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HomeMy WebLinkAboutZOA-15-031 i City Of ��Wheatkidoe ITEM NO: DATE: August 24, 2015 REQUEST FOR CITY COUNCIL ACTION TITLE: COUNCIL BILL NO. 11&_ - AN ORDINANCE ,% ...,,.., n NEW ARTICLE XIII TO CHAPTER 26 OF THE WHEAT RIDGE CODE OF LAWS CONCERNING REPAIR OF CONSTRUCTION DEFECTS ® PUBLIC HEARING ❑ ORDINANCES FOR I ST READING (07/27/15) ❑ BIDS/MOTIONS ® ORDINANCES FOR 2"D READING (08/24/15) ❑ RESOLUTIONS QUASI-JUDICIAL: ❑ YES City Attorney ►�� • ISSUE: The City Council finds there is a need for affordable housing generally, and in particular, in proximity to new transit stations being developed within the City. The lack of such affordable housing is related, in part, to the cost of construction insurance. Other Colorado municipalities have recently adopted construction defect legislation, including Lakewood, Arvada, Lone Tree and Littleton. Amending the Code gives builders the opportunity to correct construction defects before suit is brought. PRIOR ACTION: Council reviewed the issue at study sessions on May 5`h and May 18`h and directed the City Attorney to draft this ordinance. FINANCIAL IMPACT: None BACKGROUND: Despite a genuine demand for housing options, statistics show that almost no owner -occupied, multi -family developments, or condominiums, are being developed in and around Wheat Ridge. The general consensus is that the scarcity of condominiums available for sale in Wheat Ridge is Council Action Form - Construction Defects August 24. 2105 Page 2 the result of a litigation climate that puts builders and developers at risk of substantial judgments, often including punitive damages, for alleged construction defects. Colorado's restrictive laws have greatly increased lawsuits and liability for developers. This has discouraged construction of needed new housing units. Last year, a coalition made up of the business community, Colorado Municipal League, and affordable housing advocates attempted to move forward legislation to ease the liability born by developers. That legislation was unsuccessful in 2014 and in 2015. Following are key elements of this ordinance: • The article applies only to new multi -family construction commenced after the effective date of the ordinance. Definitions: builder and homeowner are all defined as provided in the Lakewood ordinance, with the goal being to include within the definition of builder. persons and companies both constructing and designing housing units. Construction deject is defined as "...anv instance in which a structure or portion thereo/'does not conform in all material respects to the applicable section(O of the Building Code, or does not conform to tire marurjacturer's specireations i0bose specifications are more strict than the applicable provisions of the Building Code. and the erfecl of which is to materially loiter the value of the structure or pose a safety risk to its occupants. " • A claimant/homeowner must, after discovering an alleged construction defect, notify the builder. • The builder must, if requested, provide copies of plans, specifications, maintenance and warranty information. • The builder may inspect the property and has a right to repair the defect. • If the builder fails to acknowledge receipt of the notice, provide the information requested or make the repair, the homeowner is released from the requirements of the ordinance and may file an action in the District Court against the builder. • All repair work must be warranted for a period of two years. • Any amendment to remove from the declaration or rule or regulation of a conunon interest community (typically for condominium projects) the requirement that construction defect claims be submitted to mediation is not effective with respect to any construction defect that predates that removal. • The ordinance requires homeowners to be kept informed by the board of the HOA when it considers filing litigation asserting a construction defect. That notice must include detailed information, including the nature of the relief sought, the expenses and fees which will be incurred for prosecuting the action, the cost of Council Action Form - Construction Defects August 24, 2105 Page 3 repairing the defect and the impact upon the marketability of units that are not subject to the action, including the ability of the owners to refinance the property. • The HOA board may not commence the action unless it obtains the written consent of a majority of the homeowners with voting rights. • The ordinance also requires a plat note on new subdivision plats for multi -family housing that supports mediation and arbitration of construction defect claims. RECOMMENDATIONS: Planning Commission recommended approval "Ith the following changes: • Restrict the scope of the ordinance only to condominium and co-op projects • Eliminate the warranty or repair obligation of architects and designers RECOMMENDED MOTION: "I move to approve Council Bill No. 18-2015, an ordinance adding a new Article X111 to Chapter 26 of the Wheat Ridge Code of Laws concerning repair of construction defects, on second reading, and that it take effect upon approval of second reading." 23 1 move to postpone indefinitely Council Bill No. 18-2015, an ordinance adding a new 'Article X111 to Chapter 26 of the Wheat Ridge Code of Laws concerning repair of construction defects, for the following reason(s) %I REPORT PREPARED BY: Gerald Dahl, City Attorney Patrick Goff. City Manager ATTACHMENTS: 1. Council Bill No. 18-2015 2. Planning Commission Minutes of July 16, 2015 3. DRAFT Planning Commission Minutes of August 6, 2015 CITY OF WHEAT RIDGE, COLORADO INTRODUCED BY COUNCIL MEMBER STARKER COUNCIL BILL NO. 18 ORDINANCE NO. Series 2015 TITLE: AN ORDINANCE ADDING A NEW ARTICLE XIII TO CHAPTER 26 OF THE WHEAT RIDGE CODE OF LAWS CONCERNING REPAIR OF CONSTRUCTION DEFECTS WHEREAS, the City of Wheat Ridge is a home rule municipality having all powers conferred by Article XX of the Colorado Constitution; and WHEREAS, land use, planning and general business regulation are well established as matters of purely local concern, and therefore subject to regulation by home rule cities; and WHEREAS, the City's zoning ordinance and Comprehensive Plan both contemplate a diverse housing stock, consisting of a mix of single-family and multifamily developments, and both owned and rented units, designed to serve the needs of all Wheat Ridge residents; and WHEREAS, the introduction of electric commuter rail service via the Gold Rail Line has intensified the need for owner -occupied units, particularly in transit -oriented zones around transit rail stations; and WHEREAS, despite a genuine demand for such housing options, statistics show that almost no owner -occupied multi -family developments, or condominiums, are being developed in and around Wheat Ridge; and WHEREAS, the City Council finds that the scarcity of condominiums available for sale in Wheat Ridge is the result of a litigation climate that puts builders and developers at risk of substantial judgments, often including punitive damages, for alleged construction defects; and WHEREAS, the City Council finds that risk of exposure to large damage awards has led insurance companies who would normally insure development projects to stop writing policies for owner -occupied multi -family projects; and WHEREAS, the City Council finds that the health, safety and welfare of Wheat Ridge residents is being negatively impacted by the lack of housing options; and WHEREAS, the City Council further finds that while the scarcity of new condominium projects is not unique to the City of Wheat Ridge, the City nevertheless experiences some unique impacts because of its proximity to the electric commuter rail line and the aging of its population, among other factors; and WHEREAS, the City Council finds there in a need for affordable housing in proximity to transit stations; and Attachment 1 WHEREAS, the lack of such affordable housing is related, in part, to the cost of construction insurance: and WHEREAS, the City Council therefore desires to take reasonable steps within its power as a home rule city to encourage the development of owner -occupied multi -family residential projects through the adoption of regulations designed to reduce the risk and exposure to builders and developers of such projects, while still protecting home- owners' ability to obtain corrective action for legitimate construction defect claims. NOW THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF WHEAT RIDGE, COLORADO: Section 1. Chapter 26 of the Code of Laws is amended to add a new Article 13 to read as follows: ARTICLE 13 REPAIR OF CONSTRUCTION DEFECTS 26-1301 Purposes and Applicability. A. The purposes of this Article are to: 1. Encourage the construction of high quality owner -occupied multi -family developments in Wheat Ridge; 2. Facilitate the implementation of the Wheat Ridge Comprehensive Plan and zoning ordinance, both of which contemplate owner -occupied multi -family developments in transit -oriented areas and throughout the city; 3 Reassure homeowners that most, if not all, construction defects will be promptly investigated and repaired by builders: 4. Motivate all parties to resolve disputes involving construction defects quickly and without the need for expensive and time-consuming litigation; and provide homeowners in communities with homeowners associations with an enhanced opportunity to participate in the governance of their community by empowering individual owners to give or withhold their informed consent with respect to actions the board of the homeowners association may desire to pursue regarding construction defects. B Applicability. This Article shall apply only to new construction commenced after August 24, 2015. 26-1302 Definitions. Association means a homeowners association governing certain owners' rights and responsibilities in an attached multi -family dwelling, a common interest community, a condominium or other multi -family development. Builder means any entity or individual, including but not limited to a builder. developer, general contractor, contractor, subcontractor, architect, engineer or original seller who performs or furnishes the design, supervision. inspection. construction or observation of any improvement to real property that is intended to be occupied as a dwelling or to provide access or amenities to such an improvement. Building Code means the current version of the International Building Code, as adopted by the city. Construction Defect means any instance in which a structure or portion thereof does not conform in all material respects to the applicable section(s) of the Building Code, or does not conform to the manufacturer's specifications if those specifications are more strict than the applicable provisions of the Building Code, and the effect of which is to materially lower the value of the structure or pose a safety risk to its occupants. Declarant shall have the meaning set forth in C.R.S. § 38-33.3-103(12). Homeowner means any person who owns a unit in an attached multi family dwelling. a common interest community, a condominium or other multifamily development, but shall not include any declarant or any person having an interest in a unit solely as security for an obligation. Declarant shall have the meaning set forth in C.R.S. § 38-33.3-103(12). 26-1303 Potential Claimants Original buyers or subsequent owners of a unit in an attached multi -family dwelling, a common interest community, a condominium or other multifamily development, or the governing homeowners association thereof, may assert the rights of a claimant under this Article by sending notice of a construction defect, provided the notice is sent within the applicable time period. 26-1304 Potential Respondents Any person or entity within the definition of a "Builder" as defined in Section 26-1302 of this Article is subject to the requirements of this Article. 26-1305 Claimant's Notice to Builder of Construction Defects; Builder's Acknowledgement; Inspection A. Claimant's notice. Upon the discovery of any alleged construction defect, a claimant must provide written notice via certified mail or personal delivery to the party alleged to have caused or contributed to the defect, in the manner prescribed in this section, of the claimant's claim that one or more construction defects exists in his/her residence or, with respect to any homeowners association, that one or more construction defects exists in any residence or in any common areas or facilities. The notice must: 1. Provide the claimant's name, address and preferred method of contact; 2. Provide the name and address of the claimant's attorney, if any; 3. State that the claimant alleges a construction defect pursuant to this Article against the builder; and 4. Describe the claim in reasonable detail sufficient to determine the nature and location of the alleged Construction Defects. B. Builder's Responsibilities. After receiving notice of a potential construction defect claim, a Builder must do each of the following: 1. Acknowledge claim in writing. a. A builder who receives a notice under this Article shall acknowledge receipt of the notice, in writing, within 14 days after receipt The acknowledgement shall be sent to the claimant and to any attorney the builder knows to be representing the claimant in connection with the notice. If the builder has retained legal counsel, said counsel shall thereafter communicate with the claimant's legal representative, if any. b If the builder fails to acknowledge receipt of a notice within the time specified, this Article shall not apply and the claimant shall be released from the requirements of this Article and may proceed with the filing of an action against the builder. 