, the Lake Chalet Owners Association had their case dismissed. Lake Chalet appealed this decision with the Colorado Court of Appeals, but was unsuccessful on the central issue.

This case is primarily of importance in Colorado, however there are implications that could extend nationwide for any state that has adopted UCIOA. Section 2-117 of UCIOA states that a declaration may be amended “only by vote or agreement of unit owners of units to which at least 67% of the votes in the association are allocated, or any larger majority the declaration specifies.” This provision allows a declarant to insert self-serving language into a declaration, such as arbitration provisions, and require a 100% vote of unit owners to amend the provision. This type of declarant control defeats the policy of association self-governance.

Brief: CAI's Amicus Brief 
Prior Ruling: District Court Decision
Status: Pending
CAI Amicus Brief Author: Jesse Witt, Esq.
CAI Amicus Brief Review Committee: Stephen Marcus, Esq; Laurie Poole, Esq; Henry Goodman, Esq; Steven Sugarman, Esq.