Condominium developers will have greater protections from lawsuits under a new Durango ordinance that cleared its first hurdle on Tuesday.
The Durango City Council voted to support a process homeowners associations would have to follow to sue a developer over defective construction.
The threat of lawsuits and the high price of insurance have stalled condominium construction statewide, and La Plata County has been no exception.
“There is a growing consensus there is a problem at the state level,” Planner Mark Williams told councilors.
The new law will offer local protection to builders from lawsuits, but the councilors may adjust the wording to the ordinance when it comes before them again.
Councilor Christina Rinderle argued the law would be both symbolic and encourage construction.
“It could be a real change that starts here,” she said.
Mayor Dean Brookie was the only one who didn’t vote for the ordinance, choosing to abstain instead.
“I didn’t want to be accused of self-interest,” said Brookie, an architect.
During the public hearing, two residents questioned whether this law could help encourage construction or just make it harder for homeowners to fight shoddy construction.
The law would give developers a set timeline to acknowledge and decide to repair defects before homeowners association boards could file a lawsuit.
However, Jim Carver, who served on the board of a homeowners association during a lawsuit, said he had trouble getting builders to admit defects existed.
“We had to fight for everything,” he said.
In addition, the new law would require a homeowner association boards to get approval from the majority of their members before filing a lawsuit, according to city documents.
Residents argued that homeowner association boards are elected to make decisions for their members and that homeowners don’t seek out lawsuits.
“The last thing an HOA wants to do is file a lawsuit,” said Joe Lewandowski, who has served on a homeowners board.
Predatory lawyers are causing the problem seeking out these lawsuits and filing them over minor flaws, Brookie said.
Under the ordinance, homeowners associations would have to abide by a mediation or arbitration process required by the governing documents of the association. The homeowners association could not amend the documents to file a lawsuit instead.
Carver said arbitration would not have been adequate in his case.
“If you just go to arbitration, I’m very concerned the outcome wouldn’t be the same,” he said.
Rinderle assured Carver that lawsuits could still be filed, but the ordinance would ensure more people would have access to affordable housing.
Elsewhere in Colorado, 12 communities, including Aurora and Colorado Springs, have passed similar legislation. Durango would be the first on the Western Slope to pass an ordinance dealing with the situation.