2. Maintain an agent for notice with the Colorado Secretary of State if required by the form of the builder's corporate or business structure, and if not, otherwise provide an address and contact person for notices under this Article; and 3. If specifically asked to do so by the claimant and within 30 days of such a request, provide the claimant or his/her legal representative with; a. copies of all relevant plans, specifications, grading plans, soils reports and available engineering calculations pertaining to the claimant's residence; b. all maintenance and preventative maintenance recommendations pertaining to the claimant's residence: and c. limited contractual warranty information. 4. A builder responding to a claimant's request for documents may charge reasonable copying costs and may require the copies of the documents to be made at the builder's location. 5. Builder's election to inspect property. In addition to the requirements set forth in this Section, if the builder elects to inspect the claimed construction defect, the builder shall complete the initial inspection and testing, if any, within 30 days after the builder acknowledged receipt of the notice, and at a mutually agreeable date and time. The builder shall bear all costs of inspection and testing, including any damage caused by the inspection and testing. Before entering onto the premises for the inspection, the builder shall supply the claimant with proof of liability insurance coverage. The builder shall, upon request, allow the inspection to be observed and recorded or photographed. Nothing that occurs during a builder's inspection may be used or introduced as evidence to support a defense of spoliation of evidence by any potential party in subsequent litigation. 4 6. A builder who fails to comply with any of the foregoing requirements within the time specified is not entitled to the protection of this Article, and the homeowner is released from the requirements of this Article and may proceed with the filing of an action. 7. If a notice is sent to the builder in accordance with this section within the time prescribed for the filing of an action under any applicable statute of limitations or repose, then the statute of limitations or repose is tolled until sixty days after the completion of the notice process described in section 26-1305. If the builder elects to repair pursuant to 26-1306, then the statute of limitations or repose is tolled until sixty days after the completion of repairs. The tolling imposed by this section shall be limited only to the construction defect described in the notice. 26-1306 Builder's Right to Repair A. Within thirty (30) days of the initial inspection or testing, the builder may elect to repair the construction defect. If the builder elects to repair the construction defect, it has the right to do so and the claimant may not, directly or indirectly, impair, impede or prohibit the builder from making repairs. Any notice to repair shall offer to compensate the claimant for all applicable damages within the timeframe set for repair. Any notice of repair shall be accompanied by a detailed, step-by-step explanation of the particular defect being repaired and setting forth a reasonable completion date for the repair work. The notice shall also include the contact information for any contractors the builder intends to employ for the repairs. B. Claimant shall promptly cooperate with builder to schedule repair work by builder. C. Within ten (10) days after receipt of the builder's notice to repair, a claimant may deliver to the builder a written objection to the proposed repair if the claimant believes in good faith that the proposed repair will not remedy the alleged defect. The builder may elect to modify the proposal in accordance with the claimant's objection, or may proceed with the scope of work set forth in the original proposal. D. Builder's failure to comply. If the builder fails to send a notice to repair or otherwise strictly comply with this Article within the specified time frames, or if the builder does not complete the repair within the time set forth in the notice to repair, the claimant shall be released from the requirements of this Article and may proceed with the filing of an action against the builder. Notwithstanding the foregoing, if the builder notifies the claimant in writing at least 5 days before the stated completion date that the repair work will not be completed by the completion date, the builder shall be entitled to one reasonable extension of the completion date, not to exceed 30 days. E. Completion of repairs. The builder shall notify the claimant when repairs have been completed. The claimant shall have ten days following the completion date to have the premises inspected to verify that the repairs are complete and satisfactorily resolved the alleged defects. An association claimant who believes in good faith that the repairs made do not resolve the defects may proceed with the notice required by section 26-1310. Any other claimant may then elect to file an action under C.R.S. § 13-20-803.5 or any other applicable statute or court rule. 26-1307 Warranty of Repairs The repair work performed by the builder shall be warranted against material defects in design or construction for a period of 2 years, which warranty shall be in addition to any express warranties on the original work. This section shall not apply to the extent any architect or designer is not permitted by law to warranty such work. 26-1308 Subsequently Discovered Defects Any alleged construction defect discovered after repairs have been completed shall be subject to the same requirements of this Article if the builder did not have notice or an opportunity to repair the particular defect. 26-1309 Alternative Dispute Resolution Provisions Nothing in this Article shall preclude the claimant and builder from reaching a mutual agreement regarding alternative dispute resolutions. If a provision found in the declaration. bylaws or rules and regulations of a condominium development or common interest community requires that construction defect claims be submitted to mediation or arbitration, that requirement constitutes a commitment on the part of the unit owners and the association upon which a developer, contractor, architect, builder or other person involved in the construction of the community is entitled to rely. Consequently, a subsequent amendment to the declaration, bylaws or rules and regulations that removes or amends the mediation or arbitration requirement shall not be effective with regard to any construction defect claim that is based on an alleged act or omission that predates that amendment. 26-1310 Association Obligation to Inform Homeowners. Homeowners are entitled to be kept informed by boards of homeowners associations of the board's consideration of actions regarding construction defects and to have meaningful input and a right to make a considered judgment and give (or withhold) consent to institute an action asserting one or more construction defects. The association board must do each of the following: A. At least sixty (60) days before filing any action under C.R.S. § 13-20-803.5, or on any other statute or court rule, an association claimant must mail or deliver written notice to each homeowner at the homeowner's last known address. B. The notice must be signed by a person other than, and not employed or otherwise affiliated with, the attorney or law firm that represents or will represent the association in the construction defects claim. C. The notice required by this section must contain the following information: 1. The nature of the action and the relief sought; 2. The amount of expenses and fees the board anticipates will be incurred. directly or indirectly, in prosecuting the action, including attorney fees, consultant fees, expert witness fees and court costs, whether incurred by the association directly or for which it may be liable if it is not the prevailing party or if it does not proceed with the action; 0 3. The estimated cost of repairing the defect, or if the defect is not repaired, the estimated reduction in value of the unit; 4. The estimated impact on the marketability of units that are not the subject of the action, including any impact on the ability of the owners to refinance their property during and after the action; 5. The manner in which the association proposes to fund the cost of the action, including any proposed special assessments or the use of any revenues; 6. The anticipated duration of the action and the likelihood of success; 7. Whether the builder has offered to make any repairs and, if so, whether the builder has made repairs; and 8. The steps taken by the builder, if any, in accordance with this Article to address the alleged defect, including any acknowledgement, inspection, election to repair or repairs. D. The association claimant may not commence the action unless the board obtains the written consent of homeowners holding at least a majority of the total voting rights in the association after giving the notice required by this section In the event the association governs units in more than a single building, the written consent required by this section shall be a majority of the units with voting rights only in the building or buildings in which the construction defect is alleged to be present. Homeowners may vote either directly or through a proxy directed in writing by the homeowner and confirmed in writing by the proxy. Such consent must be obtained within 60 days after such notice is provided, otherwise the owners shall be deemed to have declined to provide their informed consent to such action. Section 2. The Code of Laws is amended by the addition of a new Section 26-420, to read Sec. 26-420. Plat note concerning multi -family development. A.Contents. Only at the specific written request of the applicant, a final plat containing lots, blocks, or other land intended for the development of owner - occupied multi -family dwelling units or associated common areas, limited common elements, or improvements within a common interest community (the "multi -family development area") will include the following plat note, applicable to the property within such multi -family development area and the improvements thereon. THIS PLAT CONTAINS LOTS, BLOCKS, OR OHER LAND INTENDED FOR THE DEVELOPMENT OF OWNER -OCCUPIED MULTI -FAMILY DWELLING UNITS OR ASSOCIATED COMMON AREAS, LIMITED COMMON ELEMENTS. OR IMPROVEMENTS (THE "MULTI -FAMILY DEVELOPMENT AREA") TO THE EXTENT THAT THE FOLLOWING CLAIMS INVOLVE ANY MULTI -FAMILY DEVELOPMENT AREA (OR THE IMPROVEMENTS THEREON) WITHIN THE PROPERTY COVERED BY THIS PLAT, SUCH CLAIMS SHALL BE SUBMITTED TO BINDING ARBITRATION IN LIEU OF SUBMITTING ANY SUCH CLAIM TO A COURT OF LAW. ANY AND ALL CLAIMS THAT ALLEGE A CONSTRUCTION DEFECT AS DEFINED AT SECTION 26-1302 OF THE CODE OF LAWS AND: (1) ARE BETWEEN ANY TWO OR MORE OF THE FOLLOWING PERSONS OR ENTITIES: (A) ANY OWNER OF ANY PORTION OF THE MULTI -FAMILY DEVELOMENT AREA, (B) ANY COMMON INTEREST COMMUNITY ASSOCIATION CREATED WITH RESPECT TO THE MULTI -FAMILY DEVELOPMENT AREA. (C) THE SUBDIVIDER, DEVELOPER. CONTRACTOR. OR ANYONE CLAIMING UNDER OR THROUGH ANY SUCH PERSONS, (D) ANY PARTY THAT CONSTRUCTS OR DESIGNS ANY PROTION OF ANY RESIDENTIAL DWELLING UNITS UPON THE MULTI -FAMILY DEVELOPMENT AREA, AND (E) ANY CONSTRUCTION PROFESSIONAL AS DEFINED IN THE CONSTRUCTION DEFECT ACTION REFORM ACT, C.R.S. 13-80-802.5, ET SEQ. AS AMENDED ("CDARA"): AND (2) THAT PERTAINS TO ANY OF: (A) THE MULTI -FAMILY DEVELOPMENT AREA, (B) ANY DWELLING UNIT, COMMON AREA DEVELOPMENT STRUCTURE, LIMITED COMMON ELEMENTS, OR OTHER IMPROVEMENTS CONSTRUCTED ON THE MULTI -FAMILY DEVELOPMENT AREA. (C) THE COMMON INTEREST COMMUNITY TO BE CREATED FOR THE MULTI -FAMILY DEVELOPMENT AREA OR ANY PORTION THEREOF, OR (D) THE DECLARATION OR OTHER DOCUMENTS GOVERNING SUCH COMMUNITY. THE FOREGOING SHALL NOT PRECLUDE ANY OF THE PERSONS OR ENTITIES DESCRIBED ABOVE FROM ENDEAVORING TO RESOLVE ANY SUCH CLAIM(S) THROUGH EITHER NEGOTIATION OR MEDIATION BEFORE SUBMITTING SUCH CLAIM(S) TO BINDING ARBITRATION. ADDITIONALLY, THE MULTI -FAMILY DEVELOPMENT AREA MAY ALSO BE SUBJECT TO A DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS THAT MAY IMPLEMENT AND EXPAND UPON THE REQUIREMENTS OF THIS PLAT NOTE AND THAT MAY EXEMPT CERATIN CLAIMS FROM THE REQUIREMENT THAT SUCH CLAIMS MUST BE SUBMITTED TO BINDING ARBITRATION, PROVIDED, HOWEVER, THAT ANY SUBSEQUENT AMENDMENT OR CHANGE TO SUCH DECLARATION OF COVENANTS. CONDITIONS OR RESTRICTIONS SHALL NOT ELIMINATE THIS REQUIREMENT THAT CONSTRUCTION DEFECT CLAIMS SHALL BE SUBMITTED TO BIDING ARBITRATION IN LIEU OF SUBMITTING ANY SUCH CLAIM TO A COURT OF LAW- FOR PURPOSES OF THIS PLAT NOTE, BINDING ARBITRATION SHALL MEAN SUBMISSION OF ANY CLAIM DESCRIBED ABOVE TO THE ARBITARTION SERVICE PROVIDER