COLORADO SPRINGS —Colorado’s most destructive wildfire could fan the flames of a new conflagration — an unprecedented test of a subdivision’s power to direct rebuilding with covenants.
As cleanup from the Waldo Canyon fire begins, officials in the decimated Mountain Shadows community are uneasy about how the neighborhood will look when it rebuilds.
Before the fire swept over a ridge June 26 and destroyed 346 homes, Mountain Shadows was a tidy suburban community with a mix of custom houses, patio homes, condos and townhouses whose appearance and manicured landscapes were dictated by covenants.
Now, some fear that property owners could ignore the covenants, hiring dozens of architects and builders, and creating a future mishmash of homes with clashing designs and materials.
Never before has a covenant-controlled community in Colorado faced such devastating losses and the prospects of rebuilding from scratch, real-estate and legal analysts say.
Most Colorado wildfires consume sparsely populated areas where destroyed homes tend not to be part of homeowners associations.
In subdivisions, enforcement of covenants typically involves minor issues such as types of vegetation or paint colors. Now, homeowner groups will be put to the test to enforce the major components of home sizes, setbacks and designs.
“It’s an enormously complex situation,” said Colorado Springs attorney Lenard Rioth, a specialist in homeowners associations and covenants. “There are going to be challenges at all levels of the rebuilding process.”
Community leaders expect that a spirit of cooperation born from shared loss will help guide Mountain Shadows’ renaissance. But they also envision a worst-case scenario in which neighborhood design-review groups will be powerless to enforce covenants and rein in rebellious property owners.
One idea being floated is to create a special district at Mountain Shadows that would have greater authority than individual neighborhood groups to dictate and enforce design guidelines as the community rebuilds.
The district possibly would be funded by a mill levy. In tax-wary Colorado Springs, its implementation could be a challenge for proponents such as resident Chuck Fowler.
Fowler peered at the charred, twisted hulk of his dishwasher, in what used to be the kitchen of his now-nonexistent home, and contemplated the future of Mountain Shadows.
“I’ve never seen a set of covenants that deal with the situation we’re going to have to confront,” he said. “We’re all still grieving from this catastrophe, but we’re going to have a bigger challenge in protecting the value of this community as we move forward.”
Fowler in 1985 was a pioneering resident of the Parkside subdivision at Mountain Shadows. He now works as a consultant to homeowners associations and manages the Parkside HOA.
As the Waldo Canyon fire roared down the hillsides west of Colorado Springs, Parkside bore the brunt of the inferno. One hundred forty of Parkside’s 178 homes burned to the ground.
On a visit last week to his neighborhood, Fowler surveyed a swath of devastation that left nothing but naked concrete foundations, skeletons of blackened ponderosa pines and a random scattering of household knickknacks buried in piles of ashes.
Fowler said that despite the ruin of the subdivision, Parkside is in a relatively advantageous position compared with other communities at Mountain Shadows.
That’s because Parkside and four other subdivisions operate with managed HOAs that maintain control over covenants. Many of the remaining 26 subdivisions have homeowner volunteers who staff committees known as approving authorities.
A dues-funded HOA has a treasury that, if necessary, can cover the cost of taking legal action to enforce covenants.
Approving authorities, on the other hand, typically have no money and must rely on the voluntary compliance of residents to abide by covenant provisions.
“Having an approving authority without financial resources to support your governing documents is really no authority at all,” Fowler said.
A homeowner could file suit against a neighbor for an alleged violation of covenants, but the legal costs would need to be covered by the homeowner.
“Our concern is that somebody will say they’re not building what they (previously) had — that they want to do something different. They might just ignore the covenants,” said Francine Hansen, president of the Mountain Shadows Community Association.
Hansen said a failure to abide by covenants could have long-term repercussions on Mountain Shadows housing values, both for homeowners whose houses were spared in the fire and for those rebuilding.
“There could be some conflict there,” said Ron Throupe, a real-estate professor at the University of Denver’s Daniels College of Business. “Does the HOA update the ground rules or keep them the same? Do you have a bunch of different builders building different houses? There’s going to be some friction.”
Fowler’s proposal for a special district to implement and enforce design standards throughout the community is in its infancy. It would need to go through a series of governmental approvals, then to a vote of all property owners in Mountain Shadows. The district also could take on additional responsibilities, such as improvements and maintenance of public areas not covered by HOAs.
“We need to determine which will create more angst — paying more property taxes or having a poorly structured organization and the potential for degraded property values,” Fowler said. “I think it’s the right thing to do for the future.”
Steve Raabe: 303-954-1948, email@example.com or twitter.com/steveraabedp