Sunrise

Take a moment. Close your eyes.  Feel the sun on your face… shutterstock_228722404

Actually, this is not a Friday morning mediation.  But a title and tagline discussing “contracts law” would hardly promote readership.

The Colorado Supreme Court recently passed on the opportunity to consider whether sophisticated business entities could contractually modify the statute of limitations and agree upon an accrual period when constructing a project for residential use.  R.G. Brinkmann Company v. Broomfield Senior Living Owner, LLC and Sunrise Development. 2017SC351 September 5, 2017.

I had been watching this case with interest, not only because I was representing a subcontractor involved, but also because it could have far-reaching implications for all construction professions.  Frankly, the idea that sophisticated construction professionals could contractually modify the statute of limitation and agree to an accrual period for claims would have gone further in remedying the problems of the Colorado Construction Defect Action Reform Act and rising insurance cost than any action by the General Assembly last session.  The problem lay in the uncertain and amorphous concept of “substantial completion” and when/how defects are “discovered”.  Construction professionals face exposure for six or more years under the statute.  An attempt to contractually limit and define the period of exposure would be an obvious fix.  Although Justice Eid would have granted certiorari to review the questions presented by R.G. Brinkmann we have no other insight into the decision to leave the issues for another day.

Thus, we are left with the Colorado Court of Appeals decision and these takeaways: a commercially run senior assisted living facility is a “residential” project; even though none of the “residents” are homeowners, the project falls under the Homeowner Protection Act; and no matter how sophisticated the commercial entities are, they cannot modify the statute of limitations or agree to an accrual period for construction defect claims.

 

The Crippling Effect of ‘No’

At this point of the year, most architecture offices have either had a summer intern or have hired a recent graduate. These people come in with varying levels of experience, but for the most part, can be defined with a single term: enthusiasm. Most are younger and full of energy. They are coming from institutions that inspire and encourage thinking “outside the box”. The optimism is practically written across their foreheads.

Cut to a scene of a typical architecture office.

Most of us have lost a bit of the ‘fresh out of the box’ shine after a few years or even a few decades. We get bogged down by the limits of construction budgets, office politics, project schedules, and a myriad of other “they didn’t teach us this in school” subjects. It can be difficult to not project these extracurricular worries onto younger people that are fresher into the workforce. It can be hard not to see their optimism and eagerness and want to counter it with an underhanded comment about “in the real world” or “when you get further along in your career”. The biggest issue with countering enthusiasm with negativity is that it takes the momentum that people have and throws an emergency brake on it. Not only does it have the likelihood of curbing the current zeal for working in architecture, but it will also prove to be much more difficult to instill a sense of gusto in the future. People that have a sense of enthusiasm for work and the obvious want to do more should not have their energy stifled, but should be encouraged and guided.

This doesn’t just go for being a wet blanket when met with an overly peppy person. When they come to more experienced people within their offices with questions or ideas, the response should never be “ask someone else”, “we can’t do that”, or any other momentum killing “no” comment. It’s like the old adage of improvised comedy or acting: never say no. If someone comes to you with an idea in an improv sketch, you are not allowed to say no. Instead, you must take what the person has presented to that scene and play off of it in order to keep things moving forward.

We all have days (or mornings for some of us) where it’s difficult to find the enthusiasm and patience to deal with things that aren’t our own laundry lists of tasks. On the other hand, we have all been in the situation of being recent graduates and wanting more out of our careers and desperately wanting to prove that we are capable and worthy of being trusted.

We all have the responsibility of listening when people have questions, ideas, or just something to say and not shooting it down. Instead of stopping momentum in its tracks, we must guide it and turn it into productive learning because if we curb momentum early on, it will be just that much harder to start again later.

Construction Defect Disclosure Law Effective August 8, 2017

The Colorado Common Interest Ownership Act’s newest addition became effective August 8, 2017.  Colorado Revised Statute 38-33.3-303.5 (formerly HB 17-1279) was signed into law on May 23, 2017 and became effective this week.

