Colorado HOA rental restrictions

The 67% threshold is the heart of it. To add or tighten a rental restriction, the association has to amend the declaration with the approval of owners holding at least 67% of the votes. A simple board vote, or a rule change, does not meet the bar. So if a packet shows a rental cap that was adopted by the board rather than by a declaration amendment, that restriction is on shaky ground.

Timing matters too. Colorado case law generally protects an owner who bought before a new rental ban was adopted, so the ban often does not reach them. But this grandfathering is a court-made limit on retroactive covenants, not a line in the statute, so it is fact-specific. The clean case is simple: a rental restriction already recorded in the declaration when you buy applies to you.

If you plan to rent the home out, read these before you offer:

• Whether any rental restriction is in the recorded declaration or only in board rules.
• When any rental restriction was adopted, relative to when the seller bought.
• Whether a declaration amendment restricting rentals actually got 67% approval.
• Board minutes for any pending push to add or tighten rental rules.

If your plan depends on renting, the difference between a declaration restriction and a board rule decides whether it binds you, and the 67% threshold makes new restrictions hard to pass. Knowing what is actually recorded, and when, is the whole question.

An HOA Notes brief checks the declaration and the rules for any rental restriction, looks at how and when it was adopted, and cites the page behind each finding so you know what you can do with the home.

Colorado Revised Statutes section 38-33.3-217(4.5) (Rental restriction amendment -- owner vote and grandfathering). An amendment to the declaration that prohibits or restricts the rental of units requires approval by at least 67% of ALL unit owners (not merely those voting at a meeting); separately, Colorado courts limit the retroactive application of a newly adopted rental ban, so as a general matter such a restriction does not bind an owner who acquired title before it was adopted (this grandfathering comes from case law on retroactive covenants, not from section 38-33.3-217(4.5) itself). After obtaining the required 67% approval, the association may enforce rental restrictions against all owners who acquire title after recordation; rental restrictions already in the declaration at the time of a unit purchase are fully enforceable against that purchaser from day one.

When you read the disclosure packet, watch for board-adopted rules (not declaration amendments) purporting to prohibit or limit all rentals, rental restrictions added by a simple majority board vote and applied to current owners, and rental restrictions retroactively applied to owners who purchased before the amendment. HOA Notes flags each of these against the statute and tells you which restrictions are actually enforceable.