A business law in Colorado that gives homeowners' associations an unfair legal advantage is currently being reconsidered by state leaders and legislators. Current legal provisions were designed to protect condominium buyers from defects in the homes they purchased. However, a growing number of real estate contract disputes have also involved homeowners' associations that file massive group lawsuits for development construction problems. Now, experts say that the state's economy is being hindered by gun-shy developers who are afraid of unnecessary legal action.
Political leaders in Lakewood and Aurora have said that condominium complexes are no longer being constructed in their suburbs. The dearth of condominiums in the area has led to a tightening of the region's rental market. Condos are listed for only a short time before they are snatched up in local real estate closings.
Proposed changes to the current law would allow developers to promote economic growth for first-time home-buyers who are currently stuck in the rental market. Legislators who support the bill say that developers would begin constructing multifamily units again throughout the state, leading to a variety of real estate land use benefits. They are working to organize community members to support this controversial change.
Consumer advocates say that modifications to existing law would leave home-buyers with few legal options if structural defects were found in their Colorado condo. Buyers would therefore be required to pay for their own repairs, which could deter homeowners from entering the market. Shoddy work could become the norm if those consumer protections are abandoned, they say.
Condo owners do deserve legal protections to prevent them from being swindled by unethical developers. Those construction deficiencies could lead to personal injury or damage to property. Developers, along with real estate agents and buyers, will all have to adapt to a new set of rules if the law is ultimately modified.
Source: Denver Business Journal, "Colorado officials demand change to condo defects law at State of the City address" Molly Armbrister, Aug. 15, 2014