Second-home owners lose first round in Aspen housing battle |

Second-home owners lose first round in Aspen housing battle

Carolyn Sackariason
The Aspen Times
Aspen, CO Colorado

ASPEN ” City and local housing officials are claiming victory in their lawsuit against two second-home owners who have refused to house an employee on their property.

District Court Judge Denise Lynch last week denied California residents Larry and Mara Lawrence’s motion to dismiss a lawsuit levied against them in December by the Aspen-Pitkin County Housing Authority (APCHA).

The suit asked the court to enforce a deed restriction placed on the Lawrences’ employee dwelling unit, which is attached to their home at 985 King St. in Aspen.

“This is a huge victory for the city and the affordable housing program,” City Attorney John Worcester said Tuesday.

But Herb Klein, the Lawrences’ Aspen-based attorney, said the court’s ruling doesn’t mean the case is over, and he views it as only a setback.

“We are allowed to continue the case and defend it,” he said. “Any time you can keep a case alive, it’s a victory.”

At issue is whether the Lawrences have a right to use the unit for their own personal use ” in this case a home entertainment center ” or house a local employee, per the agreement by the developer and the city government when the property on the Astor subdivision was originally developed in 1980.

At the time, the developer agreed that three of the six units would be subject to deed restrictions in return for the city to exempt the property from its growth restrictions.

The developer agreed then to designate the unit, now owned by the Lawrences, to be occupied by low-, moderate- and middle-income individuals.

Two other deed restrictions were placed on the property before the Lawrences purchased it in 1996 for $1.8 million.

The housing authority learned in 2007 that the Lawrences were not leasing the deed-restricted unit and sent them a notice of violation at their La Jolla, Calif., home. After no response, the authority sued.

Klein is arguing the housing office has no authority to impose rent controls under Colorado’s anti-rent control statute. He said he believes there’s still merit to that argument and will make the case in court.

“At trial, there’s a lot of information and facts and other arguments,” he said. “I think we can convince a judge we have a case.”

But in the court’s opinion, Judge Lynch disagrees with Klein’s argument because the subdivision agreement was executed in 1980, one year before the state’s anti-rent control statute was enacted.

“The court has not found, nor have defendants cited, any statutory language or other authorities that would reveal a legislative intent to apply the statute retroactively,” Lynch wrote in the opinion. “The court agrees with [APCHA] that the statute does not prohibit enforcement of the rent controls at issue because the subdivision agreement created a restrictive covenant that may be enforced by [APCHA].”

And it’s that opinion that makes Worcester believe the case is over.

“It’s toast,” he said of Klein’s argument. “It’s a foregone conclusion” that the court will side with the housing authority.

“There are no facts in dispute,” he added. “It’s an excellent opinion.”

The deed restriction was not unilaterally imposed by a government but was rather entered into voluntarily by the developer, therefore the rent controls are not precluded by the statute, city and housing officials argue.

The court’s decision will likely have implications on more than a half-dozen active lawsuits filed by the housing authority against other property owners who are allegedly violating deed restrictions.

“If this had gone the other way, it would have been disastrous,” Worcester said.

Tom Smith, the lawyer representing the housing authority, said the court’s decision effectively shoots down other anti-rent control arguments.

“The housing authority currently has a number of cases where the same defense has been raised, so this could have some implications as other judges look to this decision,” he said.

Housing Director Tom McCabe said while the court has yet to order the Lawrences to house an employee, the ruling is favorable.

“It’s not over until it’s over but it’s likely to go the same way again in court and APCHA will prevail,” he said. “It would be smarter for them to deal with this now and get it over with.”