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Sunday, 12 October 2014

HOA homeowners oppose construction defects legislation  
“Senator Ulibarri is about to introduce a bill that should be called the ‘Horrors of Homeownership Act,’” said Molly Foley-Healy, chair of CLAC. “Senator Ulibarri’s stated goal is to create more affordable housing, but this bill has nothing to do with affordable housing. Instead, it hurts the very people he said he wanted to help. It effectively blocks homeowners from holding builders responsible for their shoddy construction and leaves homeowners living in HOAs to pick up the tab for repairing the defects.”

HOA homeowners oppose construction defects legislation 
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In response to the anticipated introduction of a construction defects bill by Colorado Senator Jessie Ulibarri (D-Commerce City), the Colorado Legislative Action Committee (CLAC) of the Community Associations Institute (CAI) stated it virgorously opposes the bill, which would strip away consumer protections and homeowners’ rights to protect themselves from construction defects in HOAs.

“Senator Ulibarri is about to introduce a bill that should be called the ‘Horrors of Homeownership Act,’” said Molly Foley-Healy, chair of CLAC. “Senator Ulibarri’s stated goal is to create more affordable housing, but this bill has nothing to do with affordable housing. Instead, it hurts the very people he said he wanted to help. It effectively blocks homeowners from holding builders responsible for their shoddy construction and leaves homeowners living in HOAs to pick up the tab for repairing the defects.”

According to Foley-Healy, the builders were masterful in crafting provisions in the pending bill to eviscerate consumer protections that currently safeguard homeowners living in HOAs from poor construction by developers.

One such provision would force homeowners to comply with self-serving provisions that developers unilaterally place in governing documents when they have sole control of the community during the construction phase.  Since the builders don’t want to risk the potential of costly jury awards for their shoddy construction, the builders have drafted provisions which ban associations from holding the developer responsible for its construction defects in a court of law. In effect this allows the builder to write the rules by which the homeowner must abide, gives the developer veto power over the decision to seek adequate remedies for the very construction they built and takes away the fundamental right to a jury trial.

Other objectionable provisions crafted by the builders to ensure that homeowners living in HOAs have no recourse against them for their shoddy construction include:  a prohibition on utilizing legal experts to assist the association in preparing technical and legal disclosures intended to scare homeowners away from seeking remedies against their builders; building timeframes into the bill obviously intended to make it impossible for HOAs to comply with applicable statutes of limitations and repose; prohibiting elected boards of HOAs to proceed with action against builders without obtaining the written consent of a majority (51 percent) of the owners in the association and even prohibiting owners from using proxies which are commonly recognized and accepted under Colorado law.  Taken together, these provisions would make it impossible for homeowners to hold builders responsible for their defective construction.

“Bottom line, this bill strips away any incentives developers currently have to build quality construction and will guarantee defective construction.” said Jon Harris, vice president of The Point Owners Association.

The Point Owners Association, Inc. is a 68-unit mixed use community in Five Points, Denver. Because of construction defects at the community, Point homeowners have endured repeated water intrusion at doors, windows and balconies. Rotted wood as a result of the water has caused mold-growth in the homes. Ultimately two homes became uninhabitable because of water damage.

After years of negotiating, The Point homeowners had no choice but to sue the builder to recover some money for repairs. While recovery will help, it is not enough to fix everything and homeowners are fearful if the bill passes, it will become even more difficult for homeowners to hold negligent developers and builders responsible for construction defects.

“Many of the people in our community are on fixed incomes, so having to pay out of our own pockets for construction defects would financially devastate some of our homeowners,” added Harris.

“HOAs and the folks who own homes in them are not the problem,” said Foley-Healy. “The problem is defective construction.  As a result, the legislators should be looking at ways to provide incentives and the tools necessary to build quality construction.  Taking away the ability of homeowners to hold builders responsible for their defects, will guarantee that future purchasers of new construction will experience the horrors of homeownership.”

The Community Associations Institute is the professional trade association for HOAs. One-third of its membership consists of homeowners (community association volunteers and board members. ) One-third are HOA managers and one-third are business partners who provide services to HOAs. It has two chapters in Colorado: the Rocky Mountain Chapter based in Denver and the Southern Chapter in Colorado Springs. For more information, visit www.hoa-colorado.org or www.caisoco.org.



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