May 7, 2015
From The Denver Business Journal

By Molly Armbrister

A Colorado Court of Appeals decision handed down Thursday sets a precedent for the way arbitration clauses are treated in governing documents for homeowners associations.

The ruling by a three-judge panel backs a builder's argument that condominium owners' construction-defects complaints can be submitted to arbitration before going to court if called for in original homeowners-association bylaws, even if those bylaws are later changed.

The decision was filed in the case of Vallagio at Inverness Residential Condominium Association Inc. v. Metropolitan Homes Inc. Vallagio at Inverness is a large complex of condos and restaurants near Interstate 25 and Dry Creek Road in the Centennial area of Arapahoe County.

Because the state already allows arbitration, individual governing documents must do so as well, said Amy Hansen, attorney at Polsinelli PC, which filed an amicus brief to the court on behalf of various groups, including the Colorado Contractors Association and the Metro Denver Economic Development Corp.

The decision sets a binding precedent for other cases with like conditions in the future, said Ryan Warren, also of Polsinelli. Only an overriding decision by the Colorado Supreme Court or law passed by the Legislature can undo the precedent, Warren said.

View the full article here.