We’re only halfway through 2016, but it’s already easy to see the damage done by bad developers who have taken over city councils with their campaign donations and harmful ordinances. Denver (draft), Aurora, Lakewood, Lone Tree, Littleton, Parker, and Commerce City city councils have already proposed and passed harmful construction defects ordinances, which restrict the rights of homeowners in those cities. Denver and Westminster are said to be considering similar ordinances – all in the name of increasing affordable housing. However, when put against facts, that talking point does not hold up and, sadly, the citizens in need of affordable housing are the ones these ordinances are hurting the most. They are the ones who cannot afford to fix what construction defects they may find.
Below are some examples of what the ordinances are doing to our cities. They must stop now.
Denver City Council’s business development committee recently voted to advance an ordinance that would harm homeowners who have unknowingly purchased new homes with construction defects. This ordinance would:
- Exempt builders from complying with important standards. Builders could violate manufacturer instructions for proper and safe installation if done “to code.”
- Prevent homeowners from amending declaration. Developers could write rules forcing binding arbitration on homeowners with no chance of appeal, as well as controlling who the arbiter is, the timing of arbitration and who pays for the private judge/arbiter.
- Require expensive, burdensome homeowner disclosures. Homeowners would have to hire expensive experts to provide the information to meet disclosure requirements – and slow down the process to run the clock out on legal action in some cases.
- HOA voting process mandates violate existing law. Meddling in HOA board construction defects process violates the Colorado Common Interest Ownership Act and Uniform Common Interest Ownership Act.
This ordinance will be discussed at the Nov. 3 Mayor-Council meeting, and is expected to be considered for “first reading” at the Denver City Council meeting and “second” and final reading on Nov. 17.
Lone Tree passed an ordinance to restrict homeowners’ rights to hold builders accountable for shoddy construction. The construction defects ordinance:
- Takes away homeowner associations’ right to a jury trial. The ordinance prohibits HOAs from legally amending their governing documents to seek a jury trial. As a result, the ordinance takes away homeowners’ fundamental right to a jury trial.
- Force homeowners association into an expensive arbitration process. While a plaintiff in a civil lawsuit can file a case for $322, arbitration typically costs $60,000 to $100,000 for an HOA construction defect case.
- Takes away HOAs’ right to govern themselves. The ordinance requires a majority of unit owners, who have elected their association board to make decisions involving the community, to vote in favor of bringing a construction defect lawsuit.
- Regulates areas of law already covered by state statutes. Colorado already provides extensive protections to builders who make construction mistakes. State law requires that homeowners provide builders with an opportunity to make things right and already requires that HOAs provide notice to association members regarding construction defect lawsuits. The ordinance is inconsistent with Colorado’s state statutes and its attempt to regulate these areas of law is outside of Lone Tree’s jurisdiction.
Lakewood Mayor Bob Murphy proposed – and passed on a 7-4 vote – the misguided Ordinance 21 construction defect ordinance that puts anyone who dares to buy a home in Lakewood at serious risk.Intended to spur condominium construction, it will sacrifice homeowner rights by allowing builders to shirk responsibility for construction mistakes, encouraging shoddy construction and bad building practices. If it stands, it will:
- Take away the right of homeowner associations to govern themselves. The proposed ordinance imposes unreasonable requirements and restrictions that make it very difficult for associations to pursue legal claims against builders and developers.
- Take away homeowner associations right to a jury trial. The proposed ordinance prevents HOAs from legally amending their governing documents to seek a jury trial, taking away homeowners’ fundamental right to a jury trial.
- Promote the construction of defective homes. The proposed ordinance specifically allows builders to destroy construction defect evidence that a homeowner would need to prove claims– and also allows builders to opt out of ordinance rules without giving similar opt out rights to homeowners.
- Conflict with state law. The proposed ordinance is inconsistent with Colorado state statutes already providing extensive protections to builders who make construction mistakes, including requiring homeowners to provide builders with an opportunity to make things right and HOAs to provide notice to association members regarding construction defect lawsuits. This attempt to regulate these areas of law is outside of Lakewood’s jurisdiction.
Lakewood City Council members were fooled by proponents who claim that builders unable to obtain insurance for construction defects are the reason for a lack of new condo building – because a number of insurers currently provide insurance to builders for condominium construction. Unfortunately, innocent homeowners who thought they were buying properly built homes will be the losers when they have little to no recourse.