Press for condos could lead to changes in builder defects law

On Behalf of | Oct 24, 2014 | Uncategorized

A dispute taking place in a state outside of Kansas has gotten our attention. It’s taking place in Colorado, but the elements of the case seem to have ramifications that everyone in the construction industry would likely be interested in.

At the core of the issue is a Colorado state law that critics say makes it very easy for homeowners to take builders to court over alleged property defects. Opponents of the measure say that the law has drastically reduced the new construction starts on condominiums all over the state and apparently especially in and around the Denver area. 

Legal observers say the law is a development staller because it allows lawsuits against builders to proceed on a majority vote by a homeowner association board. The critics say the law would be better if it made such litigation dependent on a majority vote of all homeowners in a given building. As a result of the law, some builders say they just won’t do condo projects in Colorado.

Earlier this month, though, the leaders of one community decided to buck the state. The city council passed a local ordinance that gives builders and contractors the opportunity to make repairs when confronted with defect claims before any suit can be filed. It also puts the vote for such litigation in the hands of all homeowners, not just the board. And in the wake of that action, other communities around the Denver area say they will begin to consider taking similar action.

The new ordinance is coming under fire from critics who say it erodes homeowners’ power to hold builders accountable. They also say the poor economy, not the state defect law, is the reason development is stymied.

The question on the minds of many now is whether the new ordinance will stand the test of the court challenges that are bound to come.

Source: The Denver Post, “Interest in Lakewood defects measure intensifies across Denver metro,” John Aguilar, Oct. 19, 2014


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