SPECIFIED IN THE DECLARATION OR OTHER GOVERNING DOCUMENTS OF THE COMMON INTEREST COMMUNITY, IF QUALIFIED PURSUANT TO THE UNIFORM ARBITRATION ACT. PART 2 OF ARTICLE 22 OF TITLE 13, C.R.S, AND, IF NOT, AN ARBITRATION SERVICE PROVIDER SO QUALIFIED IN SUCH ARBITRATION; THE COSTS AND EXPENSES OF ARBITRATION TO BE BORNE EQUALLY BY THE PARTIES ALL FUTURE PURCHASERS OF ANY INTEREST IN THE MULTI -FAMILY DEVELOPMENT AREA ARE DEEMED TO HAVE ACCEPTED AND AGREED TO THE TERMS AND CONDITIONS OF THIS PLAT NOTE AND SHALL BE BOUND BY THE PLAT NOTE, WHICH IS RECORDED IN THE JEFFERSON COUNTY CLERK AND RECORDER'S OFFICE, DEEMED TO BE A COVENANT RUNNING WITH THE MULTI -FAMILY DEVLEOPMENT AREA, AND BINDING UPON ALL SUCCESSORS IN INTEREST, GRANTEES, OWNERS, HEIRS. ASSIGNS, AND ALL OTEHRS WHO ACQUIRE AN INTEREST IN OR TO THE MULTI -FAMILY DEVELOPMENT AREA, TOGETHER WITH ANY COMMON INTERST COMMUNITY ASSOCIATION ASSOCIATED THEREWITH. B. Disclosure. If a plat, pursuant to subparagraph a above, contains the plat note described herein, then the developer, builder, or other person or entity engaged in the initial sale of a lot or dwelling unit within the multi -family development Area of such plat to the intended resident or end user shall be required to include in such contract for purchase and sale a disclosure statement in bold-faced type that is clearly legible and in substantially the following form: THE RECORDED PLAT OF THE PROPERTY WITHIN WHICH THIS LOT OR UNIT IS SITUATED CONTAINS A RESTRICTION REQUIRING MANDATORY, BINDING ARBITRATION FOR CERTAIN TYPES OF CLAIMS, IN LIEU OF SEEKING REDRESS IN A COURT OF LAW, PURCHASERS SHOULD CAREFULLY READ THE PLAT NOTE CONCERNING ARBITRATION, AS THEY ARE DEEMED TO HAVE ACCEPTED AND AGREED TO THE TERMS AND CONDITIONS OF SUCH PLAT NOTE. C. Applicability. A request for plat note, as provided for in this section, shall be permitted only as to a final plat concerning land for which an application is filed after August 24, 2015. Section 4. Severability Conflicting Ordinances Repealed. If any section, subsection or clause of this Ordinance shall be deemed to be unconstitutional or 9 otherwise invalid, the validity of the remaining sections, subsections and clauses shall not be affected thereby. All other ordinances or parts of ordinances in conflict with the provisions of this Ordinance are hereby repealed. Section 5. Effective Date. This Ordinance shall take effect upon approval on second reading as permitted by Section 5.11 of the Charter. INTRODUCED, READ, AND ADOPTED on first reading by a vote of 8 to 0 on this 27th day of July, 2015, ordered published in full in a newspaper of general circulation in the City of Wheat Ridge, and Public Hearing and consideration on final passage set for August 24. 2015 at 7:00 p.m., in the Council Chambers, 7500 West 291" Avenue, Wheat Ridge, Colorado. READ, ADOPTED AND ORDERED PUBLISHED on second and final reading by a vote of to __ . this day of — 2015. SIGNED by the Mayor on this day of ATTEST: Janelle Shaver, City Clerk First Publication: July 30, 2015 Second Publication: Wheat Ridge Transcript Effective Date: 2015. Joyce Jay. Mayor Approved as to Form Gerald E. Dahl, City Attorney Published: Wheat Ridge Transcript and www.ci.wheatridge.co.us City Council Minutes August 24, 2015 Page 3 City Attorney asked Council to take a motion to add an executive session at the conclusion of the meeting for receiving legal advice concerning the property at 4505 Yarrow Street. Motion by Councilmember Starker to go into Executive Session for a conference with the City Attorney, City Manager, and appropriate staff under Charter Section 5.7(b)(1) and CRS 24-6-402(4)(b) for the purpose of receiving legal advice concerning the property located at 4505 Yarrow Street, and further to adjourn the Council meeting at the conclusion of the executive session; seconded by Councilmember Langworthy; carried 8-0. PUBLIC HEARINGS AND ORDINANCES ON SECOND READING 1. Council Bill 18-2015 — an ordinance adding a new Article XIII Chapter 26 to the Wheat Ridge Code of Laws concerning repair of Construction Defects Councilmember Starker introduced Council Bill 18-2015. There exists a climate of litigation that puts builders and developers at risk of substantial judgments, often including punitive damages, for alleged construction defects. Restrictive state laws have discouraged construction of new multi -family housing units. This ordinance will amend the Code to give builders the opportunity to correct construction defects before suit is brought. Clerk Shaver assigned Ordinance 1580. Jerry Dahl gave a short staff presentation. This has been discussed twice at study sessions. The Planning Commission reviewed the ordinance and recommends approval with the following changes: 1) Restrict the scope of the ordinance only to condominium and co-op projects. 2) Eliminate the warranty or repair obligation of architects and designers 3) That the actual text of the definition of "Declarant' be included, not merely referenced. (This was inadvertently left out of the staff report.) Council discussion centered primarily on the following topics: The level at which engineers and architects are still liable • The term "co-op" • If townhouses should be included There was no public comment. Mayor Jay closed the public hearing. Motion by Councilmember Starker to approve Council Bill No. 18-2015 - an ordinance adding a new Article XIII Chapter 26 to the Wheat Ridge Code of Laws concerning repair of construction defects on second reading, and that it take effect upon approval of second reading, with the following modifications: 1) That the second sentence of Sec. 26-1307 be deleted. City Council Minutes August 24, 2015 Page 4 2) That the definition of "Declarant" set forth in CRS 38- 33.3-103(12), that is found in Sec -26-1303 "definitions", be set forth in full. seconded by Councilmember Urban: carried 8-0. ORDINANCES ON FIRST READING 2 Council Bill 20-2015 - an ordinance approving a Zone change from Industrial - Employment (I -E) Commercial -One (C-1) and Agricultural -One (A-1) to Industrial - Employment (I -E) for property located at 4901 Marshall St. Councilmember Urban introduced Council Bill 20-2015. This is the first step of the process for redevelopment of this site. If approved, all further review of site plans will be administrative, with no additional public hearings required. Motion by Councilmember Urban to approve Council Bill 20-2015, an ordinance approving a Zone change from Industrial -Employment (I -E) Commercial -One (C-1) and Agricultural -One (A-1) to Industrial -Employment (I -E) for property located at 4901 Marshall St. on first reading, order it published, public hearing set for Monday, September 28. 2015, at 7 p.m. in City Council Chambers, and that it take effect 15 days after final publication; seconded by Councilmember DiTullio ; carried 8-0 DECISIONS, RESOLUTIONS AND MOTIONS 3. Motion to accept the 2014 Comprehensive Annual Financial Report (CAFR) from Swanhorst & Company, LLC Councilmember Langworthy introduced Item 3. Wendy Swanhorst, of Swanhorst and Company, was present to address the financial report and the management letter. An unqualified or clean opinion was given - meaning the numbers are clearly stated in all respects. Nothing significant was identified, but there are a few recommendations for internal controls. There is an issue when budget amendments are made -- the expenditures are being increased but the revenues are not. They recommend supplemental budget requests include a corresponding increase in revenue if fund balances were not adequate to cover the expenditures. Urban Renewal's budget was also over significantly due to a misunderstanding about accounting vs budgeting Mr. Goff indicated staff is aware of this and will keep a better eye on it. B. Case No. ZOA-15-03: City Attorney Dahl explained that at the request of Council he has drafted a construction defects ordinance. It affects Chapter 26 of the Code and the Planning Commission needs to make a recommendation to Council. There is the perception that there is not enough multifamily construction going on in Wheat Ridge currently. There are concerns in the legislature about construction defect claims brought by residents against builders. This proposed ordinance gives the builder the right to know when there is an issue and to repair it. Then the homeowner can take the issue to court. Many communities have enacted ordinances like this since the legislature has failed to enact one. This ordinance addresses the right to repair and the required plat notes on multifamily housing projects. City Council wants this ordinance to remove obstacles to multifamily construction in the City. Commissioner TIMMS asked if this ordinance would apply to multifamily rental apartments. Mr. Dahl responded that it would, but not for the tenants— just for the owners. Commissioner OHM stated this was an issue for him and wondered whether the statute of limitations would be 8 years on a project. If so, then would this add another 2 years to the statute of limitations. He thinks that the definition of"builder" is too broad. Asa designer, the way this ordinance is written would open him up to liability that should be assumed by the actual builder. The intent is good, but there needs to be more specifics in the descriptions. Commissioner BUCKNAM stated the 2 year warranty for repairs concerns him because the definition of "builder" is too broad. Mr. Dahl responded that the 2 year warranty is built into many other ordinances from other communities. Also, a 2 year warranty is common for other projects done by the City. He indicated that he will check to see if the 2 year warranty is in the proposed state statutes. Commissioner BUCKNAM asked about the time frame for the notice period and remediation during the notice process. Mr. Dahl explained this ordinance just delays the homeowner from going to court. They can still go, but hopefully, the builder will fix the problem and court proceedings will not be necessary. Commissioner BUCKNAM opened the public hearing. Nancy Snow 11 155 W 401' Avenue, Wheat Ridge - She stated when she worked with the Colorado Civil Rights Commission there were lots of cases where builders did not design/build correctly and there were problems for the residents getting resolution. It Planning Commission Minutes —7— July 7_July 16, 2015 bothers her that the City is making efforts to protect builders and had builders help write the ordinance. The State of Colorado has tried and failed to pass legislation like this twice. Where are the people that opposed this at state level? Were they not invited to give their input on this? She believes that this ordinance is written to protect the builders. Planning Commission and City Council should be protecting homeowners instead, not developers. She also does not agree with the condition in the proposed ordinance that "a majority of homeowners" must agree for Home Owners' Associations to take action. Many builders keep units back instead of selling them and this might skew votes in their favor. Why should Wheat Ridge stick their necks out by enacting this law? If it were to be enacted then homeowners could come after the city. This issue should be left at the state level. Mr. Dahl explained that the clause requiring HOA's to get consent by majority vote is normal for legislation. It isn't as easy to get signatures, but a majority vote is normal. He indicated that the State Senate bill is silent on the 2 year warranty. He also stated that not this entire ordinance benefits builders as the warranty requirement favors homeowners. Commissioner DORSEY said that he thinks the definition of"multifamily" is too broad. The ordinance does not include apartment renters and that maybe the ordinance should apply to condos and townhomes as well. Chair BUCKNAM closed the public hearing. Commissioner OHM stated from a professional liability standpoint, work on condominiums doubles the liability for builders and designers. He isn't opposed to the 2 year warranty, but feels the Commission needs to continue the discussion on this ordinance. It was moved by Commissioner OHM and seconded by Commissioner DORSEY to continue Case No. ZOA-15-03, an ordinance adding Article XIII to Chapter 26 of the Wheat Ridge Code of Laws, Concerning Repair of Construction Defects, until the next planning commission meeting on August 6tn. Commissioner TIMMS asked if the Commission was working under any time schedule with City Council. Mr. Dahl responded that there were no real schedule constraints. He has made detailed notes of the Commission's comments and suggestions and research and revise the ordinance accordingly. Motion to continue was approved 7-0 Planning Commission Minutes —8— July 8— July 16, 2015 B. Case No. ZOA-15-03: City Attorney Dahl addressed the Commission and explained he has made some revisions to the proposed ordinance and some things were not changed at City Council's request. Council has approved this ordinance on first reading and will review it on second reading at the August 24`h meeting and public hearing. This type of ordinance has been enacted in several other communities in this area. among them Lone Tree, Littleton, Arvada, and Lakewood. The proposed ordinance is substantially similar to the Lakewood ordinance. The ordinance applies