The law requires homeowner association executive boards to satisfy new disclosure, meeting, and voting requirements before commencing an action against construction professionals under Colorado’s Construction Defect Action Reform Act (C.R.S. 13-20-803, et seq.).

Before beginning a construction defect action (defined broadly as any civil action or arbitration proceeding for damages….against a construction professional..for damages or loss to…real or personal property or personal injury caused by a defect in the design or construction of an improvement to real property…”), the executive board of a common interest ownership community must “mail or deliver written notice” to each owner AND to each construction professional against whom the action is proposed.  The construction professional must also be provided separate notice advising of the owner’s meeting.

The notice must contain a description of the  nature of the construction defect action, which identifies the alleged defects with reasonable specificity, the relief sought, a good-faith estimate of the benefits and risks involved, and any other pertinent information, including

Presumably, the notice of owner’s meeting would give the construction professional time to prepare a presentation, propose repair, or offer a monetary settlement to be made at the meeting.

Vague laundry lists of defects have been the norm in construction defect notices of claim and lists of defect.  While the new law could result in early notice and more full disclosure, there is no mechanism allowing the construction professional an inspection or to obtain greater detail and the new law lacks a strong enforcement mechanism.

The advisory notices need not be sent to any construction professionals identified after the first advisory notice is mailed, so construction professionals with discreet scopes of work may be left out in early stages.

As a practical matter, the new laws timing requirements may not provide construction professionals sufficient time to truly prepare a response to the allegations, much less rally the support of its insurance carrier and legal counsel before the owner’s meeting.  While there are benefits to open dialogue, construction professionals should participate in any owner meetings with caution: the association will clearly have retained counsel and has litigation on its mind; statements and presentations could be used as later evidence in a lawsuit; and early participation without the approval or involvement of your insurance carrier may also have coverage implications.

 

Five Years Out: advice to my past self from my current self

Over the last month or so, I have seen numerous pictures and heartfelt posts from recent graduates flooding the social media channels. It made me think back fondly of when I graduated from architecture school five years ago and even, as shocking as it may seem, made me think fondly of being in architecture school (I guess it’s true: time does heal all wounds).

This past week has proven more taxing than most as I was reminded that I still have a long ways to go in figuring out the whole “being an architect” thing and what that entails. It brought me back to my post-graduation days of thinking that I had a firm grasp on what I was supposed to be doing and how much I actually knew about architecture. This has led me here: to the ever cliché format of “what advice would I give my younger self?” So, without further ado: here are a handful of tidbits that “five years out of architecture school and recently licensed Drew” would give “just graduated and trying to figure it out Drew”.

  • It’s okay to not be working on your dream projects. Architecture school is, more or less, built around the idea of teaching us to THINK like architects, while professional practice is where we figure out all the other aspects that make up actually being an architect. It’s hard to go from dreaming up grandiose projects in school with no client and no budget and then move into the realm of construction budgets and numerous outside sources trying to influence the project with their own priorities in mind. It takes time to wrap your head around even the simplest building projects. Be patient and try to absorb the lessons that will come at you daily.
  • You won’t know how to do everything that people ask you to do. That’s okay. People are (usually) willing to help you out because they remember how it felt to be in your situation and they would rather spend the time showing you the right way to do things than have to tell you to fix them later. I spent a lot of time afraid to ask questions because I didn’t want to bother people because everyone seemed so busy. However, once I decided to take the initiative and speak up, the amount of things that I learned on a daily basis skyrocketed (and continues to grow every day).
  • Don’t be afraid to walk away from thing that are not the right fit for you. We often find ourselves in circumstances, be it jobs, workplaces, project teams, or just life situations, where we know that it’s not going to work out. If you are able to walk away from these things and better your circumstances and your own mental health, do it. Change can be frightening, but it’s even more frightening to think back on times that you wasted in situations that made you unhappy.
  • Get licensed ASAP. Seriously. You probably have as few responsibilities right now as you will ever have. Find a method of studying that works for you and stick to it. Find a person or group of people that you can lean on for support and pick their brains as much as you can. Don’t waste time thinking about getting licensed. Just go for it and don’t stop until you get to the end.
  • It will take time before people to take you seriously. It won’t matter how much prior knowledge you have on a subject, people will see that you are recently out of school and immediately assume that you know less than you do and treat you as such. It will be frustrating and at times cause you great angst, but do your best to let it roll off your back. It takes time to build up a working relationship with your project teams and clients before they trust you, so just give it time and try to take things in stride.
    • Side note: I am a white male, so if it’s this way for me, there are many others that will experience this same thing ten times over and, potentially, for much longer.

