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February 18, 2013
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Burlingame HOA president says siding concerns began a year ago

ASPEN - The Burlingame Ranch Phase I Condominium Association's board began taking up the issue of cracked exterior siding at the Aspen affordable-housing neighborhood about a year ago, the board's president said.

Several meetings between board members and city officials to consider ways of solving the issue followed, apparently without result other than leading the board to file a lawsuit last fall against the parties it believes to be responsible for the problem.

"There were many conversations," said Stefan Reveal, who heads the association representing 84 homeowners. The development has another seven homes in the neighborhood that are guided by a separate homeowners' association. Those homes, built by a different contractor from the one that constructed the other 84, don't face any siding damages, he said.

The issue of cracked siding at Burlingame Ranch surfaced a week ago at the Aspen City Council's regular meeting when local government critic Elizabeth Milias asked council members why they seemed to have little knowledge of the problem and the resulting lawsuit. The city, the Aspen-Pitkin County Housing Authority, contractor Shaw Construction and siding manufacturer Certainteed Corp. are the named defendants.

Milias suggested that the city put its plans for the second phase of Burlingame on hold because of the issue at Phase I and the revelation that a potential buyer of a unit that's for sale was denied a bank loan for a mortgage because of the siding problem. The city last year began a pre-sales process to identify potential buyers and is set to start construction on the houses this spring.

For the past few years, Milias - a blogger for the Red Ant website - has been a frequent critic of the city's affordable-housing program.

Reveal said he couldn't say whether more than one potential buyer has been denied financing. A few Burlingame homes were sold late last year, after the lawsuit was filed in Pitkin County District Court in September.

Last week, City Attorney Jim True said the city is requiring the construction company to handle its defense and related costs. Two claims are asserted in the lawsuit, he said. One is that Shaw inappropriately installed the siding. The other is that Certainteed improperly manufactured it.

Reveal said damages aren't visible outside every unit. However, he said the problem is shared by all 84 homeowners equally because the exterior walls and siding for the entire neighborhood are owned collectively.

"You own your unit from the drywall in," Reveal said. "So anything exterior of that, you don't actually own it. For example, I own my space, but I also own one-84th of every piece of siding, roofing, the landscaping and all that. It really doesn't matter if (the cracked siding) is all on one building or on all the buildings."

Reveal, a commercial banker, said the matter of somebody recently getting turned down for a mortgage on the basis of the cracked siding is troublesome.

"It is concerning for sure," he said. "Mortgage providers are required to receive a questionnaire. There's a question that asks, 'Is there any litigation pending?' We have to answer 'Yes.' That's a concern to the mortgage companies."

Reveal said the cost of repairs is unknown. City officials said the amount is significantly greater than the sum the city has on hand to deal with construction-related repair issues at Burlingame.

The homeowners' association filed suit in part because it doesn't want to end up charging its members a special fee to raise money to solve a problem for which another party in the suit is responsible, he said.

"The board needs to act in a fiduciary manner toward all 84 members," he said. "It's not good to hear that our members are unable to possibly sell or refinance because a lawsuit was filed. But we need to look after all 84 members."

Councilman Adam Frisch said it's possible that council members and Mayor Mick Ireland were briefed about the lawsuit in an executive session some months ago, but if that's the case, he doesn't remember the specifics. In any case, there hasn't been any recent discussion of the issue between city staff and the council, he said, other than the brief comments made publicly at the Feb. 11 council meeting after Milias brought it up.

"If it did come up in an executive session, it was more of an informative thing, and that was that," Frisch said.

He said that while homeowners might be frustrated - especially those who are trying to sell their units - the City Attorney's Office has decided that the best course of action is to require Shaw Construction to handle its defense of the lawsuit in lieu of forcing Aspen taxpapers to pick up the cost of repairs.

"The bank made its decision (not to lend to a potential buyer) because there is a lawsuit - not because the city of Aspen is a defendant in the lawsuit," Frisch said.

He added that the city officials are in an awkward position because they want to help the homeowners find a solution but they also believe that either Shaw or Certainteed is the responsible party and that the solution ought to come from them.

asalvail@aspentimes.com


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The Aspen Times Updated Feb 18, 2013 05:47AM Published Feb 18, 2013 01:57AM Copyright 2013 The Aspen Times. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.