to condos, co-ops, and owner -occupied multifamily construction commenced after the effective date of the ordinance. It would not apply to tenants in rental units. The definition of "builder" in the ord and designers as well as the actual bu definition and confine it to builders. and safety hazards as builders' errors, broad as it applies to architects in decide to change the can cause just as many defects Commissioner DORSEY asked if limiting the definition of "defect" to safety hazards makes the City more vulnerable to liability claims. lie is concerned about recent news stories about balcony and deck collapses and doesn't want Wheat Ridge to be held liable for poor construction or design. Mr. Dahl said the City would not be vulnerable to more liability. Case law supports that builders and designers have to follow building code. It's not the City's fault if the code isn't followed. There was a recent trend for tort cases against cities for things like this, but case law doesn't support them. Commissioner KIMSEY stated she was struggling with the requirement in the ordinance for members of a Homeowners' Association to obtain the consent of the majority of homeowners in the association before proceeding. What if only a few homeowners have defects - how do you get the rest to participate ? Will the covenants in new construction contain this 50% requirement? Mr. Dahl explained that this was an issue with this type of ordinance. It sets a very high standard that could be a difficult hurdle to cross. This hurdle is somewhat intentional. Many covenants are stricter, however and often require a 2/3 vote of the HOA members to amend. The ordinance requires a plat note on any plans for new multi -family construction to alert people buying units about the 50% requirement. The ordinance goes even further and, on the last page, it states the developer is required to provide a disclosure statement to buyers regarding this requirement. Commissioner KIMSEY stated she still doesn't like the 50% requirement. Can an individual owner still bring suit? Planning Commission Minutes -4— August 4_August 6, 2015 Mr. Dahl said individual owners can sue their builder or developer unless the covenants restrict this. Commissioner OHM stated he had compared new doc to original and found a few changes. What is the statute referenced on page 3? Mr. Dahl replied this was the `covenant statute," C.R.S. § 38-33.3-103(12). Basically, the developer, as the original purchaser of the property can place original covenants on property. These covenants can be difficult for homeowners to change later on. Commissioner OHM stated he has issues with some of the warranty provisions on page 6 of the ordinance. Attorneys that work for insurance companies prevent him as designer to warranty work and this causes conflict. He feels it would -have been helpful if referrals had been sent out to design, engineer, and architectural organizations to get their feedback on the proposed ordinance. He stated he also found 4 spelling errors in the ordinance. Mr. Dahl asked Commissioner Ohm to send him an email regarding the typos. Also, he stated that Section 26-1307 of the ordinance exempts architects and designers from further warranty requirements#the law does not permit them to provide an additional warranty on repairs. Commissioner BUCKNAM pointed out that some professional organizations forbid warrantying repair work. etc. It is not necessarily the statute that restricts the warranty. Commissioner KIMSEY asked when the 2 year warranty on repairs starts. Mr. Dahl stated the 2 year xN arranty would start from completion of repair work. Commissioner KIMSEY asked if Mr. Dahl could spell this out in the ordinance more clearly. Commissioner OHM st " professional designers cannot perform repairs — only a builder can rm rep He has trouble with the "builder" definition encompassing designers and a well. Mr. Dahl stated that is worthwhile to speak to repairs and the work alleged to be defective. If there is a design problem — part of the repair could be additional design. The designer should have the opportunity to correct failures as well as builders. This can protect them as well and allow them to fix problem before being sued. Perhaps some more clarification on this point is warranted. Commissioner BUCKNAM pointed out that the word "repairs" could mean remedies or revisions as well. The intent is not to keep architects and designers from being held liable. The definition of "repair" should be clarified. Planning Commission Minutes -5— August 5—August 6, 2015 Mr. Dahl explained the intent of the ordinance is not to force designers and builders to perform more work. It just allows them to remedy problems before a lawsuit is brought against them. They have the option to decline to fix the problem and the homeowner can go ahead and bring suit. This is what happens now and builders and designers have no opportunity to fix any problems. Chair BUCKNAM opened the Public Hearing. No one carne forward to speak Chair BUCKNAM closed the Public Hearing. It was moved by Commissioner OHM and seconded by Commissioner DORSEY to recommend approval of Case No. ZOA-15-03, an ordinance adding Article XIII to Chapter 26 of the Wheat Ridge Code of Laws, concerning repair of construction defects, with the following condition: 1. The section on warranty repairs to be reworded so as not to apply to architects or designers. Motion was approved; Carried 5-0 z Planning Commission Minutes -6— August 6August 6, 2015 City of W heat }�idge ITEM NO: DATE: July 27 2015 REQUEST FOR CITY COUNCIL ACTION 4 TITLE: COUNCIL BILL NO. 18-2015 - AN ORDINANCE ADDING A NEW ARTICLE XIII TO THE WHEAT RIDGE CODE OF LAWS CONCERNING REPAIR OF CONSTRUCTION DEFECTS ❑ PUBLIC HEARING ® ORDINANCES FOR 1sT READING (07/27/15) ❑ BIDS/MOTIONS ❑ ORDINANCES FOR 2ND READING (08/24/15) ❑ RESOLUTIONS QUASI-JUDICIAL: ❑ YES ® NO i City Attorney City Manager ISSUE: The City Council finds there is a need for affordable housing generally, and in particular, in proximity to new transit stations being developed within the City. The lack of such affordable housing is related, in part, to the cost of construction insurance:. Other Colorado municipalities have recently adopted construction defect legislation, including Lakewood, Arvada, Lonc Tree and Littleton. Amending the Code gives builders the opportunity to correct construction defects before suit is brought. PRIOR ACTION: Council reviewed the issue at study sessions on May 5'h and May 18'h and directed the City Attorney to draft this ordinance. FINANCIAL IMPACT: None BACKGROUND: Despite a genuine demand for housing options, statistics show that almost no owner -occupied. multi -family developments, or condominiums, are being developed in and around Wheat Ridge. The general consensus is that the scarcity of condominiums available for sale in Wheat Ridge is Council Action Form - Construction Defects July 27, 2105 Page 2 the result of a litigation climate that puts builders and developers at risk of substantial judgments, often including punitive damages, for alleged construction defects. Colorado's restrictive laws have greatly increased lawsuits and liability for developers. This has discouraged construction of needed new housing units. Last year, a coalition made up of the business community, Colorado Municipal League, and affordable housing advocates attempted to move forward legislation to ease the liability born by developers. That legislation was unsuccessful in 2014 and in 2015. Following are key elements of this ordinance: • The article applies only to new multi -family construction commenced after the effective date of the ordinance. • Definitions: builder and homeowner are all defined as provided in the Lakewood ordinance, with the goal being to include within the definition of builder: persons and companies both constructing and designing housing units. Construction defect is defined as "...anv instance in which a structure or portion thereof does not conform in all material respects to the applicable sections) of the Building Code, or does not conform to the manufacturer's specifications if those specifications are more strict than the applicable provisions of the Building Code, and the effect of which is to materially lower the value of the structure or pose a safety risk to its occupants. " • A claimant/homeowner must, after discovering an alleged construction defect, notify the builder. • The builder must, if requested, provide copies of plans, specifications, maintenance and warranty information. • The builder may inspect the property and has a right to repair the defect. • If the builder fails to acknowledge receipt of the notice, provide the information requested or make the repair, the homeowner is released from the requirements of the ordinance and may file an action in the District Court against the builder. • All repair work must be warranted for a period of two years. • Any amendment to remove from the declaration or rule or regulation of a common interest community (typically for condominium projects) the requirement that construction defect claims be submitted to mediation is not effective with respect to any construction defect that predates that removal. • The ordinance requires homeowners to be kept informed by the board of the HOA when it considers filing litigation asserting a construction defect. That notice must include detailed information, including the nature of the relief sought, the expenses and fees which will be incurred for prosecuting the action, the cost of Council Action Form — Construction Defects July 27, 2105 Page 3 repairing the defect and the impact upon the marketability of units that are not subject to the action, including the ability of the owners to refinance the property. • The HOA board may not commence the action unless it obtains the written consent of a majority of the homeowners with voting rights. • The ordinance also requires a plat note on new subdivision plats for multi -family housing that supports mediation and arbitration of construction defect claims. RECOMMENDATIONS: Staff and Planning Commission recommend approval of the attached ordinance to address the construction defect issue. RECOMMENDED MOTION: "I move to approve Council Bill No. 18-2015, an ordinance adding a new Article XIII to Chapter 26 of the Wheat Ridge Code of Laws concerning repair of construction defects, on first reading, order it published, public hearing set for Monday, August 24, 2015 at 7:00 p.m. in City Council Chambers, and that it take effect upon approval on second reading." 22 "I move to postpone indefinitely Council Bill No. 18-2015, an ordinance adding a new Article Xlll to Chapter 26 of the Wheat Ridge Code of Laws concerning repair of construction defects, for the following reason(s) " REPORT PREPARED BY: Gerald Dahl, City Attorney Patrick Goff, City Manager ATTACHMENTS: 1. Council Bill No. 18-2015 City or 6 Wheat ' idle PLANNING COMMISSION COMMUNITY DEVELOPMENT LEGISLATIVE ITEM STAFF REPORT MEETING DATE: July 16, 2015 TITLE: AN ORDINANCE ADDING ARTICLE XIII TO CHAPTER 26 OF THE WHEAT RIDGE CODE OF LAWS, CONCERNING REPAIR OF CONSTRUCTION DEFECTS CASE NO. ZOA-15-03 ® PUBLIC HEARING Case Manager: Gerald Dahl, City Attorney Date of Preparation: July 9, 2015 SUMMARY: ® CODE CHANGE ORDINANCE I'C The ordinance creates a new Article XIII in Chapter 26 of the Code of Laws, providing builders of multi -family developments with a right to repair defects before the owners may bring suit for damages. The ordinance was prepared by the City Attorney's Office. The amendment affects Chapter 26 of the Code of Laws. Because the Zoning and Development Code is proposed to be modified, the Planning Commission has jurisdiction to review the ordinance and provide a recommendation. Notice of this public hearing was provided as required by the Code of Laws. BACKGROUND: For the past few years, the home building industry has raised concerns with current Colorado construction defect laws. Colorado's restrictive laws have greatly increased lawsuits and liability for developers. This has discouraged construction of needed new housing units. Last year, a coalition made up of the business community, CML, and affordable housing advocates attempted to move forward legislation to ease the liability born by developers. That legislation was unsuccessful in 2014 and in 2015. Consensus was reached by City Council to direct the City Attorney to bring forward options for the Council to consider which address the issue of construction defects locally. This issue was discussed with Council at study sessions on May 5 and May 18, 2015. ZOA-15-03 / Construction Defects STATEMENT OF THE ISSUES: A few other communities have chosen to adopt construction defect legislation, including Lakewood, Arvada, Lone Tree and Littleton. The attached ordinance is substantially similar to the Lakewood ordinance and is summarized below. Key Elements of this Ordinance: • The article applies only to new multi -family construction commenced after the effective date of the ordinance. • The terms builder and homeowner are all defined as provided in the Lakewood ordinance, with the goal being to include within the definition of builder: persons and companies both constructing and designing housing units. The term construction defect is defined as