Colorado § 38-33.3-311 - Tort and contract liability.

§ 38-33.3-311. Tort and contract liability.

(1) Neither the association nor any unit owner except the declarant is liable for any cause of action based upon that declarant's acts or omissions in connection with any part of the common interest community which that declarant has the responsibility to maintain. Otherwise, any action alleging an act or omission by the association must be brought against the association and not against any unit owner. If the act or omission occurred during any period of declarant control and the association gives the declarant reasonable notice of and an opportunity to defend against the action, the declarant who then controlled the association is liable to the association or to any unit owner for all tort losses not covered by insurance suffered by the association or that unit owner and all costs that the association would not have incurred but for such act or omission. Whenever the declarant is liable to the association under this section, the declarant is also liable for all expenses of litigation, including reasonable attorney fees, incurred by the association. Any statute of limitation affecting the association's right of action under this section is tolled until the period of declarant control terminates. A unit owner is not precluded from maintaining an action contemplated by this section by being a unit owner or a member or officer of the association.

(2) The declarant is liable to the association for all funds of the association collected during the period of declarant control which were not properly expended.

Source: L. 91: Entire article added, p. 1746, § 1, effective July 1, 1992.

ANNOTATION

Subsection (1) does not establish the adequacy as a matter of law of the representation by a common interest community association of lot owners belonging to the association who were absent from the underlying action. Because conflicting interests exist between the association and the absent owners, representation was not adequate. When assessing prejudice, the court must consider whether the interests of an absent party are adequately represented by those already a party to the litigation. Clubhouse at Fairway Pines v. Fairway Pines Estates, 214 P.3d 451 (Colo. App. 2008).