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New Community Ordinances Help Builders, Hurt Homeowners

By Burg Simpson

June 23, 2015   Colorado Blog, Colorado Construction Defects

One of the hottest topics right now in Colorado is proposed, and in some cases already enacted, legislation that seeks to insulate construction professionals from being held responsible when construction defects in their projects come to light. Understandably, this construction defect legislation has generated its fair share of controversy as industry groups and consumer advocates debate its true goals. While two bills were pending at the state level (both ultimately failed to pass as described in our previous blogs, New Bill Would Have Stifled Consumer Rights in Suits Against BuildersPart 1 and – Part 2), some Colorado communities have already taken the issue into their own hands, passing local ordinances that are rolling back the right of homeowners to sue builders whose finished products don’t stand the test of time.

Quantity over quality?
One of the first communities to pass such an ordinance was Lakewood, which lies west of Denver and is the state’s fifth most populous city. Near the end of 2014, the City passed an ordinance based on its purported desire to “spur condo building”. Among other things, Lakewood’s regulation makes it more difficult for homeowners in townhome and condominium developments to sue over defects such as faulty building exteriors, structural deficiencies, cracks in concrete, and ineffective drainage.

This ordinance also provides builders the “right to repair” sloppy work prior to being susceptible to legal action by dissatisfied homeowner associations. It also requires that the majority of homeowners in a development approve legal action before it can be taken, instead of the majority of the board of directors of the association.

Other Colorado municipalities that have passed similar legislation include the City of Littleton, the City of Lone Tree, and the Town of Parker, while the City of Englewood, the City and County of Broomfield, and the City of Brighton are all considering such legislation.

Will quick fix lead to more short cuts?
Many homeowner associations and everyday Coloradoans are not pleased with the Lakewood ordinance and fear that such regulations will spread across the state. According to the president of one homeowner association, such ordinances serve primarily as a barrier to holding builders accountable for their work’s quality and durability. With far less accountability in sight, the incentive for builders to trim costs and cut corners even more than they already do may prove irresistible.

According to Lakewood’s mayor and city council members, the ordinance will lead to more diverse housing opportunities. One has to wonder, however, who might be interested in purchasing homes in a community in which the developer, builder and other members of the design and construction team have very little accountability for their work and a blank check to construct second-rate condos that fall apart within a few years.

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