it was in the Senate bill that was not adopted in 2015: "...any instance in which a structure or portion thereof does not conform in all material respects to the applicable section(s) of the Building Code, or does not conform to the manufacturer's specifications if those specifications are more strict than the applicable provisions of the Building Code, and the effect of which is to materially lower the value of the structure or pose a safety risk to its occupants. " • A claimant homeowner must, after discovering an alleged construction defect, notify the builder. • The builder must, if requested, provide copies of plans, specifications, maintenance and warranty information. • The builder may inspect the property and has a right to repair the defect. • If the builder fails to acknowledge receipt of the notice, provide the information requested or make the repair, the homeowner is released from the requirements of the ordinance and may file an action in the District Court against the builder. • All repair work must be warranted for a period of two years. • Any amendment to remove from the declaration or rule or regulation of a common interest community (typically for condominium projects) the requirement that construction defect claims be submitted to mediation, is not effective with respect to any construction defect that predates that removal. • The ordinance requires homeowners to be kept informed by the board of the HOA when it considers filing litigation asserting a construction defect. That notice must include detailed information, including the nature of the relief sought, the expenses and fees which will be incurred for prosecuting the action, the cost of repairing the defect and the impact upon the marketability of units that are not subject to the action, including the ability of the owners to refinance the property. ZOA-15-03 / Construction Defects • The HOA board may not commence the action unless it obtains the written consent of a majority of the homeowners with voting rights. RECOMMENDED MOTION: Staff recommends that Planning Commission adopt the following motion: "I move to recommend approval of the proposed ordinance adding a new Article XIII to Chapter 26 of the Code of Laws concerning repair of construction defects." Exhibits: 1. Proposed Ordinance ZOA-15-03 / Construction Defects CITY OF WHEAT RIDGE, COLORADO INTRODUCED BY COUNCIL MEMBER COUNCIL BILL NO. ORDINANCE NO. Series 2015 TITLE: AN ORDINANCE ADDING A NEW ARTICLE XIII TO CHAPTER 26 OF THE WHEAT RIDGE CODE OF LAWS CONCERNING REPAIR OF CONSTRUCTION DEFECTS WHEREAS, the City of Wheat Ridge is a home rule municipality having all powers conferred by Article XX of the Colorado Constitution; and WHEREAS, land use, planning and general business regulation are well established as matters of purely local concern, and therefore subject to regulation by home rule cities; and WHEREAS, the City's zoning ordinance and Comprehensive Plan both contemplate a diverse housing stock, consisting of a mix of single-family and multifamily developments, and both owned and rented units, designed to serve the needs of all Wheat Ridge residents; and WHEREAS, the introduction of electric commuter rail service via the Gold Rail Line has intensified the need for owner -occupied units, particularly in transit -oriented zones around transit rail stations; and WHEREAS, despite a genuine demand for such housing options, statistics show that almost no owner -occupied multi -family developments, or condominiums, are being developed in and around Wheat Ridge; and WHEREAS, the general consensus is that the scarcity of condominiums available for sale in Wheat Ridge is the result of a litigation climate that puts builders and developers at risk of substantial judgments, often including punitive damages, for alleged construction defects; and WHEREAS, that risk of exposure to large damage awards has led insurance companies who would normally insure development projects to stop writing policies for owner -occupied multi -family projects; and WHEREAS, the City Council finds that the health, safety and welfare of Wheat Ridge residents is being negatively impacted by the lack of housing options; and WHEREAS, the City Council further finds that while the scarcity of new condominium projects is not unique to the City of Wheat Ridge, the City nevertheless experiences some unique impacts because of its proximity to the electric commuter rail line and the aging of its population, among other factors; and WHEREAS, the City Council finds there in a need for affordable housing in proximity to transit stations; and WHEREAS, the lack of such affordable housing is related, in part, to the cost of construction insurance; and. WHEREAS, the City Council therefore desires to take reasonable steps within its power as a home rule city to encourage the development of owner -occupied multi -family residential projects through the adoption of regulations designed to reduce the risk and exposure to builders and developers of such projects, while still protecting home- owners' ability to obtain corrective action for legitimate construction defect claims. NOW THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF WHEAT RIDGE, COLORADO: Section 1. Chapter 26 of the Code of Laws is amended to add a new Article 13 to read as follows: ARTICLE 13 REPAIR OF CONSTRUCTION DEFECTS Sec. 26-1301 - Purposes and Applicability. A. The purposes of this Article are to: 1. Encourage the construction of high quality owner -occupied multi -family developments in Wheat Ridge,- 2. idge;2. Facilitate the implementation of the Wheat Ridge Comprehensive Plan and zoning ordinance, both of which contemplate owner -occupied multi -family developments in transit -oriented areas and throughout the city; 3. Reassure homeowners that most, if not all, construction defects will be promptly investigated and repaired by builders; 4. Motivate all parties to resolve disputes involving construction defects quickly and without the need for expensive and time-consuming litigation; and provide homeowners in communities with homeowners associations with an enhanced opportunity to participate in the governance of their community by empowering individual owners to give or withhold their informed consent with respect to actions the board of the homeowners association may desire to pursue regarding construction defects. B. Applicability. This Article shall apply only to new construction commenced after , 2015. 2 Sec. 26-1302 - Definitions. Association means a homeowners association governing certain owners' rights and responsibilities in an attached multi -family dwelling, a common interest community, a condominium or other multi -family development. Builder means any entity or individual, including but not limited to a builder, developer, general contractor, contractor, subcontractor, architect, engineer or original seller who performs or furnishes the design, supervision, inspection, construction or observation of any improvement to real property that is intended to be occupied as a dwelling or to provide access or amenities to such an improvement. Building Code means the current version of the International Building Code, as adopted by the city. Construction Defect means any instance in which a structure or portion thereof does not conform in all material respects to the applicable section(s) of the Building Code, or does not conform to the manufacturer's specifications if those specifications are more strict than the applicable provisions of the Building Code, and the effect of which is to materially lower the value of the structure or pose a safety risk to its occupants. Homeowner means any person who owns a unit in an attached multi family dwelling, a common interest community, a condominium or other multifamily development, but shall not include any declarant or any person having an interest in a unit solely as security for an obligation. As used in this Article, Declarant shall have the meaning set forth in C.R.S. § 38-33.3-103(12). Sec. 26-1303 - Potential Claimants Original buyers or subsequent owners of a unit in an attached multi -family dwelling, a common interest community, a condominium or other multifamily development, or the governing homeowners association thereof, may assert the rights of a claimant under this Article by sending notice of a construction defect, provided the notice is sent within the applicable time period. Sec. 26-1304 - Potential Respondents Any person or entity within the definition of a "Builder" as defined in Section 26-1302 of this Article is subject to the requirements of this Article. Sec. 26-1305 - Claimant's Notice to Builder of Construction Defects; Builder's Acknowledgement; Inspection A. Claimant's notice. Upon the discovery of any alleged construction defect, a claimant must provide written notice via certified mail or personal delivery to the party alleged to have caused or contributed to the defect, in the manner prescribed in this section, of the claimant's claim that one or more construction 3 defects exists in his/her residence or, with respect to any homeowners association, that one or more construction defects exists in any residence or in any common areas or facilities. The notice must: 1. Provide the claimant's name, address and preferred method of contact; 2. Provide the name and address of the claimant's attorney, if any; 3. State that the claimant alleges a construction defect pursuant to this Article against the builder; and 4. Describe the claim in reasonable detail sufficient to determine the nature and location of the alleged Construction Defects. B. Builder's Responsibilities. After receiving notice of a potential construction defect claim, a Builder must do each of the following: 1. Acknowledge claim in writing. a. A builder who receives a notice under this Article shall acknowledge receipt of the notice, in writing, within 14 days after receipt. The notice shall be sent to the claimant and to any attorney the builder knows to be representing the claimant in connection with the notice. If the builder has retained legal counsel, said counsel shall thereafter communicate with the claimant's legal representative, if any. b. If the builder fails to acknowledge receipt of a notice within the time specified, this Article shall not apply and the claimant shall be released from the requirements of this Article and may proceed with the filing of an action against the builder. 2. Maintain an agent for notice with the Colorado Secretary of State if required by the form of the builder's corporate or business structure, and if not, otherwise provide an address and contact person for notices under this Article; and 3. If specifically asked to do so by the claimant and within 30 days of such a request, provide the claimant or his/her legal representative with: a. copies of all relevant plans, specifications, grading plans, soils reports and available engineering calculations pertaining to the claimant's residence; b. all maintenance and preventative maintenance recommendations pertaining to the claimant's residence; and c. limited contractual warranty information. 4. A builder responding to a claimant's request for documents may charge reasonable copying costs and may require the copies of the documents to be made at the builder's location. 5. Builder's election to inspect property. In addition to the requirements set forth in this Section, if the builder elects to inspect the claimed construction defect, 4 the builder shall complete the initial inspection and testing, if any, within 30 days after the builder acknowledged receipt of the notice, and at a mutually agreeable date and time. The builder shall bear all costs of inspection and testing, including any damage caused by the inspection and testing. Before entering onto the premises for the inspection, the builder shall supply the claimant with proof of liability insurance coverage. The builder shall, upon request, allow the inspection to be observed and recorded or photographed. Nothing that occurs during a builder's inspection may be used or introduced as evidence to support a defense of spoliation of evidence by any potential party in subsequent litigation. 6. A builder who fails to comply with any of the foregoing requirements within the time specified is not entitled to the protection of this Article, and the homeowner is released from the requirements of this Article and may proceed with the filing of an action. 