In 1987, the Town of Vail enacted an Ordinance zoning the Village Inn Plaza Development.
Under such Ordinance, the owners of the property within the Village Inn Plaza Development agreed to convey Unit 2 of the Village Inn Plaza Development to the Town of Vail with no use restrictions. Under §11(6) of the Ordinance, all new condominium units were to “remain in the short-term rental market to be used as temporary accommodations available to the general public."
Village Inn Plaza-Phase V Condominium Association (the "Association") recorded a Declaration with restrictions similar to those in the Ordinance. The Association later adopted Amended Policies, Rules, Regulations and Guidelines (the "Amended Rules") stating that it would not enforce §11(6) of the Ordinance.
On September 5, 2014, Staufer Commercial, LLC and Vail Village Inn, Inc. filed a First Amended Complaint, naming the Town as a defendant. The District Court then ordered that the Town add as cross-claim defendants all current owners of residential units in Village Inn Plaza- Phase V (the "Residential Owners"). The Town later filed an amended cross-claim (the "Cross-Claim"), seeking a declaration that the Amended Rules violated the Ordinance. The Association filed a motion for partial summary judgment on the Cross-Claim (the "SJ Motion"), arguing the Colorado Common Interest Ownership Act, C.R.S. § 38-33.3-101, et seq. ("CCIOA"), prohibits enforcement of the Ordinance. In response, the Town argued that the Ordinance predates CCIOA's effective date and that the Association presented no evidence of discrimination resulting from the Ordinance.
On June 5, 2018, the District Court granted the SJ Motion (the "Final Order"), holding that CCIOA applies and finding the Ordinance to be discriminatory. The Town filed a Motion to Reconsider, arguing the Court did not consider the legislative intent of C.R.S. § 38-33.3-106 and that CCIOA does not apply to the Ordinance, because the Town is a home rule municipality with exclusive authority over issues of local concern. The Court denied the Motion on October 11, 2018, leading to certification under C.R.C.P. 54(b) on December 10, 2018.
The Town of Vail filed a Notice of Appeal with the Colorado Court of Appeals on January 22, 2019 appealing the District Court's June 5, 2018 Order granting the Association's Summary Judgment Motion, and the District Court's October 11, 2018 Order denying the Town's Motion
to Reconsider the June 5, 2018 Order.
The Colorado Common Interest Ownership Act is based upon the Model Act. At issue in this matter is the application of Section 106 of the Act has on local control over how units may be used or what restrictions a local municipality may place on properties. This would include deed restrictions, by advancing this argument, clarity may be achieved with respect
to restrictions ranging from short term transient rental ordinances.
Brief Author: William H. Short, Esq.
CAI Amicus Review Panel: Mr. Robert Diamond, Esq., Mr. Gary Kessler, Esq., Mr. Tom Moriarity, Esq. (MA), Ms. Jennifer Loheac, Esq. (GA), Mr. Gary Daddario, Esq. (NH)