HOA to settle with modular home company

Jan 14, 2024

The Fairway Pines homeowners association will pay Kopper Creek Homes $40,000 to avoid litigation, according to information presented by HOA board members at a meeting this week.

The settlement is expected to resolve a conflict over the Log Hill Mesa HOA's enactment of a moratorium against modular-built, or factory-built, homes.

The moratorium adopted in June was in response to loud opposition by some residents to modular homes being built in the subdivision, sold by Montrose-based Kopper Creek. While the golf course community's covenants banned mobile homes, they didn't prohibit homes built in factories, transported to the lot and assembled on permanent foundations. Some claimed factory-built homes were of lesser quality, but Kopper Creek argued they had to meet even higher standards than those required of stick-built homes. Despite an informational session with HOA members and the architectural review committee, demand continued for a ban on modular homes. The conflict reached a head when an anonymously circulated petition and flyers claimed modular homes didn't represent the community's values, alleging "trailers" would be allowed.

The HOA board voted 3-0 to adopt the moratorium in June, with a stated goal of postponing more possible applications for modular construction until one of the homes was completed.

But by September, the board had received correspondence from an attorney representing Kopper Creek threatening litigation. It's not clear exactly how many meetings were held with the HOA board about this, though there have been at least three executive sessions between the board and legal counsel outside of regular meetings that were not noticed to the membership.

HOA Board President Randy Mathis announced the settlement at the meeting Tuesday night, saying the board would also have a release saying the moratorium was lifted and the HOA would continue permitting modular methods of construction.

The board adopted the moratorium at a tumultuous time in which some members advocated for recalling former HOA board member Mark Hartman, whose son works for Kopper Creek. Hartman's fellow board members voted to prevent him from voting on the moratorium proposal, saying he should have disclosed his connection to Kopper Creek at the time.

Facing a recall election to remove him from the board, Hartman later resigned from his position.

The board leadership has almost completely turned over since then, and Mathis is the only remaining board member from the time of the moratorium adoption. The two other board members who adopted the moratorium, Jim Couto and Ed Pecis, have left the board.

Kopper Creek Homes co-owner KC Heister said the company had a customer cancel an order last year during the conflict and the moratorium.

"When they canceled, we were actually harmed," he told the Plaindealer in November. "We lost that project and gave them all their money back even though we had completed the engineering. We felt, at that time, we had been damaged."

Other projects had already been presented to the architectural review committee, and were told they couldn't continue due to the moratorium, but were later allowed to proceed. Heister said even though those projects were allowed to proceed, they faced increased costs due to the delay caused by the moratorium.

Heister said his company worked with attorneys to ask the HOA board in October to issue an apology, to participate in education and correct the misinformation that had circulated, and pay damages. It's not clear whether those other stipulations are part of the settlement.

Heister said his company has also faced scrutiny from potential customers, due to the accusations circulated by the anonymous petitioners who opposed the modular homes in Fairway Pines.

"We basically have been inundated with calls about what's wrong with our homes and why can't they build them on Log Hill?" he said.

HOA board members didn't provide many details at Tuesday night's membership meeting, other than to say they hoped the settlement would be finalized by next week.

When asked why the settlement was reached, board member Bob Del Rossi said the HOA was acting on advice from its attorney.

"We did make a decision based on the advice of our legal counsel, that this would be the cheapest, safest, most effective way for us to move forward from the situation," he said.

In the meantime, the HOA's architectural review committee is revising its standards. HOA board members said those standards would not single out modular construction.

Modular or factory-built homes have become more popular in Colorado as home-building prices and materials costs have climbed and construction labor shortages persist.