Residents of Keystone are suing a homeowners association controlled by Vail Resorts over the organization of residential and commercial properties at the base of the Summit County ski area.
The residents — calling themselves Dissolve KNC — argue that the Keystone Neighbourhood Co. — or KNC, a nonprofit condo association formed by Intrawest in 1995 and then transferred to Vail Resorts to fund projects and development around the ski area — unfairly favors the resort operator. The lawsuit filed in Summit County District Court argues that a small parcel of undeveloped land owned by Vail Resorts in the middle of the 1,100-owner Keystone Neighbourhood Co. community gives the company total control over the community. (They do spell the “neighbourhood” the British way, too.)
The lawsuit is the culmination of long-simmering angst of property owners whose taxes to the resort-controlled neighborhood company largely fund the improvements and maintenance in the community. That angst has boiled over with the creation of the Town of Keystone in early 2024, which also collects tax revenue to fund services.
“We pay quite a bit in property taxes to Summit County and another half of that goes to the Keystone Neighbourhood Company. Shouldn’t the Town of Keystone be getting some of this revenue and providing services instead of Vail Resorts?” said Maureen Barrett, an Evergreen resident who two years ago bought a condo in Keystone in a deal that included a $23,000 one-time transfer fee and $2,000 a year to KNC. “The formation of the town has really exacerbated this feeling that we are paying in and not really getting anything out.”
Barrett has been the main organizer of the Dissolve-KNC.org group. Since her purchase a couple years ago, she has worked to rally other owners in a push to reform the master homeowners association that is not an uncommon tool for communities that are just getting started. The master structure allows a developer to fund critical infrastructure as a community takes shape. But as the community matures and, say, becomes a formal home-rule municipality, that master homeowner association structure becomes less vital to community development, Barrett said.
“Sure everyone hates HOAs, but this is different,” she said. “When you look at other HOAs, you see that votes are tied to what you own but not this one. This HOA is unique because votes are not tied to what individual property owners own.”
Homeowners get one vote in the KNC bylaws. Business owners get one vote for every 1,000 square feet of commercial space. And the so-called resort parcel — which is valued at $40,000 and ill-suited for any development considering it is mostly a beaver pond — gives its owner, Vail Resorts, 1,000 votes. Any changes to bylaws and amendments governing the KNC condo association require 67% of the possible 2,739 votes in the community.
So Vail Resorts’ ownership of that parcel gives it “absolute veto power over any change to the KNC,” reads the lawsuit. “The resort parcel was specifically created to allow the declarant, Vail Resorts, to maintain control of the KNC. The voting structure of the KNC was specifically created to discriminate in favor of the declarant.”
The residents are asking a Summit County judge to dissolve or reform the Keystone Neighbourhood Co. Their argument is that since homeowners contribute nearly three-quarters of the association’s revenue from ownership of 72% of the community’s parcels, it is time to reorganize the homeowners association. The primary tasks of the KNC includes maintaining roads, clearing snow, tourism marketing and hosting events.
A Vail Resorts spokesman declined to comment, noting the publicly traded company’s policy of not talking about ongoing litigation. Vail Resorts is not technically the owner of the KNC — it is owned by its members — and the resort operator has controlling interest in the homeowners association with that resort parcel.
The KNC has nine directors, eight of whom are elected by owners within the association. It is called a “master homeowner association” because it oversees the ski area’s River Run Village and eight other neighborhoods, condo complexes and lodges. The association collects about $2.7 million of its $6.1 million annual budget from property taxes and another $1.6 million comes from real estate transfer fees.
The association’s 2025 budget shows it spending $5.5 million, including $1.1 million on events, $2.2 million on neighborhood operations.
The Town Keystone incorporated in 2024 as the state’s newest home-rule municipality. The town collects a 2% lodging tax on short-term rentals, which is estimated to generate $1.6 million in 2025. The town also collects $3.4 million in sales tax.
Keystone sales tax revenues dropped last winter compared with the previous season, with January through April net taxable sales reaching $78.9 million, compared with $86.1 million in the same four months of 2024.
In an online FAQ for homeowners, the KNC said its role did not change when the Town of Keystone incorporated in February 2024. The KNC is ready to cede additional responsibilities to the town as the new municipality grows.
“The KNC welcomes ongoing discussions with the Town of Keystone on these issues, particularly when they may lead to a reduction in expenses for the KNC,” reads the online statement.
Ken Riley, the mayor of Keystone, said the homeowner issues with the KNC “is nothing new” and precedes the formation of the town.
“The town does not have any legal authority to intervene” in the lawsuit and there has not been any discussion by the town council to try to insert itself into the case, Riley said. “This is a covenant issue involving every owner’s deeds.”