2023 Colorado Revised Statutes › Title 7 - CORPORATIONS AND ASSOCIATIONS (§§ 7-1-101 — 7-137-301) › CORPORATIONS (§§ 7-1-101 — 7-52-106) › NONPROFIT CORPORATIONS (§§ 7-20-101 — 7-30-119) › Article 30 - UNIFORM UNINCORPORATED NONPROFIT ASSOCIATION ACT (§§ 7-30-101 — 7-30-119) › Section 7-30-105 - Statement of authority as to real property

(1)
A nonprofit association is an entity for purposes of, and may execute and record a statement of authority pursuant to, section
38-30-172
, C.R.S.
(2)
In addition to the matters required or permitted to be contained therein pursuant to section
38-30-172
, C.R.S., a statement of authority executed and recorded on behalf of a nonprofit association shall state any limitation that may exist upon the authority of the person named in the statement of authority, or holding the position described in the statement of authority, to execute instruments encumbering, conveying, or otherwise affecting title to the real property on behalf of the nonprofit association.
L. 94: Entire article added, p. 1272, § 1, effective May 22. L. 2003: Entire section R&RE, p. 2202, § 2, effective 7/1/2004.
Colorado amended subsection (1) (numbered as subsection (a) in the uniform act) to require the execution and recording of the statement of authority, and, in subsection (2) (numbered as subsection (b) in the uniform act), required that the statement be recorded in the county in which the property is situated. Further, Colorado amended § 7-30-105 to specify that property may be encumbered in addition to being transferred, whereas the uniform act refers only to transferring. The official comment should be read with these changes in mind.
OFFICIAL COMMENT
1. This section is based on Revised Uniform Partnership Act (RUPA) Section 303. California Corporations Code, Title 3, Unincorporated Associations, Section 20002 (West 1991), is similar.
2. A statement of authority need not be filed to conclude an acquisition of or to hold real property. It is concerned only with the sale, lease, encumbrance, and other transfer of an estate or interest in real property. For this, it should, but need not, be filed. The filing provides important documentation.
3. Inasmuch as the statement relates to the authority of a person to act for the association in transferring real property, subsection (b) (numbered as subsection (2) in C.R.S.) requires that the statement be filed or recorded in the office where a transfer of the real property would be filed or recorded. This is usually the county in which the real estate is situated. This is where a title search concerning the real estate would be conducted. RUPA Section 303 provides for central filing, such as with the secretary of state, but its statement of partnership authority concerns authority of partners generally, not just with respect to real estate.
4. "Filed" and "recorded" are bracketed to direct an enacting state to choose. In most jurisdictions "recorded" will be the appropriate choice.
5. Subsection (c)(2) (numbered as subsection (3)(b) in C.R.S.) may present a problem for small, ad hoc, nonprofit associations. They may have no fixed office address. They may meet in the homes of their leaders. However, if they distribute literature or file petitions they are likely to have a mailing address.
6. Subsection (c)(3) (numbered as subsection (3)(c) in C.R.S.) permits the statement to identify as the person who can act for the association one who holds a particular office, such as president. This designation relieves the association from the need to make additional filings on each change of officers. Under local title standards and practices the transferee and filing or recording office are likely to require a certificate of incumbency if the statement designates the holder of an office.
7. Subsection (c)(4) (numbered as subsection (3)(d) in C.R.S.) requires the statement to document the authority of the person granted power to deal with the nonprofit association's real property and of the person authorized to execute the statement of authority.
8. Subsection (d) (numbered as subsection (4) in C.R.S.) is designed to reduce the risk of fraud and to reflect law and practice applicable to other organizations. It requires someone other than the person authorized to deal with the real property to execute the statement of authority on behalf of the nonprofit association.
9. Subsection (f) (numbered as subsection (6) in C.R.S.) makes a statement inoperative five years after its most recent recording or filing. This prevents a statement whose recording or filing is unknown by the association's current leadership from being effective. Reliance on a filing or recording this old is, in effect, not in good faith.
10. Subsection (g) (numbered as subsection (7) in C.R.S.) is based on RUPA Section 303(h). Its obvious purpose is to protect good faith purchasers for value without notice who rely on the statement, including those who acquire a security interest in the real property. There remains, of course, the risk that the statement itself was unauthorized.