October 13, 2015
Ordinance for reform of construction defects code could get a final vote of city council by mid-November
Denver is weighing in on the vexing issue of construction defects reform with the unveiling Tuesday of a proposed ordinance the city hopes will pump renewed vigor into the local condo market.
The city is borrowing familiar elements from construction defects measures passed by suburban communities during the past year but is introducing concepts and approaches not seen before.
“What excites me is the uniqueness of this,” Mayor Michael Hancock told reporters Tuesday morning.
The mayor called the ordinance a “common-sense approach” to navigating a legal environment that many have blamed for slowing condominium construction in the metro area to a crawl.
Critics of the existing system claim state law makes it too easy for homeowners in multifamily communities to sue over claims of shoddy construction, resulting in insurance companies raising rates for condo builders. Builders, in turn, eschew condo projects in favor of apartment units, they claim.
The new elements of the city’s proposed measure, which could get a final vote by mid-November, center on the way the city’s building codes may be used in a defect claim.
First, as long as a project is built and maintained in conformance to Denver’s building code, it could not be called defective in a civil action, the ordinance states.
Second, building code violations could be cited in a defects lawsuit only if the violations can be linked to actual damage or injury, not if they merely represent a technical violation of the city’s code.
“The kind of claims that will be allowed are those where a plaintiff can prove that some sort of negligence led to a defect that led to some sort of damage or injury to somebody,” city attorney David Broadwell said.
While one of the primary goals of the proposed ordinance is to minimize the number of frivolous claims filed in court, Broadwell said, homeowner protections wouldn’t be sacrificed to get there.
“Our council is very sensitive to doing anything that could be perceived as anti-consumer,” he said.
Councilman Kevin Flynn said that although something needs to be done to reform state law to improve the environment for condo construction, consumer rights are at the top of his mind.
“I want to make sure we’re protecting the rights of people who are truly injured by a construction defect,” he said.
But Jonathan Harris, president of Build Our Homes Right, said a brief reading of the ordinance Tuesday left him with doubts.
“It sounds like more of the same of giving builders a pass on this without taking responsibility for their product,” said Harris, a Denver resident who dealt with a long-time defects case at the Five Points home where he lives. “If they build a product and they sell it to a consumer, they should back up their product.”
He said the new element of Denver’s ordinance only “muddies the water,” leaving it unclear as to who would determine whether a project was built to code.
He expressed disappointment at not having been consulted by the city before it drafted the measure.
“It looks like homeowners will be left holding the bag again,” Harris said.
The construction defects issue dominated part of the legislative session in 2015, but a bill meant to reform the law failed to pass the House.
A handful of communities — including Lakewood, Littleton, Aurora, Lone Tree and Commerce City — have taken matters into their owns hands by passing local measures to deal with the issue.
Denver incorporated parts of those measures into its proposed ordinance.
Denver’s ordinance would require the consent of a majority of condo unit owners before defects litigation is filed. The city also would recognize the dispute resolution method written into the declaration of covenants as binding — not to be amended down the road unilaterally by a homeowners association.