HOA Bankrupts After $1.4M Verdict Over Dangerous Mold Crisis

UPDATE: A condominium association in Parker, Colorado has filed for bankruptcy following a staggering $1.4 million court verdict stemming from a serious mold issue that left a resident’s home uninhabitable. The verdict, delivered by Judge Robert Lung on September 5, 2023, highlights years of negligence that turned Kristina Corcoran’s once-beloved residence into a “dangerous nightmare.”

Corcoran, 55, purchased her two-story home in 2015. By 2017, she began noticing severe water intrusion linked to poor construction practices, including inadequate waterproofing and faulty grading. Despite her repeated complaints, the Highlands at Stonegate Condominium Association failed to take adequate action, worsening the mold crisis that has now consumed a third of her home.

The court ruled that the HOA’s inaction directly led to Corcoran suffering from mold-related health issues, including infections and chronic pain. “While Ms. Corcoran knows the danger of staying in the residence, she cannot move out because she lacks the financial resources to rent or purchase a second home,” Judge Lung stated.

In a desperate move, Corcoran began garnishing the HOA’s bank accounts in November, prompting the association to seek Chapter 11 bankruptcy on December 5, 2023.

“Our HOA’s bankruptcy filing shows how years of poor decisions and a lack of transparency have hurt our community,” said resident Meredith Norton.

The HOA’s president, Sherri Rosselot, claimed that $1.2 million in funds are currently frozen due to Corcoran’s garnishment efforts, complicating their ability to pay the judgment. The association estimates it will also owe an additional $300,000 in attorney fees to Corcoran’s legal team, which could further cripple its financial standing.

Residents are expressing frustration over the leadership’s decisions. They argue that a small group has made significant choices affecting the entire community without proper oversight. “It appears the HOA and management company feel like they are in absolute control and can make terrible decisions that will negatively affect homeowners,” said resident Michener.

As the situation develops, homeowners are left in limbo, facing uncertainty about their property values and living conditions. The outcome of the HOA’s bankruptcy will significantly impact all residents of the Highlands at Stonegate community.

The court’s ruling and the HOA’s subsequent actions raise critical questions about accountability and transparency in homeowner associations. This case exemplifies the potential consequences of neglecting community standards and the importance of protecting residents’ rights.

Residents and observers are encouraged to stay tuned for updates as the legal and financial ramifications unfold.