Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
One of the things that I have long enjoyed when
I get into conversations or debates with lawyers, and I
mean with with real lawyers, with good lawyers, is that
they never take it personally. And I love that you
can you can have a debate with a lawyer about
something and just be completely on opposite sides of something
(00:22):
and then just go get a beer and talk about,
you know, how the Avalanche shouldn't have lost that game.
And I've always appreciated that And one guy who surely
embodies that is Mike Berg, founding partner shareholder in the
Burg Simpson Law Firm, of course. And it's interesting because
you know, I love that Burg Simpson is a partner
(00:44):
for this.
Speaker 2 (00:44):
Show, and many of you don't know that when Mike.
Speaker 1 (00:49):
And I talk privately, we probably disagree about a third
of the time, and I'm never worried about it because
it's just it's about ideas. So with that long introduction,
we're to talk about some legislation. So first, Mike, good morning,
and thanks for being here.
Speaker 3 (01:05):
Good morning Russ. We can agree the ab shouldn't have
lost that game for.
Speaker 2 (01:09):
Sure, exactly right. So I've got a headline here.
Speaker 1 (01:13):
I'll just share the headline, and I want to open
it up to you to explain to my listeners what
we need to know. Here's the headline, Colorado Construction Defects
Reform bill reaches Governor's desk, aims to boost affordable housing.
Speaker 2 (01:27):
So I realize you have an opinion.
Speaker 1 (01:29):
You can describe this however you want to, and if
I find any bias in your description, I will challenge that.
Speaker 3 (01:36):
Great. So, first of all, I think this bill is
pretty draconian and really does not fix the affordable housing issue.
The affordable housing issue is very complicated and it's not
a result of construction defect the builders they've come with
that theory. And the problem is I represent, as you
(02:01):
know and had for years, Richmond American and other developers
and builders, and if you build it right, then there's
not an issue. Unfortunately, there are builders out there that
don't build it right. And when someone pays, you know,
for the probably their biggest purchase ever for a home,
(02:23):
and it's not built right and it's got defects, they
should be able to have a remedy. More specifically, in
terms of the bill, it really doesn't stop construction defect litigation,
but it does slow it down, and it makes it
more expensive, which I don't think is in the best
(02:43):
interest of the of the consumers and the homeowners. And
so this bill itself. For example, now in a homer
association or a condo association, you now have to have
sixty five percent that are rather than fifty percent. Well,
that is going to take more time to get that
(03:04):
kind of approval. And one of the issues and I
don't want to keep going on and on because I
want you to be able to counter it or whatever,
but one of the problems you have is that when
you have a significant construction defect in a condo project,
that's that's consistent through all the condos or through the
homeowners' association, all the homeowners have a problem with her.
(03:27):
If it's a soil problem and now you've you've got
heaving and all kinds of other problems. Is that the
reality is that it's going to take more time to
get that kind of sixty five percent. And the builders say,
oh my god, if you sue, then you're going to
(03:48):
have to reveal if you want to sell your home
that it has this defect. Well, of course you would,
that's what's required. But if you don't fix the defect,
then you're stuck with the defective home. And so I
could go through more details.
Speaker 2 (04:03):
All right, yeah, the problem.
Speaker 1 (04:06):
But all right, so part of my focus on this
has long been actually the the condominium market, right and
and sort of. Denver famously has had a shortage of
condominiums and for real estate that looks like that they've
(04:26):
been apartments rather than condominiums. And a lot of people
have said here on the show and elsewhere that a
primary reason that condominium builders will not build what we
might call affordable condominiums is because of construction defect risk
and because of the cost of the insurance to to
(04:51):
deal with the possibility that there might be a lawsuit.
Let's say, from from you now, I mean you represent
on the other side, you represent large, high quality firms
that are.
Speaker 2 (05:01):
Many of which are building single family homes. I want
to focus on the condo thing for a minute.
Speaker 1 (05:06):
Because I think that's a legit argument, a legit a
legit problem with the construction defects, and the bill seems
to limit in a way that I approve of what
you can sue for the summary of the bill says
you can sue for damage that substantially affects the functionality
of a system or the safety of real or general property,
(05:26):
and it goes on. It goes on from there. But
I think those kinds of limitations are are legit, and
there are not every lawyer has your scruples either. There
are lawyers who will just sue for anything.
Speaker 3 (05:40):
Right. And let me first deal with the first part,
which is, I agree with you there is a problem.
But to me, what we ought to do is pass
the law for the insurance industry to come clean with
their argument that it becomes too expensive to ensure these projects,
these pando projects. Because right now now, uh you know,
(06:01):
insurance companies they're they're able to and people who have
had claims understand this is that they're going to go
ahead and increase the premiums that are going to be
charged back to the consumer. They they're not going to
take that lossos. But I'd like to know what what
the what the profit margin is, you know, if we
have that as a law, that they had to actually
(06:24):
come clean with it. So that's the first issue. The
second issue is that language you just read, What does
that really mean? How is that going to be interpreted?
