Colorado Appellate Court Upholds $1,850,000 Construction Defect Verdict in Challenger Homes Community

by Jeffrey Kerrane KS NewsColoradoConstruction Case Law & StatutesHomeowner AssociationsNewsPress Releases

November 19, 2020 -- The law firm of Kerrane Storz received a major win today in a Colorado appellate court case for a neighborhood built by a Challenger Homes affiliate.  The case could mark a major expansion of warranty protections for homeowners throughout the State of Colorado.  The appellate court case contained several major holdings that are beneficial for Colorado homeowners including:

1.  Builders provide implied warranties of habitability and workmanlike construction, even if the seller of the homes is a different entity;

2.  A developer or builder that takes over the development and construction of a community from another developer or builder is responsible for delivery of properly constructed common areas for the entire community;

3. A community association may recover damages for repair of all the construction defects in the common areas, even if not all owners in the association are original purchasers;

4. A verdict entered against a developer or builder on a warranty claim cannot be reduced by a community association's negligence; and

5. A community association has standing to bring claims for damages to the common areas, regardless of whether the common areas are owned by the Association or the individual owners.

This landmark ruling in Brooktree Village Homeowners Ass'n v. Brooktree Village, LLC, 2020 WL 6789033 (Colo.App., 2020), followed a $1,850,000 verdict to the Association on its warranty claims against the developer and builder.  The case presented a matter of first impression regarding a builder’s responsibility to deliver common areas in a good and workmanlike manner, even when the builder took over the development and construction of the neighborhood after the departure of another builder.

In issuing its landmark ruling the three-judge panel held that "a homeowner's association may recover from a successor developer or builder the entire cost of remediating construction defects in common areas where (1) the defects are attributable to the successor developer or builder; (2) two or more of the association's members purchased their homes directly from the successor developer or builder; and (3) those members have rights to use the common areas — even if the successor developer or builder never owned the common areas."

"The Appellate panel in this case recognized that developers and builders owe a duty to provide habitable, properly constructed homes and common areas to the owners and to the community association regardless of whether owners sell their units or whether the developer or builder are taking over the development of a community after another developer or builder leaves," said trial counsel for the Association, Heidi Storz.  "This appellate court decision rightly levels the playing field and ensures fairness for Colorado homeowners.  When developers or builders sell homes in a community, the developer and builder are responsible for the whole community and can't blame problems on a prior developer or builder."  

The case resulted in a confidential, post-verdict settlement with builder and related entities, including Challenger Homes.

The law firm of Kerrane Storz, P.C. represents property owners and community associations in construction defect matters.


Heidi Storz



SOURCE  Kerrane Storz, P.C.