Judge says it’s clear that ADUs are meant to be rented to long-term locals

Plaintiffs disagree and consider appeal

by Mark Reaman

A May 3 district court ruling makes it pretty clear that the judge presiding in the case brought by two Crested Butte property owners against the town of Crested Butte believes they must abide by the most recently enacted portions of the town code dealing with regulation of Accessory Dwelling Units (ADUs).

That would appear to be a major blow to the property owners’ primary contention that they are not legally bound to follow ADU regulatory amendments to the town code made after they purchased their property.

Gunnison District Court judge Steve Patrick stated in a ruling on the plaintiff’s motion for partial summary judgment that the 2015 amended definition of “rental, long-term” applies in the situation of Christopher Mize and John Kiltz of Sopris 715 LLC. Patrick’s ruling makes it clear that he believes case law allows deed restrictions to be amended and the “Crested Butte Municipal Code, like any other municipal code, is not a static document…”

Patrick’s ruling states that while the Colorado Constitution generally prohibits retroactive legislation, the 2015 amendment in this case was meant to clarify the law and the law itself remained unchanged.

The May 3 ruling reads that the original 1990 deed restriction “was to facilitate the availability of rental housing for local residents.” Patrick points out that the town has amended the code three times since the original ordinance in an effort to clarify the definition of “rental, long-term.”

“When viewed in light of the legislative history and the progression of the definition over time, the 2015 amended definition was a further clarification of the Town Council’s original intent and not a substantive change to the law defining “rental, long-term,” the decision states.

The two property owners had hired attorney Marcus Lock and filed a lawsuit last December against the town, town manager Dara MacDonald and the Town Council, essentially arguing that the property owners were not subject to the latest town regulations governing ADUs.

The suit also stated that when the property owners appealed a staff decision ordering them to follow current regulations, the appeals process was flawed.

The deed-restricted ADUs in question were built in the 1990s and the portion of the town code governing the restrictions have been amended, most recently in 2015. The plaintiff’s complaint states that both homeowners are following the original portion of the town code that calls for a long-term rental unit to be “maintained” on the property. Attorney Lock said in his complaint to the court that both property owners are doing that.

But neither Kiltz nor Mize are actively renting their ADUs to “any natural person who resides in Gunnison County as that person’s primary residence for a term of not less than six months…” as mandated by the 2015 amendment to the town code.

The 2015 amendment also states that if a deed-restricted ADU is vacant for more than three months, it is out of compliance.

Patrick’s May 3 decision also stated that the amended definition in question did not deprive the property owners of a vested property right. “They purchased properties, which were subject to deed restrictions limiting the use of their accessory dwellings to long-term rentals as defined by the Crested Butte Municipal Code. Application of the 2015 amended Ordinance does not change that fact,” Patrick wrote. “Therefore, enforcement of the 2015 amended definition against the plaintiffs does not impair a vested right and thus does not constitute unconstitutional retroactive legislation.”

“The 2015 amended definition of ‘rental, long-term’ controls in this case,” Patrick wrote in his conclusion.

Attorney Lock said he and his clients do not agree with the judge’s conclusion. “We obviously disagree with the decision,” he stated in an email to the News. “We believe it contains reversible errors of law and intend to appeal it if necessary.”

The town, on the other hand, is pleased with Patrick’s direction. “The town is very gratified that the legal attack on its long-term rental ordinance has been rejected,” said town attorney John Belkin. ”The town will continue to work to provide the much-needed rental housing that it bargained for when it allowed owners to avoid certain zoning requirements and a portion of their tap fees.”

The next court conference on this case is scheduled for May 24.