What if you have a landscape that is done improperly,
and the water is now coming into your basement and
you've got flooding in your development. Or what we see
(06:45):
in Florida or where we do a lot of construction
defect is that they haven't water waterproof the curtain. So
when you get a big rain, it comes through the windows,
it goes through the curtain, and now everyone's got you know,
law are into their condos.
Speaker 2 (07:01):
Well, why is their window open?
Speaker 3 (07:04):
It's just it's not sealed, right, the curtain's not right.
Speaker 2 (07:12):
All right.
Speaker 3 (07:13):
I'm just telling you that those are the things we see.
And now the question is, forget about that example, but
what is from a legal standpoint, going to meet the
the that law that passed, which they haven't defined what
(07:33):
that really means? What kind of defects are the ones
that impact there an.
Speaker 1 (07:40):
Ability to live or I guess folks like you will
be the ones to test that in court cases that
end up perhaps setting the precedents that set some of
these definitions. Right, I've only got I've only got a
few seconds left eye.
Speaker 2 (07:55):
I suppose Mike that well, at this point, I don't
know if the governor has signed it, but he's definitely
going to sign it, and.
Speaker 1 (08:04):
And and I guess we'll just see how it how
it plays out. And maybe I'm a little too optimistic
and maybe you're a little too pessimistic.
Speaker 3 (08:12):
Could be, but I also will see whether they actually
build more condos. As both of this, I think I
have my doubts, but I appreciate getting on and being
able to at least give us some of my opinions. Uh,
and we'll see what happens in the future.
Speaker 1 (08:30):
You're You're always welcome on the show when you have
opinions about things that are in the news, Mike, that
are that relate to your business rather and and things
you know about better than almost anybody else. So, Mike
Berg is a shareholder at Burg Simpson berg Simpson dot com.
You hear me talk about them frequently on the show.
But that's not actually why Mike's here. He's here as
a as a true expert on this on this subject.
(08:52):
Thanks for your time, Mike, always appreciate it.
Speaker 2 (08:54):
Thank you.
Speaker 3 (08:55):
Ross
One of the things that I have long enjoyed when
I get into conversations or debates with lawyers, and I
mean with with real lawyers, with good lawyers, is that
they never take it personally. And I love that you
can you can have a debate with a lawyer about
something and just be completely on opposite sides of something
(00:22):
and then just go get a beer and talk about,
you know, how the Avalanche shouldn't have lost that game.
And I've always appreciated that And one guy who surely
embodies that is Mike Berg, founding partner shareholder in the
Burg Simpson Law Firm, of course. And it's interesting because
you know, I love that Burg Simpson is a partner
(00:44):
for this.
Speaker 2 (00:44):
Show, and many of you don't know that when Mike.
Speaker 1 (00:49):
And I talk privately, we probably disagree about a third
of the time, and I'm never worried about it because
it's just it's about ideas. So with that long introduction,
we're to talk about some legislation. So first, Mike, good morning,
and thanks for being here.
Speaker 3 (01:05):
Good morning Russ. We can agree the ab shouldn't have
lost that game for.
Speaker 2 (01:09):
Sure, exactly right. So I've got a headline here.
Speaker 1 (01:13):
I'll just share the headline, and I want to open
it up to you to explain to my listeners what
we need to know. Here's the headline, Colorado Construction Defects
Reform bill reaches Governor's desk, aims to boost affordable housing.
Speaker 2 (01:27):
So I realize you have an opinion.
Speaker 1 (01:29):
You can describe this however you want to, and if
I find any bias in your description, I will challenge that.
Speaker 3 (01:36):
Great. So, first of all, I think this bill is
pretty draconian and really does not fix the affordable housing issue.
The affordable housing issue is very complicated and it's not
a result of construction defect the builders they've come with
that theory. And the problem is I represent, as you
(02:01):
know and had for years, Richmond American and other developers
and builders, and if you build it right, then there's
not an issue. Unfortunately, there are builders out there that
don't build it right. And when someone pays, you know,
for the probably their biggest purchase ever for a home,
(02:23):
and it's not built right and it's got defects, they
should be able to have a remedy. More specifically, in
terms of the bill, it really doesn't stop construction defect litigation,
but it does slow it down, and it makes it
more expensive, which I don't think is in the best
(02:43):
interest of the of the consumers and the homeowners. And
so this bill itself. For example, now in a homer
association or a condo association, you now have to have
sixty five percent that are rather than fifty percent. Well,
that is going to take more time to get that
(03:04):
kind of approval. And one of the issues and I
don't want to keep going on and on because I
want you to be able to counter it or whatever,
but one of the problems you have is that when
you have a significant construction defect in a condo project,
that's that's consistent through all the condos or through the
homeowners' association, all the homeowners have a problem with her.
