Wednesday, March 18, 2015

Colorado Lawmakers Debate Construction Defects Bill CBS Denver

Colorado Lawmakers Debate Construction Defects Bill  CBS Denver

The quest for the waterproof condo continues. Hint: solutions aren't likely to be found in state legislatures.


IC_deLight said...

Solution is to quit making condos. They don't work. The homeowner is not the true beneficiary.

robert @ colorado hoa . com said...

The various news stories I've seen about this seem to conflate "home owners" with "H.O.A. corporation". Is this about home owners suing developers, or H.O.A. corporations suing developers? Because having an H.O.A. corporation act as a third-party intermediary between home owners and another party often has negative consequences for the home owners (e.g., the numerous stories about condo water bills on this blog).

It's also remarkable (actually, it's not) that the ongoing H.O.A./construction defects prosecutions in Nevada -- which has resulted in 4 convictions, 37 guilty pleas, and 4 deaths of witnesses so far -- hasn't been mentioned. One would hope that our policy makers would have learned a lesson, or at least gotten a clue, from what's happening on in Nevada.

The tagline for the crappy 2004 science-fiction movie Alien vs. Predator was "Whoever wins, we lose" ( see movie poster at ). Likewise, I suspect that whatever the outcome of the "H.O.A. corporations vs. developer corporations" legislation, the home owners will be the losers. The news story states that "Senate Bill 177 has bi-partisan support in both houses". The Colorado legislature isn't known for protecting the interests of home owners, and "bi-partisan" usually means that both political parties have agreed to screw over the rest of us.

robert @ colorado hoa . com said...

"Solution is to quit making condos. They don't work. The homeowner is not the true beneficiary."


Four years ago, Professor McKenzie said in an Urban Institute video that 

"The's kind of almost a fictional real estate interest. These things can only exist by statute...Condominiums can only exist where statutes authorize them to exist. So we've had them since about 1960."

As Steven Siegel wrote back in 2007:

 "Before 1960, the condominium form of ownership was unknown in the United States. Beginning in the early 1960s, the states began enacting statues authorizing the condominium form of ownership, principally in response to the enactment of the National Housing Act of 1961, which extended Federal Housing Administration mortgage insurance to the condominium form of ownership. See McKenzie, supra note 2, at 95. By 1967, all fifty states had enacted condominium statutes. Id. at 95–96." ("The Public Role in Establishing Private Residential Communities" Urban Lawyer. Fall 2006. Footnote 23 on page 869.)

Tyler Berding's "The Uncertain Future Of Community Associations" (2005) should be required reading for our policy makers. Long story short: buildings have limited life spans, and eventually the costs of maintenance are greater than the value of the buildings, resulting in a death spiral that puts increasing financial pressure on the individual owners and the H.O.A. corporation underfunded.

And this blog is full of condo horror stories, from utility issues (such as water being shut off to entire complexes, because H.O.A.s are allowed to act as an intermediary between the utilities and consumers) to investors buying a majority of units and evicting the remaining "owners" (leaving the evicted owners only with the obligation to pay their mortgage for a property they no longer own nor live in).

There's no historical basis for condominiums (our ancestors knew something we don't), and after 50+ years, it's safe to declare the experiment a failure. But, there's too many people making too much money from them, so nothing will be done.