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Condo | HOA Lawyers

Developers Sometimes Draft Documents for Their Own Benefit

A Court in Colorado recently dealt with a developer who placed a provision in the declaration of a condominium association prohibiting amendment of the declaration – ever – without the declarant’s written consent, and requiring that all construction defect claims be resolved through arbitration (Vallagio at Inverness Residential Condominium Association, Inc. v. Metropolitan Homes, Inc. (395 P.3d 788)).

The Association subsequently presented the developer with construction defect claims, and amended their declaration – without the declarant’s consent – to remove the binding arbitration provision. The Association argued that the requirement that the declarant approve any declaration change was void because it violated the state’s condominium laws, which only required a certain percentage of owners to approve a declaration change.

The Colorado supreme court ruled in favor of the declarant, holding that the declarant’s restriction on amending the declaration – despite its restrictiveness – did not contradict or run afoul of state law. It further held that because the Association did not acquire the declarant’s consent, its amendment to the declaration was void.

Lesson. Developers draft documents to benefit the developer.  While the law places limits on this “power,” it’s important that your Association comply with its governing documents and the law.

If you have any questions, please feel free to contact us.

 

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