7. If a notice is sent to the builder in accordance with this section within the time prescribed for the filing of an action under any applicable statute of limitations or repose, then the statute of limitations or repose is tolled until sixty days after the completion of the notice process described in section 26-1305. If the builder elects to repair pursuant to 26-1306, then the statute of limitations or repose is tolled until sixty days after the completion of repairs. The tolling imposed by this section shall be limited only to the construction defect described in the notice. Sec. 26-1306 - Builder's Right to Repair A. Within thirty (30) days of the initial inspection or testing, the builder may elect to repair the construction defect. If the builder elects to repair the construction defect, it has the right to do so and the claimant may not, directly or indirectly, impair, impede or prohibit the builder from making repairs. Any notice to repair shall offer to compensate the claimant for all applicable damages within the timeframe set for repair. Any notice of repair shall be accompanied by a detailed, step-by-step explanation of the particular defect being repaired and setting forth a reasonable completion date for the repair work. The notice shall also include the contact information for any contractors the builder intends to employ for the repairs. B. Claimant shall promptly cooperate with builder to schedule repair work by builder. C. Within ten (10) days after receipt of the builder's notice to repair, a claimant may deliver to the builder a written objection to the proposed repair if the claimant believes in good faith that the proposed repair will not remedy the alleged defect. The builder may elect to modify the proposal in accordance with the claimant's objection, or may proceed with the scope of work set forth in the original proposal. D. Builder's failure to comply. If the builder fails to send a notice to repair or otherwise strictly comply with this Article within the specified time frames, or if the builder does not complete the repair within the time set forth in the notice to repair, the claimant shall be released from the requirements of this Article and may proceed with the filing of an action against the builder. Notwithstanding the foregoing, if the builder notifies the claimant in writing at least 5 days before the stated completion date that the repair work will not be completed by the completion date, the builder shall be entitled to one reasonable extension of the completion date, not to exceed 30 days. E. Completion of repairs. The builder shall notify the claimant when repairs have been completed. The claimant shall have ten days following the completion date to have the premises inspected to verify that the repairs are complete and satisfactorily resolved the alleged defects. An association claimant who believes in good faith that the repairs made do not resolve the defects may proceed with the notice required by section 26-1310. Any other claimant may then elect to file an action under C.R.S. § 13-20-803.5 or any other applicable statute or court rule. Sec. 26-1307 - Warranty of Repairs The repair work performed by the builder shall be warranted against material defects in design or construction for a period of 2 years, which warranty shall be in addition to any express warranties on the original work. Sec. 26-1308 - Subsequently Discovered Defects Any alleged construction defect discovered after repairs have been completed shall be subject to the same requirements of this Article if the builder did not have notice or an opportunity to repair the particular defect. Sec. 26-1309 - Alternative Dispute Resolution Provisions Nothing in this Article shall preclude the claimant and builder from reaching a mutual agreement regarding alternative dispute resolutions. If a provision found in the declaration, bylaws or rules and regulations of a condominium development or common interest community requires that construction defect claims be submitted to mediation or arbitration, that requirement constitutes a commitment on the part of the unit owners and the association upon which a developer, contractor, architect, builder or other person involved in the construction of the community is entitled to rely. Consequently, a subsequent amendment to the declaration, bylaws or rules and regulations that removes or amends the mediation or arbitration requirement shall not be effective with regard to any construction defect claim that is based on an alleged act or omission that predates that amendment. Sec. 26-1310 - Association Obligation to Inform Homeowners. Homeowners are entitled to be kept informed by boards of homeowners associations of the board's consideration of actions regarding construction defects and to have meaningful input and a right to make a considered judgment and give (or withhold) institute an action asserting one or more construction defects, the board must do each of the following: no A. At least sixty (60) days before filing any action under C.R.S. § 13-20-803.5, or on any other statute on court rule, an Association claimant must mail or deliver written notice to each homeowner at the homeowner's last known address. B. The notice must be signed by a person other than, and not employed or otherwise affiliated with, the attorney or law firm that represents or will represent the association in the construction defects claim. C. The notice required by this section must contain the following information: 1. The nature of the action and the relief sought: 2. The amount of expenses and fees the board anticipates will be incurred, directly or indirectly, in prosecuting the action. Attorney's fees, consultant fees, expert witness fees and court costs, whether incurred by the association directly or for which it may be liable if it is not the prevailing party or if it does not proceed with the action; 3. The estimated cost of repairing the defect, or if the defect is not repaired, the estimated reduction in value of the unit; 4. The estimated impact on the marketability of units that are not the subject of the action, including any impact on the ability of the owners to refinance their property during and after the action; 5. The manner in which the association proposes to fund the cost of the action, including any proposed special assessments or the use of any revenues; and 6. The anticipated duration of the action and the likelihood of success. 7. Whether the builder has offered to make any repairs and, if so, whether the builder has made repairs. 8. The steps taken by the builder in accordance with this Article to address the alleged defect, including any acknowledgement, inspection, election to repair or repairs. D. The association claimant may not commence the action unless the board obtains the written consent of homeowners holding at least a majority of the total voting rights in the association after giving the notice required by this section. In the event the association governs units in more than a single building, the written consent required by this section shall be a majority of the units with voting rights only in the building or buildings in which the construction defect is alleged to be present. Homeowners may vote either directly or through a proxy directed in writing by the homeowner and confirmed in writing by the proxy. Such consent must be obtained within 60 days after such notice is provided, otherwise the owners shall be deemed to have declined to provide their informed consent to such action. 7 Section 2. The Code of Laws is amended by the addition of a new Section 26- 420, to read: Sec. 26-420 - Plat note concerning multi -family development. A.Contents. Only at the specific written request of the applicant, a final plat containing lots, blocks, or other land intended for the development of owner - occupied multi -family dwelling units or associated common areas, limited common elements, or improvements within a common interest community (the "multi -family development area") will include the following plat note, applicable to the property within such multi -family development area and the improvements thereon. THIS PLAT CONTAINS LOTS, BLOCKS, OR CHER LAND INTENDED FOR THE DEVELOPMENT OF OWNER -OCCUPIED MULTI -FAMILY DWELLING UNITS OR ASSOCIATED COMMON AREAS, LIMITED COMMON ELEMENTS, OR IMPROVEMENTS (THE "MULTI -FAMILY DEVELOPMENT AREA"). TO THE EXTENT THAT THE FOLLOWING CLAIMS INVOLVE ANY MULTI -FAMILY DEVELOPMENT AREA (OR THE IMPROVEMENTS THEREON) WITHIN THE PROPERTY COVERED BY THIS PLAT, SUCH CLAIMS SHALL BE SUBMITTED TO BINDING ARBITRATION IN LIEU OF SUBMITTING ANY SUCH CLAIM TO A COURT OF LAW. ANY AND ALL CLAIMS THAT ALLEGE A CONSTRUCTION DEFECT AS DEFINED AT SECTION 26-1302 OF THE CODE OF LAWS AND: (1) ARE BETWEEN ANY TWO OR MORE OF THE FOLLOWING PERSONS OR ENTITIES: (A) ANY OWNER OF ANY PORTION OF THE MULTI -FAMILY DEVELOMENT AREA, (B) ANY COMMON INTEREST COMMUNITY ASSOCIATION CREATED WITH RESPECT TO THE MULTI -FAMILY DEVELOPMENT AREA, (C) THE SUBDIVIDER, DEVELOPER, CONTRACTOR, OR ANYONE CLAIMING UNDER OR THROUGH ANY SUCH PERSONS, (D) ANY PARTY THAT CONSTRUCTS OR DESIGNS ANY PROTION OF ANY RESIDENTIAL DWELLING UNITS UPON THE MULTI -FAMILY DEVELOPMENT AREA, AND (E) ANY CONSTRUCTION PROFESSIONAL AS DEFINED IN THE CONSTRUCTION DEFECT ACTION REFORM ACT, C.R.S. 13-80-802.5, ET SEQ. AS AMENDED ("CDARA"); AND (2) THAT PERTAINS TO ANY OF: (A) THE MULTI -FAMILY DEVELOPMENT AREA, (B) ANY DWELLING UNIT, COMMON AREA DEVELOPMENT STRUCTURE, LIMITED COMMON ELEMENTS, OR OTHER IMPROVEMENTS CONSTRUCTED ON THE MULTI-FAMIL DEVELOPMENT AREA, (C) THE COMMON INTEREST COMMUNITY TO BE CREATED FOR THE MULTI -FAMILY 0 DEVELOPMENT AREA OR ANY PORTION THEREOF, OR (D) THE DECLARATION OR OTHER DOCUMENTS GOVERNING SUCH COMMUNITY. THE FOREGOIONG SHALL NOT PRECLUDE ANY OF THE PERSONS OR ENTITIES DESCRIBED ABOVE FROM ENDEAVORING TO RESOLVE ANY SUCH CLAIM(S) THROUGH EITHER NEGOTIATION OR MEDIATION BEFORE SUBMITTING SUCH CLAIM(S) TO BINDING ARBITRATION. ADDITIONALLY, THE MULTI -FAMILY DEVELOPMENT AREA MAY ALSO BE SUBJECT TO A DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS THAT MAY IMPLEMENT AND EXPAND UPON THE REQUIREMENTS OF THIS PLAT NOTE AND THAT MAY EXEMPT CERATIN CLAIMS FROM THE REQUIREMENT THAT SUCH CLAIMS MUST BE SUBMITTED TO BINDING ARBITRATION. PROVIDED, HOWEVER, THAT ANY SUBSEQUENT AMENDMENT OR CHANGE TO SUCH DECLARATION OF COVENANTS, CONDITIONS OR RESTRICTION SHALL NOT ELIMINATE THIS REQUIREMENT THAT CONSTRUCTION DEFECT CLAIMS SHALL BE SUBMITTED TO BIDING ARBITRATION IN LIEU OF SUBMITTING ANY SUCH CLAIM TO A COURT OF LAW. FOR PURPOSES OF THIS PLAT NOTE, BINDNG ARBITRATION SHALL MEAN SUBMISSION OF ANY CLAIM DESCRIBED ABOVE TO THE ARBITARTION SERVICE PROVIDER SPECIFIED IN THE DECLARATION OR OTHER GOVERNING DOCUMENTS OF THE COMMON INTEREST COMMUNITY, IF QUALIFIED PURSUANT TO THE UNIFORM ARBITRATION ACT, PART 2 OF ARTICLE 22 OF TITLE 13, C.R.S. AND, IF NOT, AN ARBITRATION SERVICE PROVIDER SO QUALIFIED, INSUCH ARBITRATION, THE COSTS AND EXPENSES OF ARBITRATION SHALL BE BORNE EQUALLY BY THE PARTIES. ALL FUTURE PURCHASERS OF ANY INTEREST IN THE MULTI -FAMILY DEVELOPMENT AREA ARE DEEMED TO HAVE ACCEPTED AND AGREE TO THE TERMS AND CONDITIONS OF THIS PLAT NOTE AND SHALL BE BOUND BY THE PLAT NOTE, WHICH IS RECORDED IN THE JEFFERSON COUNTY CLERK AND RECORDER'S OFFICE, DEEMED TO BE A COVENANT RUNNING WITH THE MULTI -FAMILY DEVLEOPMENT AREA, AND BINDING UPON ALL SUCCESSORS IN INTEREST, GRANTEES, OWNERS, HEIRS, ASSIGNS, AND ALL OTEHRS WHO ACQUIRE AN INTEREST IN OR TO THE MULTI -FAMILY DEVELOPMENT AREA, 9 TOGETHER WITH ANY COMMON INTERST COMMUNITY ASSOCIATION ASSOCIATED THEREWITH. B. Disclosure. If a plat, pursuant to subparagraph 1.1 above, contains the plat note described herein, then the developer, builder, or other person or entity engaged in the initial sale of a lot or dwelling unit within the multi -family development Area of such plat to the intended resident or end user shall be required to include in such contract for purchase and sale a disclosure statement in bold-faced type that is clearly legible and in substantially the following form: THE RECORDED PLAT OF THE PROPERTY WITHIN WHICH THIS LOT OR UNIT IS SITUATED CONTAINS A RESTRICTION REQUIRING MANDATORY, BINDING ARBITRATION FOR CERTAIN TYPES OF CLAIMS, IN LIEU OF SEEKING REDRESS IN A COURT OF LAW, PURCHASERS SHOULD CAREFULLY READ THE PLAT AND NOTE CONCERNING ARBITRATION, AS THEY ARE DEEMED TO HAVE ACCEPTED AND AGREED TO THE TERMS AND CONDITIONS OF SUCH PLAT NOTE. C. Applicability. A request for plat note, as provided for in this section, shall be permitted only as to a final plat concerning land for which an application is filed after , 2015. Section 3. Severability, Conflicting Ordinances Repealed. If any section, subsection or clause of this Ordinance shall be deemed to be unconstitutional or otherwise invalid, the validity of the remaining sections, subsections and clauses shall not be affected thereby. All other ordinances or parts of ordinances in conflict with the provisions of this Ordinance are hereby repealed. Section 4. Effective Date. This Ordinance shall take effect fifteen (15) days after final publication, as provided by Section 5.11 of the Charter. INTRODUCED, READ, AND ADOPTED on first reading by a vote of to on this day of , 2015, ordered published in full in a newspaper of general circulation in the City of Wheat Ridge, and Public Hearing and consideration on final passage set for , 2015 at 7:00 p.m., in the Council Chambers, 7500 West 29t Avenue, Wheat Ridge, Colorado. READ, ADOPTED AND ORDERED PUBLISHED on second and final reading by a vote of to , this day of 2015. SIGNED by the Mayor on this day of , 2015. 