Limitations on the Ability to Withdraw and De-Annex Property from a Common Interest Community

On February 28, 2013, the Colorado Court of Appeals issued its opinion with regard to the ability of an owner (and in this case, a real estate investment owner) to withdraw and de-annex lots from a common interest community.  Specifically, in Vista Ridge Homeowners Ass’n., Inc. v. Arcadia Holdings at Vista Ridge, LLC, 300 P.3d 1004 (Colo. App. 2013), the Court denied Arcadia’s appeal of a lower Colorado District Court ruling which invalidated Arcadia’s attempt to withdraw and de-annex 70 single-family lots which it owned from the 94-lot Vista Ridge Filing No. 9.

The applicable Declaration reserved the right to withdraw or de-annex any portion of the community in accordance with the Colorado Common Interest Ownership Act (CCIOA), and further limited such right to the extent that “no portion of the Property may be withdrawn or de-annexed after a Lot or Unit in that portion of the Property has been conveyed to an Owner other than a Declarant or a Builder.”

The decision ultimately turned on the meaning of a “portion” of the property, as intended by CCIOA, and as applied to the specific language in the Vista Ridge Declaration.  Subsection 210(4) of CCIOA governs when a declaration subjects “all or a portion of the real estate” to a right of withdrawal, and imposes parallel restrictions depending on whether the real estate is divided into portions:

(a)    If all the real estate is subject to withdrawal, and the declaration does not describe separate portions of real estate subject to that right, none of the real estate may be withdrawn after a unit has been conveyed to a purchaser; and

(b)   If any portion of the real estate is subject to withdrawal, it may not be withdrawn after a unit in that portion has been conveyed to a purchaser.

C.R.S. §28-33.3-210(4) (emphasis added).  Whereas the applicable Declaration described the lots as “Lot 1 through 94, Vista Ridge Filing No. 9,” the Court found this sufficient description of a separate portion of the Vista Ridge development, and therefore subject to Subsection 210(4)(b). In so finding, the Court concluded that CCIOA prohibited Arcadia from de-annexing the 70 lots that it still owned from the Filing No. 9 plat.

For additional information regarding Colorado construction litigation, please contact David M. McLain at (303) 987-9813 or by e-mail at    


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