Re:“,” Sept. 29 editorial.
While proponents of Sen. Jessie Ulibarri’s failed construction defects bill and Lakewood’s ordinance argue that amending current law is necessary to spur condominium construction, their goal is tort reform at the expense of homeowners. They argue since folks living in HOAs are holding builders responsible for their defective construction, the insurance market has dried up to cover the construction of new condominium developments. As a result, instead of focusing on building quality construction, they blame laws that allow homeowners to hold builders accountable for poor construction.
Fortunately for Colorado homeowners, insurance to cover construction of new condo developments remains readily available. While it is true that purchasing annual practice policies to cover liability for condo construction is going the way of the dinosaur, WRAP insurance policies are here to stay.
WRAP insurance policies cover the developer, general contractor and all enrolled subcontractors. That means when there are construction defects, you don’t have contractors lawyering up to point the finger at each other. Instead, this model promotes construction team cooperation, substantially reduces defense costs, and encourages settlement.
● These policies cover the construction team’s general liability on a cradle-to- grave basis and significantly reduce gaps in coverage. They promote a better built product by requiring third-party inspections during major phases of construction. Independent engineering firms monitor quality of the construction and identify potential defects early in the construction. Contractors are notified and can correct the defect before the homes are sold. While developers pay for this service, it is a cost of doing business.
● These policies are affordable, and are less expensive, in general, than annual practice policies. It puts certainty in the project’s budget process and significantly reduces the risks of future defects and coverage gaps.
Since affordable insurance which promotes quality construction for condominiums is available in Colorado, there’s no need to sacrifice homeowner protections in a “legislative fix.”
Molly Foley-Healy is the Colorado legislative liaison for the Community Associations Institute.
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