HOA wins $13.5M in arbitration against DR Horton 


This is a construction and design defect case that boggles the mind.

A D.R. Horton subsidiary homebuilder in Colorado constructed a 1200 home subdivision roughly one decade ago. Apparently, the homes were built on land with a high water table, so home designs included sump pumps and a drainage system designed to carry ground water away from basement foundations. According to the news release below, excess groundwater from the sump pits was supposed to be carried out to the streets, where it would then follow stormwater flow paths out of the community.

But when the underdrain system was constructed, drain clean outs were covered over by asphalt roads, hidden from view. The HOA, of course, had no idea that the clean outs existed, and that it was their responsibility to regularly maintain them to prevent clogs and malfunction of the system. In 2014, the HOA discovered the problem when a homeowner reported voluminous amounts of water flowing into her basement from her sump pit.

How in the world did this plan ever get approved by the local building code inspector? Who, if anyone, was responsible for signing off on construction and issuing certificates of occupancy?

What was the homebuilder thinking? How were the homeowners supposed to know there should be vertical clean out points on a drainage system they did not even know about?

Of course, the HOA had to retain attorneys when D.R. Horton failed to take responsibility for the problem. The case recently went to Arbitration, where the HOA was awarded more than $13.5 million to redesign and rebuild the system.



Benson, Kerrane, Storz & Nelson receives $13,572,000 Arbitration Award Against National Homebuilder D.R. Horton for Faulty Underdrain

AURORA, Colo., April 26, 2017 /PRNewswire-USNewswire/ — A single-family home HOA has received a final arbitration award of $13,572,000 against a subsidiary of Texas-based homebuilder D.R. Horton related to improper design and construction of the community’s underdrain system. The HOA’s attorneys, Benson, Kerrane, Storz & Nelson (“BKSN”), of Golden, Colorado, believe this it to be one of the largest residential construction defect arbitration awards in the state’s history.

In 2014, a homeowner reported to the HOA that hundreds of gallons of water were coming up through her sump pit and flooding her basement. While investigating the damage, the HOA learned for the first time that the homes in the ten-year-old community were connected to an underground drainage system. This underdrain system was intended to collect groundwater from the foundations of the homes and carry the water under the streets and out of the community, but was failing due to improper design, construction and lack of maintenance.

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