An Oct. 20 decision of the Colorado Court of Appeals promises serious consequences to the local construction industry as well as its liability carriers.
As I had predicted, the construction industry’s efforts to have the Colorado legislature pass a revised construction defects law has failed. The bill was intended to assure that construction defects claims initiated by condominium homeowners associations be arbitrated before going to court. But all is not lost because developers and contractors of condominium projects have other avenues available to achieve the same result. It appears that a local developer, an affiliate of Metropolitan Homes, may have a solution.The construction industry’s fear that juries are likely to favor condominium owners and their associations in defects lawsuits has prompted the industry to
As is widely known to the Colorado construction industry, the number of new condominium projects being developed in metropolitan Denver and elsewhere in the state is few. The reason is largely attributable to lawsuits against condo developers, designers and contractors. It is no secret that many new apartment projects are being designed with the prospect that once those lawsuits can no longer be brought, they will be converted into condo units and sold. Under Colorado law, construction defect suits cannot be brought more than six years after substantial construction completion (with few exceptions).In an attempt to solve the problem, a
A Colorado electrical contractor appears to have had a shocking experience in its efforts to collect more than $600,000 due it for electrical work on a lower downtown Denver condominium project. Appropriately, the name of the electrical contractor was Sure-Shock Electric Inc. Not having been paid, Sure-Shock filed a mechanic’s lien describing the entire project, but it served only the required 10-day notice on the owner of seven unsold units. Because there was an arbitration requirement in its contract, Sure-Shock arbitrated the question of how much it was owed and then proceeded to court for a determination of the validity
Nowadays, it seems that almost every business and profession has an LLC after its name. That’s intended to indicate a “limited liability company.” What most people don't seem to realize is that those three letters alone don’t always mean “limited liability.” The idea of a limited liability company is generally good. If properly organized and maintained, limited liability companies have some of the benefits of corporations and some of the benefits of partnerships. There may be income tax advantages; company members have almost unlimited ability to make their own rules governing the activities, and their personal liability to third parties
There are currently about 15,000 apartment units but only 300 condominium units under construction in metropolitan Denver. Why? The answer is simple: Homeowners association lawsuits.For several decades there has been a cottage industry composed of lawyers, engineers, architects and homeowner association management companies who have collaborated in bringing lawsuits against condominium developers, design professionals and contractors claiming defects in design and construction. Some of those lawsuits have been meritorious, some borderline and others without foundation.The result of these lawsuits has been to discourage developers, design professionals and contractors from doing any new condominium projects, despite what many believe to be
For years, Colorado property owners, as well as banks and other lenders that had deeds of trust (mortgages) on real estate, paid off or settled with subcontractors and suppliers who claimed mechanic’s liens against the properties involved. They made those payments because they thought, or were advised, that the mechanic’s liens had priorities over the deeds of trust. That is not necessarily true. Whether a particular mechanic’s lien has priority over a deed of trust requires careful factual and legal study. If a subcontractor’s or supplier’s mechanic's lien does not have priority over the deed of trust, the subcontractor or
A recent decision of the Colorado Court of Appeals in the case of “Stresscon Corporation v. Travelers Property Casualty Company of America” provides an insight into insurance coverage under a contractor’s comprehensive general liability insurance policy. While the decision may be reviewed by the Colorado Supreme Court at a later date, it does appear to express the law as it now stands in Colorado. In the case, Stresscon fabricated concrete structural members that were being installed on the project when a panel fell, one workman was killed and another injured. Travelers, Stresscon’s comprehensive general liability insurance carrier, refused to defend
