Colorado Court Ruling Highlights Importance of HOA Governing Documents
A recent Colorado Court of Appeals decision is highlighting how the governing documents of condominium and homeowners associations can affect disputes over property maintenance and repair costs.
In Beaver Plaza Condominium Owners’ Association v. Ballou, decided May 28, 2026, the court considered a dispute over responsibility for a major drainage repair project at a condominium complex in Frisco. The project was expected to cost more than $250,000.
Rather than establishing a new statewide procedure for HOA disputes, the court focused on how the community’s declaration classified the property and allocated repair expenses.
What the Court Considered
Beaver Plaza’s declaration distinguished between common elements and limited common elements. The association argued that the drainage system was part of a common element and that all unit owners should share the repair costs.
The owners of several commercial units disagreed. They argued that the drainage system was associated with a deck used exclusively by the residential units and that the related expenses should therefore be charged only to those owners.
The district court initially agreed with the commercial owners and granted partial summary judgment in their favor.
The Court of Appeals reversed that decision, finding that the declaration was ambiguous because both sides had reasonable interpretations of how the drainage system should be classified. The court concluded that the issue could not be resolved through summary judgment and sent the case back to the district court for further proceedings.
Why This Matters to HOA Communities
The decision illustrates how important an association’s declaration, bylaws and other governing documents can be when disputes arise.
Questions about maintenance, repairs and assessments may depend on whether a particular feature is considered a common element or a limited common element. That classification can determine which owners are responsible for associated costs.
For homeowners, understanding the documents governing their community can provide important context when an assessment or repair obligation is disputed.
Colorado Encourages Alternative Dispute Resolution
Colorado law separately encourages common-interest communities to use alternative dispute-resolution procedures, including mediation or arbitration, when appropriate.
Under the Colorado Common Interest Ownership Act, associations are encouraged to adopt protocols using mediation or arbitration as alternatives to—or, where applicable, prerequisites to—court proceedings. Governing documents may also specify situations in which disputes must be resolved through binding arbitration.
However, these provisions should not be confused with a new 2026 Court of Appeals requirement that every HOA must complete mediation or internal procedures before filing a lawsuit.
The applicable process can depend on the association’s governing documents and the nature of the dispute.
What Homeowners and HOAs Should Consider
Homeowners involved in an assessment or maintenance dispute should review the association’s declaration, bylaws, rules and applicable state law before assuming who is responsible for a particular expense.
HOAs, meanwhile, should make sure assessments and repair decisions are consistent with their governing documents and applicable statutory requirements.
When the language of governing documents is unclear, a dispute may ultimately require additional factual findings or judicial interpretation, as demonstrated by the Beaver Plaza case.
Practical Takeaway
The recent Colorado ruling does not establish a new statewide requirement for HOAs to complete an internal dispute process before going to court. Instead, it demonstrates how disputes over common elements, limited common elements and assessment responsibilities can turn on the wording of an association’s governing documents.
Homeowners and HOA boards dealing with significant assessments or property disputes should carefully review those documents and any applicable dispute-resolution procedures before taking further action. For complex disputes, obtaining advice from a Colorado attorney familiar with community-association law may also be appropriate.