UPDATE: A homeowners association (HOA) in Parker, Colorado has plunged into bankruptcy after a staggering $1.4 million court verdict linked to a severe mold crisis. The ruling comes after years of neglect towards resident Kristina Corcoran, whose once-dream home turned into a “dangerous nightmare,” according to Judge Robert Lung.
The Highlands at Stonegate HOA, which manages 446 condos built between 2004 and 2006, is now facing dire financial consequences. Judge Lung’s verdict underscores the severe health ramifications for Corcoran, 55, who can no longer participate in her active lifestyle due to debilitating mold exposure. Corcoran’s home, purchased in 2015, became infested by toxic mold after chronic water intrusion went unaddressed by the HOA.
By 2017, Corcoran noticed alarming signs of water damage, including inadequate waterproofing and poorly functioning drainage systems. Despite her repeated complaints, the HOA failed to act decisively, only attempting a temporary fix by placing plastic over wet carpets, which exacerbated the mold problem.
“While Ms. Corcoran knows the danger of staying in the residence, she cannot move out because she lacks the financial resources,” Judge Lung stated in his ruling. A staggering one-third of her home is now deemed inaccessible due to the toxic mold, and much of her belongings must be discarded.
In a desperate response to the ruling, the Highlands at Stonegate HOA filed for Chapter 11 bankruptcy on December 5, 2023. The president of the condo board, Sherri Rosselot, indicated that the garnishment efforts have left around $1.2 million in funds frozen, jeopardizing the HOA’s ability to maintain community operations.
Corcoran’s legal team, including attorneys Michael Curry and Theodore Wells, is pursuing the association for additional attorney fees, anticipated to reach $300,000. The HOA asserts that its insurance companies should cover the ruling, but there is no timeline on when or if those funds will be released.
Residents of the community are expressing outrage. “Our HOA’s bankruptcy filing shows how years of poor decisions and a lack of transparency have hurt our community,” said resident Meredith Norton. Fellow resident Michener added, “It appears the HOA and management company feel like they are in absolute control and get to make terrible decisions that will negatively affect homeowners.”
As the situation develops, the future of the Highlands at Stonegate remains uncertain. Residents are calling for significant changes in the management structure to ensure accountability and transparency moving forward.
This unfolding crisis highlights the urgent need for HOAs to prioritize resident welfare and address issues promptly to avoid catastrophic outcomes. Residents like Corcoran are left to deal with the fallout of systemic failures, raising critical questions about the responsibilities of community associations.
Stay tuned as this situation develops, with potential ramifications for homeowners associations across the nation.