(03:27):
If it's a soil problem and now you've you've got
heaving and all kinds of other problems. Is that the
reality is that it's going to take more time to
get that kind of sixty five percent. And the builders say,
oh my god, if you sue, then you're going to
(03:48):
have to reveal if you want to sell your home
that it has this defect. Well, of course you would,
that's what's required. But if you don't fix the defect,
then you're stuck with the defective home. And so I
could go through more details.
Speaker 2 (04:03):
All right, yeah, the problem.
Speaker 1 (04:06):
But all right, so part of my focus on this
has long been actually the the condominium market, right and
and sort of. Denver famously has had a shortage of
condominiums and for real estate that looks like that they've
(04:26):
been apartments rather than condominiums. And a lot of people
have said here on the show and elsewhere that a
primary reason that condominium builders will not build what we
might call affordable condominiums is because of construction defect risk
and because of the cost of the insurance to to
(04:51):
deal with the possibility that there might be a lawsuit.
Let's say, from from you now, I mean you represent
on the other side, you represent large, high quality firms
that are.
Speaker 2 (05:01):
Many of which are building single family homes. I want
to focus on the condo thing for a minute.
Speaker 1 (05:06):
Because I think that's a legit argument, a legit a
legit problem with the construction defects, and the bill seems
to limit in a way that I approve of what
you can sue for the summary of the bill says
you can sue for damage that substantially affects the functionality
of a system or the safety of real or general property,
(05:26):
and it goes on. It goes on from there. But
I think those kinds of limitations are are legit, and
there are not every lawyer has your scruples either. There
are lawyers who will just sue for anything.
Speaker 3 (05:40):
Right. And let me first deal with the first part,
which is, I agree with you there is a problem.
But to me, what we ought to do is pass
the law for the insurance industry to come clean with
their argument that it becomes too expensive to ensure these projects,
these pando projects. Because right now now, uh you know,
(06:01):
insurance companies they're they're able to and people who have
had claims understand this is that they're going to go
ahead and increase the premiums that are going to be
charged back to the consumer. They they're not going to
take that lossos. But I'd like to know what what
the what the profit margin is, you know, if we
have that as a law, that they had to actually
(06:24):
come clean with it. So that's the first issue. The
second issue is that language you just read, What does
that really mean? How is that going to be interpreted?
What if you have a landscape that is done improperly,
and the water is now coming into your basement and
you've got flooding in your development. Or what we see
(06:45):
in Florida or where we do a lot of construction
defect is that they haven't water waterproof the curtain. So
when you get a big rain, it comes through the windows,
it goes through the curtain, and now everyone's got you know,
law are into their condos.
Speaker 2 (07:01):
Well, why is their window open?
Speaker 3 (07:04):
It's just it's not sealed, right, the curtain's not right.
Speaker 2 (07:12):
All right.
Speaker 3 (07:13):
I'm just telling you that those are the things we see.
And now the question is, forget about that example, but
what is from a legal standpoint, going to meet the
the that law that passed, which they haven't defined what
(07:33):
that really means? What kind of defects are the ones
that impact there an.
Speaker 1 (07:40):
Ability to live or I guess folks like you will
be the ones to test that in court cases that
end up perhaps setting the precedents that set some of
these definitions. Right, I've only got I've only got a
few seconds left eye.
Speaker 2 (07:55):
I suppose Mike that well, at this point, I don't
know if the governor has signed it, but he's definitely
going to sign it, and.
Speaker 1 (08:04):
And and I guess we'll just see how it how
it plays out. And maybe I'm a little too optimistic
and maybe you're a little too pessimistic.
Speaker 3 (08:12):
Could be, but I also will see whether they actually
build more condos. As both of this, I think I
have my doubts, but I appreciate getting on and being
able to at least give us some of my opinions. Uh,
and we'll see what happens in the future.
Speaker 1 (08:30):
You're You're always welcome on the show when you have
opinions about things that are in the news, Mike, that
are that relate to your business rather and and things
you know about better than almost anybody else. So, Mike
Berg is a shareholder at Burg Simpson berg Simpson dot com.
You hear me talk about them frequently on the show.
But that's not actually why Mike's here. He's here as
a as a true expert on this on this subject.
(08:52):
Thanks for your time, Mike, always appreciate it.
Speaker 2 (08:54):
Thank you.
Speaker 3 (08:55):
Ross
The Ross Kaminsky Show News
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