Sunday, October 19, 2014
Colorado Construction Defects and HOAs: the simple made complicated
The issue of construction defects litigation just shouldn't be this complicated. The reporting on this issue has focused on civic organizations and the construction industry contending that too many law suits made too easy by HOAs and condominium associations make building affordable housing too difficult and costly. Then from the HOA lawyers perspective who get their hands into the bank accounts of HOAs to fund costly and in many cases financially devastating law suits argue that HOAs and home owners can't have their hands tied in defending home owners against shoddy construction practices. The contentious issue behind all this is whether HOA home owners, and this includes condominium complexes with community associations, would be required to vote on whether to use HOA funds prior to the Board pursuing construction defects litigation. Simple HOA legislative reform in existing HOA law requiring home owner approval prior to using HOA funds in law suits would seem resolve most if not all issues in this controversy. This would empower home owners in the use of "their funds" and require HOA Boards (and their lawyers) to inform and educate the home owner on the proposed legal action including the cost/benefit and risk in legal action and in the event of an unsuccessful legal action the estimated, if any, resulting special assessment on home owners to pay legal fees. It would surely cut down the number of construction defects cases but at the same time keep in tack the ability for home owners (HOAs) to arbitrate (which is already mandated in many HOA governing) and/or pursue legal action. Why is the easy made so often so difficult?