Beware the Ides of March for Adoption of CD Ordinances!

On March 15, 2016, two more local governments adopted construction defect ordinances. Under local government public health, safety and welfare powers, municipalities are attempting to supplement perceived deficiencies in the Colorado Construction Defect Action Reform Act with the intent of decreasing builder and developer liability represented as an effort to promote affordable housing. Loveland adopted Ordinance No. 6004, and Fort Collins adopted Ordinance No. 030-2016.

Both ordinances include some of the typical requirements we have seen in others including, written notice to builder upon discovery of defects, builder inspection and testing rights, and owner notification and majority consent before an HOA can file a construction defect lawsuit. However, each municipality has included provisions in their respective versions to distinguish them from the rest of the pack.

The Loveland ordinance includes a builder right to repair provision. However, the right is not automatic, but is contingent upon the builder obtaining the owner’s written permission before it can correct any construction deficiencies. Owners still have a say and control over whether the builder can provide repairs!

The Fort Collins ordinance includes a prohibition against removal of mandatory CD alternative dispute resolution (“ADR”) provisions from the declaration, increasingly more common after the Vallagio case. However, in addition to making the amendment ineffective and void as against public policy, the ordinance provides that any person convicted of modifying or eliminating the ADR requirement, may be guilty of a misdemeanor or civil infraction and subject to further penalties and fines. Be careful of handcuffs and start saving your bail money now!

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