Equal. Protection. Read again: Equal. Protection.  Those are important words in America.  Those two words succinctly state the core purposes of a democratic government.  Each citizen should stand on an equal footing with all other citizens.  The basic function of government is to ensure equality under the law. Government must protect a citizen’s rights in the legal system, and must not interfere or discriminate. Discrimination is the opposite of equality.  Rejection is the opposite of protection.

Senate Bill 15-177 is an absolute travesty of equal protection under the laws.  This proposed legislation will completely deprive condominium purchasers of the right of access to a court of law when a developer builds a defective condominium.  This bill interferes with equal access to justice and discriminates against condominium owners.  You should be outraged and share your outrage with your legislator.

This piece of legislation, if passed, will permanently deprive condominium owners of the right to go to a court of law to obtain compensation for a poorly built condominium.  This legislation would create a less favored class of citizens for purposes of access to justice.  Condominium owners would be forever required to use only arbitration, whereas all other property owners are able to go to court if their poorly built property is not repaired under a warranty claim.

As proposed, here is how it works. Because developers and builders have had to previously pay claims for defective construction, they now insert dispute resolution provisions which favor the developers into the covenants for a new project.  The developer prepares those covenants before anyone has built or bought any homes.  When condominium owners assume control of the community and become aware of these unfavorable provisions, they may vote as condominium owners in this democracy of ours to change those covenants for another dispute resolution process of their choosing.  SB 15-177 provides that even after all the owners purchase their condominiums and discover that they are defective, they will never have the opportunity to amend their covenants to go to court to claim fair compensation.

The bill creates a legislatively-imposed requirement that construction defect claims be submitted to arbitration instead of court and surprisingly claims that “represents a commitment on the part of the unit owners and the association” on which the developers are entitled to rely.  This statement glosses over the fact that when the covenants are written and filed, there are no unit owners and there is no association.  How can a unit owner, who hasn’t yet purchased a condominium, commit to limited access to justice?

The reason for all of the publicity concerning construction defect settlements is not because of construction defect litigation; it is because of defectively constructed condominiums.  The developers and their insurance companies are not paying settlements because of litigation; they are paying settlements because reliable engineers and other experts have concluded that the condominiums were poorly built and not in compliance with existing codes.  The developers and builders need to prevent the construction defect problems on the front end, and not avoid liability through an onerous dispute resolution process on the back end.  There would be no construction defect settlements if the units were properly built.  The single largest investment for most citizens is their home.  Their life-savings should not be jeopardized because the developers and builders are able to minimize liability by forcing the owners to arbitrate. The developers and builders have the right to go to court.  Why should the condominium purchasers be forced into a construction-friendly arbitration process?

The bill goes even further in its discrimination against condominium owners.  Every other person has a right to hire and pay experts or consultants to investigate whether the problems in a building are caused by defective construction.  Such a preliminary investigation is the prudent and responsible first step before claiming that construction defects exist.  But Senate Bill 15-177 will prevent a homeowners association from hiring experts and consultants to conduct such an investigation until 60 days after a very detailed notice to the owners.  That notice requires the association to describe the costs of litigation, the impact on market values and marketability, and describe how the association intends to pay for a lawsuit.  In other words, the construction industry is requiring homeowners associations to send out a letter which they worded to scare and deter homeowners from pursuing construction defect litigation, while at the same time depriving the homeowners association of the very ability to investigate whether there are defects in the first place.

Every condominium community in Colorado has a right to amend their declaration of covenants.  Those covenants are akin to a constitution, and the property owners can change their constitution if they want. But Senate Bill 15-177 states that the provisions inserted by the developer and the builder which protect them are in everybody’s best interest, and that the owners don’t even get the right to change their constitution.  Is that equal protection under the law, or is that discriminatory rejection of condominium owners?  This pushes the pendulum too far in the opposite direction.

Right now, the only incentive or deterrent to prevent defective construction is the prospect for litigation if the construction is not properly done.  Senate Bill 15-177 creates improper incentives and imposes improper solutions.  If this bill became the law, the developers and builders would have even less incentive to build condominiums properly.  They would know that any claim for defects would be steered into arbitration services.  Arbitration services are preferred by developers and builders because the awards are lower.

Developers and builders have the right to go to court in their legal disputes.  The owners of single-family homes have a right to go to court for their building defects.  The owners of commercial buildings, apartment buildings, farms and ranches all have the right to go to court to air their legal disputes over defective construction.  Senate Bill 15-177 creates a new subclass of citizens who don’t ever get to go to court: condominium owners.  Do all of you condominium owners and future condominium owners think you are second-class citizens?  I don’t.  Call your legislator.  Write them.  Call and write again.  You are entitled to equal access to the courts and equal protection under the law.  Equal.  Protection.

The attorneys at Altitude Community Law P.C. can provide guidance concerning the process for properly reporting claims to insurers.  Please feel free to contact us if you have any questions at 303.432.9999. 

William H. Short, Esq.
5 responses to “Equal Protection Under SB 15-177
  1. Statistically, people in the middle class are more likely to purchase a condo than people in the higher wage earning brackets. A higher wage earner will typically purchase a home rather than a condo. Homes are not effected by this proposal, only condos. This is another example of the growing divisions between the middle class and the higher class.
  2. Im a city planner as well as a property management company so I have seen this from both sides. In my opinion there has got to be some change to the existing law. It has effectively killed all new condo construction. Im looking at this from the perspective of the greater good.Affordable housing is a goal in most City comprehensive plans. Condo’s did a good job of filling that need. The current law has driven developers to build townhouses.When land cost sitting under a townhouse is added in, the price is no longer at the affordable end of the market. And the % of homeowners has dropped. I know that is not the only factor. But the Denver housing market has surprised everyone and has quickly rebounded. Many of the Planned Developments that we shelved are now feasible again, if they can be built as condominium where the density is based on condo units started 3 and 4 high on the same plot of land. A project designed to have one townhouse on one sliver of land simply can’t hit the density to bring down the cost of housing. Projects are having to to go back thru the costly entitlement process simply because the density granted by the City was for condominiums. The current law has added land cost to each unit and that simply hurts the goal of keeping housing affordable housing. I understand the concern for liability for a badly built product but Colorado’s affordable housing is needed by thousands .
  3. Why is it that big business always wants to take individual rights away. It is money. They are allowed to build shoddy housing units and not be responsible for their work. Whoever had the gall to sponsor this bill and move it forward should be removed from their office. It is purely a case of them being bought off by developers.
  4. Equal protection is what it’s all about in this country, but we no longer have that. Some have become “more equal” by virtue of their economic clout and their ability to “buy” legislation that tilts the scales in their favor. Not only in the realm of housing, but in all areas of life and in matters that are important to common people. Regardless of this bill’s outcome, new housing, of all types, will continue to leave “ordinary people” out. The whole paradigm is depressing. Denver is rapidly becoming an unaffordable place to live, and this type of legislation does absolutely nothing to help solve that issue.
  5. Can you believe a city planner cannot remember who he represents-the developer costs or the taxpayer who should not be shafted by developers nor the planning/ building departments. It is the planning & building department jobs to be ethical and see that the national building codes are followed; not let the developers whine for theirs’ or your profit. Since when is it a city planners job to represent the developer/builder and their profits vs. the established building codes?
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