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Oct 6, 2015 - Council Amends Code in Response to State's Failure to Address Construction Defects Reform

Arvada, CO . . . In a 7 – 0 vote, the Arvada City Council amended its Land Development Code at their October 5, 2015 meeting in order to address issues related to construction defect lawsuits.

Specifically, the ordinance provides for the inclusion of a note on a multi-family plat that requires mandatory arbitration of construction defects claims, if such a note was requested by the owner/developer. 

With the coming of the Gold Line in 2016 and the demand for multi-family housing in and around transit stations, the current law on construction defects has inhibited the development of for-sale multi-family housing.  Builders, pointing to the high cost of, or inability to obtain, insurance for owner-occupied, multi-family housing construction projects due to construction defect lawsuits brought by HOAs, have chosen instead to develop rental units.  For example, both the Park Place and Solana projects which will add over 400 multi-family units in the vicinity of the Olde Town Arvada Transit Station are being developed as rental units.

As a result of the failure of the State Legislature to consider construction defect reform, a number of municipalities in Colorado have already adopted ordinances to address the construction defects issue, including Lakewood, Littleton, Lone Tree, and Parker.  Arvada’s ordinance is based upon Parker’s approach.

“This has been a big issue at the Metro Mayor’s Caucus, and there’s been a lot of discussion and debate throughout the region,” stated Mayor Marc Williams.  “We need to hold down the cost of construction so that attainable units can be purchased by first-time buyers, or people who are downsizing.  It’s a great pathway for people to be able to achieve owner-occupied housing.  In this economy, at this time, owner-occupied multi-family is the best opportunity for first time buyers.”  He continued, “This ordinance does not fully resolve all the issues related to construction defects, but it is a good first step for our community.”