This is part 14 of Randy Sawyer’s 16 Part series on UCIOA. You can read previous posts here.
Section 88, subsection (e)
§88(e) – If a settlement agreement is finalized between the committee and the declarant, the declarant controlled executive board shall have the authority to execute such an agreement and to release the declarant from all liability with respect to the completed common elements and improvements, subject to such terms and conditions as may be acceptable to the committee. Any such settlement agreement and release shall be legally binding upon the association and the unit owners, provided that its form is approved by the independent legal counsel retained by the committee on behalf of the association.
This provision is remarkable and reveals the true intent of the builder’s lobby for inclusion of Section 88 into UCIOA. Subsection (e) of Section 88 reveals that Section 88 in its entirety is intended to give developers the ability to force early inspections and negotiations over common elements long before transition occurs so that the developer can pressure unprepared and financially hampered independent unit owners into settling claims and giving the developer a release. This provision is the developers’ weapon to avoid costly litigation, which to date has been the only true protection for hapless consumers who are damaged by shoddy builders.
This provision actually grants the developer controlled board the power to bind the Association to a settlement agreement releasing the developer from liability for construction defects in common elements. In short, it allows the developer to give itself a release and indemnification from the Association before transition even occurs. Never has there been a clearer conflict of interest. The last sentence is also quite suspect. Why is the legal counsel for the independent unit owner committee only allowed to approve the “form” of the agreement and release as opposed to its content?