10 Joyce Jay, Mayor ATTEST: Janelle Shaver, City Clerk Approved as to Form Gerald E. Dahl, City Attorney First Publication: Second Publication: Wheat Ridge Transcript Effective Date: Published: Wheat Ridge Transcript and www.ci.wheatridge.co.us 11 Revised Ordinance for August 6 PC Hearing CITY OF WHEAT RIDGE, COLORADO INTRODUCED BY COUNCIL MEMBER COUNCIL BILL NO. ORDINANCE NO. Series 2015 TITLE: AN ORDINANCE ADDING A NEW ARTICLE XIII CHAPTER 26 TO THE WHEAT RIDGE CODE OF LAWS CONCERNING REPAIR OF CONSTRUCTION DEFECTS WHEREAS, the City of Wheat Ridge is a home rule municipality having all powers conferred by Article XX of the Colorado Constitution; and WHEREAS, land use, planning and general business regulation are well established as matters of purely local concern, and therefore subject to regulation by home rule cities; and WHEREAS, the City's zoning ordinance and Comprehensive Plan both contemplate a diverse housing stock, consisting of a mix of single-family and multifamily developments, and both owned and rented units, designed to serve the needs of all Wheat Ridge residents; and WHEREAS, the introduction of electric commuter rail service via the Gold Rail Line has intensified the need for owner -occupied units, particularly in transit -oriented zones around transit rail stations; and WHEREAS, despite a genuine demand for such housing options, statistics show that almost no owner -occupied multi -family developments, or condominiums, are being developed in and around Wheat Ridge; and WHEREAS, the City Council finds that the scarcity of condominiums available for sale in Wheat Ridge is the result of a litigation climate that puts builders and developers at risk of substantial judgments, often including punitive damages, for alleged construction defects; and WHEREAS, the City Council finds that risk of exposure to large damage awards has led insurance companies who would normally insure development projects to stop writing policies for owner -occupied multi -family projects; and WHEREAS, the City Council finds that the health, safety and welfare of Wheat Ridge residents is being negatively impacted by the lack of housing options; and WHEREAS, the City Council further finds that while the scarcity of new condominium projects is not unique to the City of Wheat Ridge, the City nevertheless experiences some unique impacts because of its proximity to the electric commuter rail line and the aging of its population, among other factors; and WHEREAS, the City Council finds there in a need for affordable housing in proximity to transit stations; and WHEREAS, the lack of such affordable housing is related, in part, to the cost of construction insurance; and. WHEREAS, the City Council therefore desires to take reasonable steps within its power as a home rule city to encourage the development of owner -occupied multi -family residential projects through the adoption of regulations designed to reduce the risk and exposure to builders and developers of such projects, while still protecting home- owners' ability to obtain corrective action for legitimate construction defect claims. NOW THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF WHEAT RIDGE, COLORADO: Section 1. Chapter 26 of the Code of Laws is amended to add a new Article 13 to read as follows: ARTICLE 13 REPAIR OF CONSTRUCTION DEFECTS 26-1301 Purposes and Applicability. A. The purposes of this Article are to: 1. Encourage the construction of high quality owner -occupied multi -family developments in Wheat Ridge; 2. Facilitate the implementation of the Wheat Ridge Comprehensive Plan and zoning ordinance, both of which contemplate owner -occupied multi -family developments in transit -oriented areas and throughout the city; 3. Reassure homeowners that most, if not all, construction defects will be promptly investigated and repaired by builders; 4. Motivate all parties to resolve disputes involving construction defects quickly and without the need for expensive and time-consuming litigation; and provide homeowners in communities with homeowners associations with an enhanced opportunity to participate in the governance of their community by empowering individual owners to give or withhold their informed consent with respect to actions the board of the homeowners association may desire to pursue regarding construction defects. B. Applicability. This Article shall apply only to new construction commenced after August 24, 2015. 26-1302 Definitions. 2 Association means a homeowners association governing certain owners' rights and responsibilities in an attached multi -family dwelling, a common interest community, a condominium or other multi -family development. Builder means any entity or individual, including but not limited to a builder, developer, general contractor, contractor, subcontractor, architect, engineer or original seller who performs or furnishes the design, supervision, inspection, construction or observation of any improvement to real property that is intended to be occupied as a dwelling or to provide access or amenities to such an improvement. Building Code means the current version of the International Building Code, as adopted by the city. Construction Defect means any instance in which a structure or portion thereof does not conform in all material respects to the applicable section(s) of the Building Code, or does not conform to the manufacturer's specifications if those specifications are more strict than the applicable provisions of the Building Code, and the effect of which is to materially lower the value of the structure or pose a safety risk to its occupants. Declarant shall have the meaning set forth in C.R.S. § 38-33.3-103(12). Homeowner means any person who owns a unit in an attached multi family dwelling, a common interest community, a condominium or other multifamily development, but shall not include any declarant or any person having an interest in a unit solely as security for an obligation. Declarant shall have the meaning set forth in C.R.S. § 38-33.3-103(12). 26-1303 Potential Claimants Original buyers or subsequent owners of a unit in an attached multi -family dwelling, a common interest community, a condominium or other multifamily development, or the governing homeowners association thereof, may assert the rights of a claimant under this Article by sending notice of a construction defect, provided the notice is sent within the applicable time period. 26-1304 Potential Respondents Any person or entity within the definition of a "Builder" as defined in Section 26-1302 of this Article is subject to the requirements of this Article. 26-1305 Claimant's Notice to Builder of Construction Defects; Builder's Acknowledgement; Inspection A. Claimant's notice. Upon the discovery of any alleged construction defect, a claimant must provide written notice via certified mail or personal delivery to the party alleged to have caused or contributed to the defect, in the manner 3 prescribed in this section, of the claimant's claim that one or more construction defects exists in his/her residence or, with respect to any homeowners association, that one or more construction defects exists in any residence or in any common areas or facilities. The notice must: 1. Provide the claimant's name, address and preferred method of contact; 2. Provide the name and address of the claimant's attorney, if any; 3. State that the claimant alleges a construction defect pursuant to this Article against the builder; and 4. Describe the claim in reasonable detail sufficient to determine the nature and location of the alleged Construction Defects. B. Builder's Responsibilities. After receiving notice of a potential construction defect claim, a Builder must do each of the following: 1. Acknowledge claim in writing. a. A builder who receives a notice under this Article shall acknowledge receipt of the notice, in writing, within 14 days after receipt. The acknowledgement shall be sent to the claimant and to any attorney the builder knows to be representing the claimant in connection with the notice. If the builder has retained legal counsel, said counsel shall thereafter communicate with the claimant's legal representative, if any. b. If the builder fails to acknowledge receipt of a notice within the time specified, this Article shall not apply and the claimant shall be released from the requirements of this Article and may proceed with the filing of an action against the builder. 2. Maintain an agent for notice with the Colorado Secretary of State if required by the form of the builder's corporate or business structure, and if not, otherwise provide an address and contact person for notices under this Article; and 3. If specifically asked to do so by the claimant and within 30 days of such a request, provide the claimant or his/her legal representative with: a. copies of all relevant plans, specifications, grading plans, soils reports and available engineering calculations pertaining to the claimant's residence; b. all maintenance and preventative maintenance recommendations pertaining to the claimant's residence; and c. limited contractual warranty information. 4. A builder responding to a claimant's request for documents may charge reasonable copying costs and may require the copies of the documents to be made at the builder's location. 21 5. Builder's election to inspect property. In addition to the requirements set forth in this Section, if the builder elects to inspect the claimed construction defect, the builder shall complete the initial inspection and testing, if any, within 30 days after the builder acknowledged receipt of the notice, and at a mutually agreeable date and time. The builder shall bear all costs of inspection and testing, including any damage caused by the inspection and testing. Before entering onto the premises for the inspection, the builder shall supply the claimant with proof of liability insurance coverage. The builder shall, upon request, allow the inspection to be observed and recorded or photographed. Nothing that occurs during a builder's inspection may be used or introduced as evidence to support a defense of spoliation of evidence by any potential party in subsequent litigation. 6. A builder who fails to comply with any of the foregoing requirements within the time specified is not entitled to the protection of this Article, and the homeowner is released from the requirements of this Article and may proceed with the filing of an action. 7. If a notice is sent to the builder in accordance with this section within the time prescribed for the filing of an action under any applicable statute of limitations or repose, then the statute of limitations or repose is tolled until sixty days after the completion of the notice process described in section 26-1305. If the builder elects to repair pursuant to 26-1306, then the statute of limitations or repose is tolled until sixty days after the completion of repairs. The tolling imposed by this section shall be limited only to the construction defect described in the notice. 26-1306 Builder's Right to Repair A. Within thirty (30) days of the initial inspection or testing, the builder may elect to repair the construction defect. If the builder elects to repair the construction defect, it has the right to do so and the claimant may not, directly or indirectly, impair, impede or prohibit the builder from making repairs. Any notice to repair shall offer to compensate the claimant for all applicable damages within the timeframe set for repair. Any notice of repair shall be accompanied by a detailed, step-by-step explanation of the particular defect being repaired and setting forth a reasonable completion date for the repair work. The notice shall also include the contact information for any contractors the builder intends to employ for the repairs. B. Claimant shall promptly cooperate with builder to schedule repair work by builder. C. Within ten (10) days after receipt of the builder's notice to repair, a claimant may deliver to the builder a written objection to the proposed repair if the claimant believes in good faith that the proposed repair will not remedy the alleged defect. The builder may elect to modify the proposal in accordance with the claimant's objection, or may proceed with the scope of work set forth in the original proposal. 5 D. Builder's failure to comply. If the builder fails to send a notice to repair or otherwise strictly comply with this Article within the specified time frames, or if the builder does not complete the repair within the time set forth in the notice to repair, the claimant shall be released from the requirements of this Article and may proceed with the filing of an action against the builder. Notwithstanding the foregoing, if the builder notifies the claimant in writing at least 5 days before the stated completion date that the repair work will not be completed by the completion date, the builder shall be entitled to one reasonable extension of the completion date, not to exceed 30 days. E. Completion of repairs. The builder shall notify the claimant when repairs have been completed. The claimant shall have ten days following the completion date to have the premises inspected to verify that the repairs are complete and satisfactorily resolved the alleged defects. An association claimant who believes in good faith that the repairs made do not resolve the defects may proceed with the notice required by section 26-1310. Any other claimant may then elect to file an action under C.R.S. § 13-20-803.5 or any other applicable statute or court rule. 26-1307 Warranty of Repairs The repair work performed by the builder shall be warranted against material defects in design or construction for a period of 2 years, which warranty shall be in addition to any express warranties on the original work. This section shall not apply to the extent any architect or designer is not permitted by law to warranty such work. 26-1308 Subsequently Discovered Defects Any alleged construction defect discovered after repairs have been completed shall be subject to the same requirements of this Article if the builder did not have notice or an opportunity to repair the particular defect. 