What Happens When Government Fails to Ensure Quality Construction in HOAs?
guest blog by Deborah Goonan
Does your HOA have problems with shoddy construction or defects in common areas such as roads, storm water drainage, street lighting? Did your developer fail to deliver what was promised at the time of sale?
If so, you’re not alone. Check out the video reports linked below. Hidden Lake Estates HOA in Sherwood, Arkansas, has issues with poor drainage, causing owners’ yards to flood every time it rains. At Stone Hill Estates HOA in Durham, North Carolina, the Developer has left roads, sidewalks and storm water drainage systems unfinished for several years.
Owners from both HOAs have appealed to city leaders to help resolve these issues. In both cases, the Cities initially balked at getting involved. However, one council member from Sherwood has called for an investigation into storm flooding at Hidden Lake, and a judge in Durham recently ruled that the City help pay for unfinished work at Stone Hill. Protracted battles will likely continue. These are just two examples, but this is becoming a common problem all over the country.
Who’s responsible, and who should pay?
During the building boom of the last decade, plenty of planned developments and condominiums were hastily approved and built to keep up with growing buyer demand. Additional contractors were hired, and some of them lacked sufficient skills. When the dust settled, problems began to appear.
It’s clear that architects, design engineers, and developers ultimately bear responsibility for the quality of their work and that done by their construction crews, but the obvious unasked question is:
What is government’s role in development of HOAs and prevention of poor construction?
Local development and planning commissions have responsibility for issuance of construction permits, establishment of building codes, inspection of work at various phases in the project, and issuance of occupancy permits upon successful completion. In many cases, additional state and local agencies, such as the Department of Environmental Protection also play a role in ensuring development meets health and safety standards.
As taxpayers, we expect our local government agencies to ensure that our homes and major infrastructure of our communities are built to a standard of safety and reasonably sound quality. Unfortunately, as evidenced by thousands of construction defect claims in the past decade, local planners and inspectors quite often fail to do due diligence before, during, and following construction.
Why? Perhaps it is because city or county staff does not have to maintain HOA infrastructure or Condominium buildings. Therefore they are not overly concerned about quality of design and construction, and ease of maintenance.
Worse than that, sometimes our local elected officials undermine quality control policies.
Take the Lakewood City Council of Colorado, for example. (see link) The Council wants to enact an ordinance that would make it easier for Developers to avoid litigation of construction defect claims with HOAs. If passed, the ordinance would reduce rights that currently exist under state law, making it more difficult for HOAs to sue.
Supporters of the City ordinance claim that current state law makes it too easy for owners to sue Developers, drives up the cost of insurance, and makes it unfeasible to construct additional entry-level condominiums for millennial buyers.
So let me get this straight: Lakewood City Council wants to make it easier for developers to avoid liability for shoddy construction, in order for the Mayor and Council to entice Developers to build more Condos (with HOAs). No doubt, the city government’s goal is to increase its tax revenue base, with minimal impact to the city budget. But at what cost to taxpayers and consumers?
In all fairness to Lakewood City, local government politicians in cities and towns all across the nation have adopted a similarly misguided stance.
Dare I say, depending on the politics of local government, committees that vote to approve new construction projects can have cozy family or business ties to real estate developers and to investors?
Attorneys representing all sides of ensuing controversies – developers, engineers, construction companies, HOAs, owner groups in HOAs – are the only clear winners when local government fails to prevent shoddy or unsafe construction in the first place. Owners of HOA properties often find themselves stuck with unresolved problems, damages to personal property, uncooperative Boards, special assessments to cover fees for attorneys, and possibly even higher property taxes.
In HOAs, owner financial responsibility for common areas often leads to common headaches.
(link to video of defective drainage in Sherwood, AR HOA)
(link to video of unfinished development, Stone Hill HOA, Durham)
(link to article on proposed Lakewood, CO ordinance)