These points probably seem obvious to many if not most. However, that doesn’t make them less true. I wish someone had sat me down five years ago and vehemently made these points. On top of that, these are all things that I continually have to remind myself of even today. The learning curve is ever bending and all we can do is to try to keep things in perspective and continually grow with it.

Hopefully I won’t be writing the same thing in five more years about my current self. If so, with any luck we will have time machines by then.

Out for Summer

capitol_vd_bobashThe First Regular Session of the Seventy-first General Assembly is Out for Summer having adjourned May 10, 2017, so it seemed an appropriate time to recap Construction Defect Reform across the State.

This session again saw an ambitious batch of Construction Defect reform bills – six in in fact. Both the Speaker of the House and President of the Senate highlighted reform in their opening speeches.  The bills ranged from defining “construction defect” to early allocation of costs among defendant litigants.

However, the only bill to garner enough support to make it to the Governor’s desk was HB 17-1279.  The bill requires that, before the executive board of a unit owners’ association (HOA) in a common interest community brings suit against a developer or builder on behalf of unit owners, the board must: Notify all unit owners and the developer or builder against whom the lawsuit is being considered; Call a meeting at which the executive board and the developer or builder will have an opportunity to present relevant facts and arguments; and Obtain the approval of a majority of the unit owners after giving them detailed disclosures about the lawsuit and its potential costs and benefits.

The hope is that it will reduce the risk of construction defect litigation just enough for insurance companies to lower their rates, allowing builders to re-enter the owner-occupied multi-family housing market in Colorado.

It will likely take a few years for insurance carriers to respond to HB 17-1279 with rate reductions, and another few years for builders and developers to feel confident that HB 17-1279 offers any true protection from overzealous litigants, but apparently, hope springs eternal among the General Assembly.

The Colorado Supreme Court’s recent ruling in Vallagio at Inverness Residential Condo Association vs. Metropolitan Homes Inc. will probably have more impact; reinforcing the power of a Declarant to bind future HOA members to arbitration of construction defect disputes.

In early June, the Court ruled that a homeowners association was wrong to sue a builder after disregarding bylaws that require binding arbitration to settle claims of construction defects.  The association’s key misstep, the court said in a 5-2 ruling, involved its bid to change the rules to allow litigation without getting the consent of the development’s builder.

“Because the unit owners did not obtain the Declarant’s written consent to remove the declaration’s arbitration provision, the attempted amendment was ineffective. Consequently, the Association remains bound by the arbitration agreement …”

Cities also continue to effectuate change on the local level.  Those that currently have Construction Defect ordinances include:

Arvada, Aurora, Castle Rock, Centennial, Colorado Springs, Commerce City, Denver, Durango, Fort Colins, Lakewood, Littleton, Lone Tree, Loveland, Parker, Westminster, and Wheat Ridge.

These ordinances include a combination of Notice-Repair language (pre-suit notice to construction professionals with a right to repair); Disclosure-Voting requirements (pre-suit disclosure to HOA members and lawsuit approval); Substantive Law changes (limitation of type or scope of a construction defect claim); or Plat Note language (allowing developers to record plat notes mandating arbitration).

As we enter the 2017 summer construction season, once again very little has changed from years past despite reform efforts at the General Assembly.  The General Assembly will convene once again in January 2018, and we will continue watching the circus for any true reform.

Special Thanks to @AxiomPolitics for working tirelessly and keeping the Colorado Defense Lawyer Association up to date on all legislative matters.