Douglas County Court Approves 25% Rental Cap in Sawgrass Community

A court-approved amendment now restricts the share of townhomes that may be rented in the Sawgrass at Plum Creek community in southern Douglas County to 25 percent. The Douglas County District Court granted the change after reviewing a petition filed by the homeowners association under Colorado’s Common Interest Ownership Act on Jan. 5, 2026.

The HOA and other proponents argued the cap will protect long-term property values, preserve neighborhood stability and help control insurance costs. The amendment includes provisions that grandfather existing leases, and it provides for insurance-related and documented hardship exceptions for individual owners. The association also released a statement defending its outreach and its rationale for pursuing the amendment.

Not all residents agreed with the outcome. Neighbors and some owners criticized the cap as excessive and said it could effectively force owners who rely on rental income to sell. Some homeowners questioned the accuracy and counting of votes submitted as part of the petition process, raising concerns about transparency and procedural fairness in how the amendment was advanced to the court.

The legal pathway used by the HOA reflects a feature of Colorado law that allows common interest communities to seek court approval for governance changes when certain voting thresholds and procedural requirements are implicated. In this case the court exercised its review power and ratified the amendment after considering the association’s petition and the documented protections for current tenants.

The local implications extend beyond property lines. Limiting rental supply in a growing county can tighten access to lower-cost housing and concentrate the burden on prospective renters, including workers, young families and older residents who may prefer renting. Housing instability and displacement have documented links to poorer physical and mental health outcomes, disruptions in continuity of care and increased stress for affected households. Public health and social equity advocates note that policies shaping housing availability have direct effects on health equity and community resilience.

As the amendment takes effect, owners with existing leases will remain covered by grandfathering provisions, while future rental transactions will be subject to the cap and to any hardship or insurance exception processes. The ruling underscores tensions that arise when neighborhood preservation goals intersect with housing affordability and the financial realities of individual homeowners, and it highlights the role courts play when association governance and community interests collide.