Homeowner near Aspen takes HOA to court over $900k in fines
March 21, 2018
A dispute over $900,000 in fines that an exclusive neighborhood’s homeowners association outside of Aspen levied on a property owner has spilled into court.
Epic View LLC, the legal name for the entity that owns the property at 1000 S. Starwood Drive, where construction on a single-family home began in May 2007, filed a complaint against Starwood Homeowners Association last week in Pitkin County District Court.
Epic View’s suit contends it was wrongfully subjected to a series of miscalculated fines because it failed to finish the construction on time. Representatives of the Starwood association said Tuesday the construction well exceeded the 18 months projects are given for completion in the gated neighborhood off McLain Flats Road. The home has yet to receive its certificate of occupancy, which would signal its completion, they said.
According to the Pitkin County Assessor’s Office, the home has 18,951 of livable space and sits on 2.4 acres of land. The home has an actual value of $7.6 million, according to the Assessor’s Office.
“We look forward to getting a resolution and some type of compromise,” said Michael Solondz, who is the president of the HOA board. “The bottom line is, we’d like this finished both for the benefit of the residents and the community.”
Epic View was formed in June 2017, according to the Colorado Secretary of State’s office, and took possession of the property that same month through what’s known as a quit-claim-deed process. Pitkin County records show the property was conveyed to Epic View by Thomas Duckworth, whose name remains attached to the property’s tax bills.
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Attorney Corey Zurbach of the Aspen firm Oates, Knezevich, Gardenswartz, Kelly & Morrow P.C., declined to elaborate about specifics of the lawsuit.
“There was no mediation, and the discussions that were had were confidential,” he said.
Epic View has paid $420,000 toward the $900,000 in fines the HOA has issued, Zurbach said. The suit seeks a court order to waive the fines and refund the $420,000 to what it refers to as Epic View’s “predecessor,” in other words, Duckworth, a Chicago-area investor.
The suit also contends the Starwood HOA exceeded its authority by issuing the fines while singling out Epic View for the penalty charges.
When Starwood HOA issued final approval for the house project in December 2005, construction was to begin within 24 months of approval and be completed within 18 months of its start date, according to the association’s bylaws, the suit says. But there were no rules that “contained any fines, fees or other monetary penalties if a project was not completed within 18 months,” the suit says.
Construction was suspended in late 2008 before resuming in mid 2010 “due to unfavorable economic conditions commonly referred to as the Great Recession,” says the suit.
Additional construction delays came from “obtaining approvals from Pitkin County which were beyond Epic’s predecessor’s control,” says the suit, noting that the then-homeowner was seeking LEED certification for the home as part of “an overall plan designed to reduce its environmental impact.”
The suit goes on to say that the construction project’s impacts on the neighbors were mitigated by the creation of a forest of 20-foot-tall evergreen trees and 25-foot-tall aspen trees surrounding the home site.
Meanwhile, in May 2012, the HOA board, through the creation of a “secret committee,” created new rules regarding fines and how they are calculated for construction projects running past 18 months, alleges the suit.
Starwood issued the first fine, $60,000, against the homeowner in March 2014; a $120,000 fine was issued in March 2015; and a third fine of $240,000 came in March 2016, the suit says.
The homeowner “mistakenly” paid those fines, believing the HOA would try to stop the project while under the assumption the penalties were related to HOA rules from 2004. The homeowner refused to pay the $480,000 fine charged by the HOA in March 2017, the suit says.
Solondz, however, said the committee was hardly secret, but was formed “at my direction at the time because there were complaints from neighbors” about the ongoing construction.
“This is a very unique situation,” he said. “The end goal is to really have them finish the house. We’re going on 11 years, and you have to address the neighbors’ concerns.”
He added: “We’ve never had a house go on this long. Sometimes we’ve had houses go two years, two-and-a-half years.”
Paul Taddune, Starwood’s HOA attorney, said the matter has been referred to the association’s insurance carrier for legal defense. Taddune said he cannot participate as counsel in the suit because he is a potential witness to the case.
The suit seeks a jury trial and makes eight claims for relief, including breach of fiduciary duty, breach of contract, and unjust enrichment. It also asks the court to decide whether the rules the HOA set in 2012 regarding fines for construction delays were applicable to the home that went under construction in 2005.