D. R. HORTON AGREED TO PAY A HOMEOWNER'S group $39.5 million last summer over problems at a 246-unit condo development in Superior, Colo., a town just outside of Boulder.

According to The Denver Post, the complex, Summit at Rock Creek, had numerous defects, including cracked foundations and walls and poor land drainage.

Building inspectors hired by the homeowners removed the trim from 1,800 windows and took roughly 10,000 photographs, finding gaps in siding that allowed extensive water leaks, according to Scott Sullen, the attorney who represented the homeowners.

HARD EVIDENCE: Improperly installed flashing caused water to seep through the windows at a condo complex near Boulder, Colo.
HARD EVIDENCE: Improperly installed flashing caused water to seep through the windows at a condo complex near Boulder, Colo.

Sullen says D.R. Horton acknowledged the problems and “to their credit” agreed to settle. The attorney says the bulk of the settlement, which is the largest residential defects case in Colorado history, will go to making repairs.

The lawsuit was filed just two months before a state law was passed that limits the damages homeowners may collect for residential defects. The new law lets property owners recover the value of their property, the cost of replacement, or the cost of repair—whichever is least. The law also places a $250,000 cap for pain and suffering and a $250,000 cap for fraud.

“This was one of the last settlements under the old statute,” says David McLain, the attorney for D.R. Horton from the firm Higgins, Hopkins, McLain, and Roswell in Lakewood, Colo., who adds that unless the state plaintiff's bar can get the state legislature to reverse itself on capping damages, the D.R. Horton settlement should be one of the last large settlements for some time.

An attempt by Sullen to reverse the law and remove the cap failed last year.

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