26-1309 Alternative Dispute Resolution Provisions Nothing in this Article shall preclude the claimant and builder from reaching a mutual agreement regarding alternative dispute resolutions. If a provision found in the declaration, bylaws or rules and regulations of a condominium development or common interest community requires that construction defect claims be submitted to mediation or arbitration, that requirement constitutes a commitment on the part of the unit owners and the association upon which a developer, contractor, architect, builder or other person involved in the construction of the community is entitled to rely. Consequently, a subsequent amendment to the declaration, bylaws or rules and regulations that removes or amends the mediation or arbitration requirement shall not be effective with regard to any construction defect claim that is based on an alleged act or omission that predates that amendment. 26-1310 Association Obligation to Inform Homeowners. Homeowners are entitled to be kept informed by boards of homeowners associations of the board's consideration of actions regarding construction defects C.1 and to have meaningful input and a right to make a considered judgment and give (or withhold) consent to institute an action asserting one or more construction defects. The association board must do each of the following: A. At least sixty (60) days before filing any action under C.R.S. § 13-20-803.5, or on any other statute or court rule, an association claimant must mail or deliver written notice to each homeowner at the homeowner's last known address. B. The notice must be signed by a person other than, and not employed or otherwise affiliated with, the attorney or law firm that represents or will represent the association in the construction defects claim. C. The notice required by this section must contain the following information: 1. The nature of the action and the relief sought,- 2. ought;2. The amount of expenses and fees the board anticipates will be incurred, directly or indirectly, in prosecuting the action, including attorney fees, consultant fees, expert witness fees and court costs, whether incurred by the association directly or for which it may be liable if it is not the prevailing party or if it does not proceed with the action; 3. The estimated cost of repairing the defect, or if the defect is not repaired, the estimated reduction in value of the unit; 4. The estimated impact on the marketability of units that are not the subject of the action, including any impact on the ability of the owners to refinance their property during and after the action; 5. The manner in which the association proposes to fund the cost of the action, including any proposed special assessments or the use of any revenues; 6. The anticipated duration of the action and the likelihood of success,- 7. uccess;7. Whether the builder has offered to make any repairs and, if so, whether the builder has made repairs; and 8. The steps taken by the builder, if any, in accordance with this Article to address the alleged defect, including any acknowledgement, inspection, election to repair or repairs. D. The association claimant may not commence the action unless the board obtains the written consent of homeowners holding at least a majority of the total voting rights in the association after giving the notice required by this section. In the event the association governs units in more than a single building, the written consent required by this section shall be a majority of the units with voting rights only in the building or buildings in which the construction defect is alleged to be present. Homeowners may vote either directly or through a proxy directed in writing by the homeowner and confirmed in writing by the proxy. Such consent must be obtained within 60 days after such notice is provided, otherwise the owners shall be deemed to have declined to provide their informed consent to such action. 7 Section 2. The Code of Laws is amended by the addition of a new Section 26-420, to read: Sec. 26-420. Plat note concerning multi -family development. A.Contents. Only at the specific written request of the applicant, a final plat containing lots, blocks, or other land intended for the development of owner - occupied multi -family dwelling units or associated common areas, limited common elements, or improvements within a common interest community (the "multi -family development area") will include the following plat note, applicable to the property within such multi -family development area and the improvements thereon. THIS PLAT CONTAINS LOTS, BLOCKS, OR OHER LAND INTENDED FOR THE DEVELOPMENT OF OWNER -OCCUPIED MULTI -FAMILY DWELLING UNITS OR ASSOCIATED COMMON AREAS, LIMITED COMMON ELEMENTS, OR IMPROVEMENTS (THE "MULTI -FAMILY DEVELOPMENT AREA"). TO THE EXTENT THAT THE FOLLOWING CLAIMS INVOLVE ANY MULTI -FAMILY DEVELOPMENT AREA (OR THE IMPROVEMENTS THEREON) WITHIN THE PROPERTY COVERED BY THIS PLAT, SUCH CLAIMS SHALL BE SUBMITTED TO BINDING ARBITRATION IN LIEU OF SUBMITTING ANY SUCH CLAIM TO A COURT OF LAW. ANY AND ALL CLAIMS THAT ALLEGE A CONSTRUCTION DEFECT AS DEFINED AT SECTION 26-1302 OF THE CODE OF LAWS AND: (1) ARE BETWEEN ANY TWO OR MORE OF THE FOLLOWING PERSONS OR ENTITIES: (A) ANY OWNER OF ANY PORTION OF THE MULTI -FAMILY DEVELOMENT AREA, (B) ANY COMMON INTEREST COMMUNITY ASSOCIATION CREATED WITH RESPECT TO THE MULTI -FAMILY DEVELOPMENT AREA, (C) THE SUBDIVIDER, DEVELOPER, CONTRACTOR, OR ANYONE CLAIMING UNDER OR THROUGH ANY SUCH PERSONS, (D) ANY PARTY THAT CONSTRUCTS OR DESIGNS ANY PROTION OF ANY RESIDENTIAL DWELLING UNITS UPON THE MULTI -FAMILY DEVELOPMENT AREA, AND (E) ANY CONSTRUCTION PROFESSIONAL AS DEFINED IN THE CONSTRUCTION DEFECT ACTION REFORM ACT, C.R.S. 13-80-802.5, ET SEQ. AS AMENDED ("CDARA"); AND (2) THAT PERTAINS TO ANY OF: (A) THE MULTI -FAMILY DEVELOPMENT AREA, (B) ANY DWELLING UNIT, COMMON AREA DEVELOPMENT STRUCTURE, LIMITED COMMON ELEMENTS, OR OTHER IMPROVEMENTS CONSTRUCTED ON THE MULTI-FAMIL n. DEVELOPMENT AREA, (C) THE COMMON INTEREST COMMUNITY TO BE CREATED FOR THE MULTI -FAMILY DEVELOPMENT AREA OR ANY PORTION THEREOF, OR (D) THE DECLARATION OR OTHER DOCUMENTS GOVERNING SUCH COMMUNITY. THE FOREGOING SHALL NOT PRECLUDE ANY OF THE PERSONS OR ENTITIES DESCRIBED ABOVE FROM ENDEAVORING TO RESOLVE ANY SUCH CLAIM(S) THROUGH EITHER NEGOTIATION OR MEDIATION BEFORE SUBMITTING SUCH CLAIM(S) TO BINDING ARBITRATION. ADDITIONALLY, THE MULTI -FAMILY DEVELOPMENT AREA MAY ALSO BE SUBJECT TO A DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS THAT MAY IMPLEMENT AND EXPAND UPON THE REQUIREMENTS OF THIS PLAT NOTE AND THAT MAY EXEMPT CERATIN CLAIMS FROM THE REQUIREMENT THAT SUCH CLAIMS MUST BE SUBMITTED TO BINDING ARBITRATION, PROVIDED, HOWEVER, THAT ANY SUBSEQUENT AMENDMENT OR CHANGE TO SUCH DECLARATION OF COVENANTS, CONDITIONS OR RESTRICTION SHALL NOT ELIMINATE THIS REQUIREMENT THAT CONSTRUCTION DEFECT CLAIMS SHALL BE SUBMITTED TO BIDING ARBITRATION IN LIEU OF SUBMITTING ANY SUCH CLAIM TO A COURT OF LAW. FOR PURPOSES OF THIS PLAT NOTE, BINDNG ARBITRATION SHALL MEAN SUBMISSION OF ANY CLAIM DESCRIBED ABOVE TO THE ARBITARTION SERVICE PROVIDER SPECIFIED IN THE DECLARATION OR OTHER GOVERNING DOCUMENTS OF THE COMMON INTEREST COMMUNITY, IF QUALIFIED PURSUANT TO THE UNIFORM ARBITRATION ACT, PART 2 OF ARTICLE 22 OF TITLE 13, C.R.S. AND, IF NOT, AN ARBITRATION SERVICE PROVIDER SO QUALIFIED IN SUCH ARBITRATION; THE COSTS AND EXPENSES OF ARBITRATION TO BE BORNE EQUALLY BY THE PARTIES. ALL FUTURE PURCHASERS OF ANY INTEREST IN THE MULTI -FAMILY DEVELOPMENT AREA ARE DEEMED TO HAVE ACCEPTED AND AGREED TO THE TERMS AND CONDITIONS OF THIS PLAT NOTE AND SHALL BE BOUND BY THE PLAT NOTE, WHICH IS RECORDED IN THE JEFFERSON COUNTY CLERK AND RECORDER'S OFFICE, DEEMED TO BE A COVENANT RUNNING WITH THE MULTI -FAMILY DEVLEOPMENT AREA, AND BINDING UPON ALL SUCCESSORS IN INTEREST, GRANTEES, OWNERS, HEIRS, ASSIGNS, AND ALL OTEHRS WHO ACQUIRE AN INTEREST IN 9 OR TO THE MULTI -FAMILY DEVELOPMENT AREA, TOGETHER WITH ANY COMMON INTERST COMMUNITY ASSOCIATION ASSOCIATED THEREWITH. B. Disclosure. If a plat, pursuant to subparagraph a above, contains the plat note described herein, then the developer, builder, or other person or entity engaged in the initial sale of a lot or dwelling unit within the multi -family development Area of such plat to the intended resident or end user shall be required to include in such contract for purchase and sale a disclosure statement in bold-faced type that is clearly legible and in substantially the following form: THE RECORDED PLAT OF THE PROPERTY WITHIN WHICH THIS LOT OR UNIT IS SITUATED CONTAINS A RESTRICTION REQUIRING MANDATORY, BINDING ARBITRATION FOR CERTAIN TYPES OF CLAIMS, IN LIEU OF SEEKING REDRESS IN A COURT OF LAW. PURCHASERS SHOULD CAREFULLY READ THE PLAT AND NOTE CONCERNING ARBITRATION, AS THEY ARE DEEMED TO HAVE ACCEPTED AND AGREED TO THE TERMS AND CONDITIONS OF SUCH PLAT NOTE. C. Applicability. A request for plat note, as provided for in this section, shall be permitted only as to a final plat concerning land for which an application is filed after August 24, 2015. Section 4. Severability Conflicting Ordinances Repealed. If any section, subsection or clause of this Ordinance shall be deemed to be unconstitutional or otherwise invalid, the validity of the remaining sections, subsections and clauses shall not be affected thereby. All other ordinances or parts of ordinances in conflict with the provisions of this Ordinance are hereby repealed. Section 5. Effective Date. This Ordinance shall take effect upon approval on second reading as permitted by Section 5.11 of the Charter. INTRODUCED, READ, AND ADOPTED on first reading by a vote of to on this day of , 2015, ordered published in full in a newspaper of general circulation in the City of Wheat Ridge, and Public Hearing and consideration on final passage set for , 2015 at 7:00 p.m., in the Council Chambers, 7500 West 291h Avenue, Wheat Ridge, Colorado. READ, ADOPTED AND ORDERED PUBLISHED on second and final reading by a vote of to , this day of , 2015. SIGNED by the Mayor on this day of , 2015. 10 Joyce Jay, Mayor ATTEST: Janelle Shaver, City Clerk Approved as to Form Gerald E. Dahl, City Attorney First Publication: Second Publication: Wheat Ridge Transcript Effective Date: Published.- Wheat ublished:Wheat Ridge Transcript and www.ci.wheatridge.co.us 11 CITY OF WHEAT RIDGE NOTICE OF PUBLIC HEARING BEFORE PLANNING COMMISSION NOTICE IS HEREBY GIVEN that a Public Hearing to consider Case No. ZOA-15-03 an ordinance adding a new article XIII chapter 26 of the Wheat Ridge Code of Laws concerning repair of construction defects will be held in the City Council Chambers, Municipal Building at 7500 West 29`h Avenue, Wheat Ridge, Colorado, on July 16, 2015 at 7:00 p.m. All interested citizens are invited to speak at the Public Hearing or submit written comments. The full text of this notice including a map is available in electronic form on the City's official website, www.ci.wheatridge.co.us, Legal Notices. Copies are also available in printed form in the Community Development Department. CITY OF WHEAT RIDGE NOTICE OF PUBLIC HEARING BEFORE PLANNING COMMISSION NOTICE IS HEREBY GIVEN that a Public Hearing to consider Case No. ZOA-15-03 an ordinance adding a new article XIII chapter 26 of the Wheat Ridge Code of Laws concerning repair of construction defects will be held in the City Council Chambers, Municipal Building at 7500 West 29`h Avenue, Wheat Ridge, Colorado, on July 16, 2015 at 7:00 p.m. All interested citizens are invited to speak at the Public Hearing or submit written comments. The full text of this notice including a map is available in electronic form on the City's official website, www.ci.wheatridge.co.us, Legal Notices. Copies are also available in printed form in the Community Development Department. Published: Wheat Ridge Transcript, July 2, 2015 Case No, ZOA1503 Date Received 6/24/2015 Related Cases Case Planner Dahl Case Descriptior-An ordinance adding a new article xiii chapter 26 of the wheat ridge code of laws concerning repair of construction defects. AAvAk-dW /idnvmeaI*vr Name City of Wheat Ridge Name Phone Address City State Zip Name Name Phone Address City State Zip Naive - Name Phone Address State Zip Az*W // iiia eia�r Address Street COY State C Zip Location Description ---� Project Name 'Construction Defect Ordinance Parcel No Qtr Section District No Referral Out Comments #2 Sent: Admin Posting Start: Referral Due Submittal #3 Rcvd: Admin Posting End: Comments #1 Sent Comments #3 Sent: Submittal #2 Rcvd: Rer�rs Pre -App Date I J Neighborhood Meeting Date App No: ✓ Public Hearing Review Type Review Body Review Date Disposition Comments Report Public Hearing- LPC 7/16/2015 _Q , First Reading 7/27/2015 —0 C Public Hearing Disposi/mv� Case Disposition Conditions of Approval Res# Ord# J 8/10/2015 U Disposition Date Notes Status _ Upon s Recorded Date: Storage: Reception #: -