Rules to govern lawsuits over construction defects were refined this week by the Durango City Council.
A state law that exposed developers to more lawsuits over defects has slowed condominium development statewide, but municipalities have passed laws to protect builders in hopes that it will reverse the trend and encourage the state to act. Durango will likely join the ranks of these other cities soon.
The city’s law would require a majority of the members of a homeowners’ association to approve a lawsuit against a developer as opposed to just a vote of the associations’ board.
The City Council backed away from requiring associations to pursue arbitration or mediation before filing a lawsuit. That is required under state law because of a recent court decision, which would make a local law unnecessary, City Attorney Dirk Nelson said.
But if the case governing arbitration goes to the Colorado Supreme Court, it could motivate a new state law, he said.
“Then our ordinance would be superseded by that anyway,” he said.
Previously, the council had decided to allow homeowners associations to avoid arbitration if they voted to amend their documents. Councilors did not take formal action on the ordinance, but they decided not to hold another public hearing on the law before voting on July 5 because they have already taken comment and the changes are insignificant.
“We’re talking semantics,” said Councilor Dean Brookie.
The Home Builders Association of Southwest Colorado supports this ordinance because similar local laws have given developers confidence to start building condominiums even though the cost of insurance for these projects has not gone down, said Lisa Laughlin, executive officer of the association.
“It’s going to be a vote of confidence for the state to do something,” she said.