Pending final version of the Bill we offer the following for your consideration:
An HOA construction defects Bill is anticipated to be introduced to the Colorado legislature. It would allow home owners to litigate construction defects damages in an out of court venue and to limit the powers of HOA Boards in using HOA funds in construction defects litigation. Guess who objects to this Bill?
Denver Post article , “HOAs vow to fight change to defects law”, April 23. The content was from interviewing CAI (Community Association Institute) spokespersons who vehemently oppose the Bill. Where do begin? First, HOAs are not opposing this Bill. There is no identified HOA organization opposing this Bill nor does one exist. The CAI surely doesn’t represent the interests of HOAs or HOA home owners. Next, the CAI claims home owners would be denied their legal rights to a jury trial in construction defects cases. Interpretation: the CAI wants to force home owners in construction defects cases and in the most minor HOA complaints (such as a records access complaint) to take their disputes to court. Court is too litigious, costly, and time consuming for home owners. Thus, the current system requiring court makes pursuing one’s legal rights not feasible. The Bill doesn't strip any home owner of their right to sue for damages. The Bill will allow for an affordable and accessible (out of court) venue via arbitration for home owners to litigate damages using their private funds. Next, the CAI objects to a provision in this law that would require home owners to approve any construction defects class action suit that would use HOA funds. This clause in the Bill is intended to protect and empower home owners from HOA Boards that could otherwise independently and without home owner awareness pursue high cost legal cases without their approval. HOA legal cases often result in material financial loss to HOAs and subsequent special assessments to replenish HOA reserve funds all without home owner involvement. This provision empowers home owners. Then the CAI indicated that out of court arbitration costs would not save home owners or HOAs in legal costs. The CAI makes things up as they go along. An individual’s court case on construction defects can easily run $20 – 30,000 or more and if you lose add the contractor’s legal costs. If the HOA takes on the case using HOA funds in a class action suit the costs can easily run in the hundreds of thousands of dollars. What would it cost to compensate one or a few arbiters for a day or two of work? Again, the CAI has proven to be the most anti-homeowner organization in the State and throughout the nation.
This Bill can provide home owners with a previously inaccessible and affordable out of court venue for dispute resolution (arbitration), save home owners and HOAs on legal costs, and empower home owners by having a say in how their HOA funds are spent. The final version of this Bill is yet to be known but you can bet when the CAI comes out against a Bill it surely is not in the interests of home owners.