Construction Defect Debate Continues

Even though the anticipated construction defect reform bill has not yet been introduced into the state legislature, the debate over the construction of multifamily housing units continues to take center stage. Late last year, the City of Lakewood adopted a local ordinance similar to the construction defect reform bill introduced into the state legislature last year. In a similar effort, the City of Lone Tree is considering amending its ordinances to adopt construction defect reforms. The City of Lone Tree’s ordinance will have the effect of:

• removing the right of an association to amend its declaration to remove arbitration provisions, thus precluding an association’s ability to access the courts to resolve these disputes;
• requiring extensive notice to the owners regarding the defect and impact on property values;
• requiring a majority of all owners’ approval prior to investigating and pursuing any alleged construction defects; and
• providing the builder a right to implement a repair of the claimed defect.

As development in transit oriented corridors continues to be a priority for most municipal entities, they will continue to search for a way to balance the needs of builders and the rights of homeowners to seek redress for improperly constructed units. The Lone Tree Ordinance seems to tip the balance too much in favor of the Builders, at the expense of the owners.

David A. Firmin, Esq.

4 responses to “Construction Defect Debate Continues”

Joe Felice says:

February 6, 2015 at 2:39 am

And I’ll bet construction of condominiums in those cities does not increase noticeably due to this legislation. If condos are built, they will be upper-end, “luxury” condos, just like all the apartments that we see being built around the metro area. All of this does little to help people who earn less-than-$100,000 a year. This construction-defect issue is just a ruse. All developers have to do is build good products, and they would be free from any lawsuits. But they want to cut corners in the interest of profit, and then, when they are found out, try to blame the litigious owners. Oh my, what a society we have created! But then, we all know the victim is responsible for the rape.
Doug Hufford says:

February 6, 2015 at 6:12 am

I fail to see how “The Lone Tree Ordinance seems to tip the balance too much in favor of the Builders, at the expense of the owners.” The four bullet points above seem to improve the homeowners ability to be knowledgable on what is going on in there association. It should be the majority of the homeowners who decide to enter into a lawsuit with a builder, not just the Board. Potentially spending hundreds of thousands of dollars and tying up the units from being able to sell because of a pending lawsuit is a decision that should be made by all. It gives the builder a chance to remedy the issues and if they don’t what in the ordinance prevents the HOA from suing. How is this tiping the balance in the builders favor?
Todd Spiller says:

February 6, 2015 at 2:20 pm

A means needs to be found to settle legitimate claims before litigation. As it stands, builders, in an effort to limit losses, quit repairs and owners file suit. At that point it is almost a foregone conclusion that the process will take many months or years and more funds will be spent on discovery, and attorneys than the repairs that are ultimately addressed. The discussion now seems to be on frivolous actions by disgruntled home owners and builders are playing the victim card.. In what percentage of disputes is this actually the background? In my limited experience litigation is only a last resort taken by volunteer boards who are left with no other course of action. The focus needs to be on a fair and timely claim process with insurers to minimize expenses and direct the effort and cost to repairs.
Gerald Smith says:

February 6, 2015 at 10:13 pm

Litigation is expensive. Because it’s the only way to address defects, construction companies are avoiding common-interest projects. It’s impossible to build with zero defects, but there should be a more cost-effective way to address those defects.

I don’t have a problem with the Lone Tree Ordinance, other than requiring a vote of the majority of all owners. In most HOAs, you couldn’t get a majority to vote on anything, even if it was a vote for Santa Claus a week before Christmas.

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4 responses to “Construction Defect Debate Continues”

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