Vallagio at Inverness Residential Condo. Assn. v. Metro. Homes, Inc.Annotate this Case
This case centered on whether the Colorado Common Interest Ownership Act (“CCIOA”) permitted a developer–declarant to retain a right of consent to certain proposed amendments to a common interest community’s declaration. Petitioner Vallagio at Inverness Residential Condominium Association, Inc. (the “Association”), sought damages for alleged construction defects in the Vallagio at Inverness residential development project (the “Project”), a community organized under CCIOA. The Project’s developer and declarant, respondent Metro Inverness, LLC (the “Declarant”), drafted and recorded the Project’s original declaration, which set forth specific dispute resolution procedures for construction defect claims. As pertinent here, certain provisions of the original declaration: (1) required that all construction defect claims be resolved through binding arbitration; and (2) provided that the provisions governing such claims “shall not ever be amended” without the Declarant’s written consent. Shortly before the Association filed the present action, and without obtaining the Declarant’s consent, the requisite number of the Project’s unit owners voted to amend the declaration to delete the foregoing dispute resolution provisions. The Declarant moved to compel arbitration, arguing that the attempted declaration amendment was ineffective absent its written consent and, thus, the Association was bound by the arbitration provision contained in the original declaration. The district court denied the Declarant’s motion, reasoning in pertinent part that the consent-to-amend provision violated and was therefore void under CCIOA. The Colorado Supreme Court concluded that the consent-to-amend provision contained in the Project’s original declaration was consistent with CCIOA and was therefore valid and enforceable. Furthermore, the Court concluded that because the unit owners did not obtain the Declarant’s consent to remove the arbitration provision, the attempted removal was ineffective, and the declaration’s arbitration agreement remained in force.