Colorado Homes, Ltd. v. Loerch-Wilson
Colorado Homes, Ltd. v. Loerch-Wilson, 43 P.3d 718 (Colo. App. 2001)
An HOA board's covenant-enforcement decisions are evaluated under the business judgment rule rather than a strict-liability standard. Because the enforcement of restrictive covenants requires the exercise of discretion as to timing and manner, courts afford the board considerable latitude — board action must be made in good faith and may not be arbitrary, but a court will not substitute its judgment for the board's where the board has acted within the scope of its discretion.
Establishes the business-judgment standard for Colorado HOA covenant-enforcement decisions. Frequently cited together with Rhue v. Cheyenne Homes (good-faith standard for architectural-review denials) as the two cornerstones of Colorado HOA board deference doctrine. Practical effect: a board's selective or inconsistent enforcement may be challenged, but a board's reasoned, documented enforcement decision is shielded by the business-judgment rule.