This much we know: The Parkside at Mountain Shadows Owners Association has no insurance policy on the neighborhood's common areas and assets, including its cul-de-sac roads and sprinkler system.
But post-Waldo Canyon Fire, that's where the clarity ends.
According to homeowner Terry Rector, HOA manager Chuck Fowler first told him that the insurance policy burned in the fire. When asked if he could simply get a copy from the insurance broker, Fowler changed his tune and said there really had been nothing to insure: The HOA, he said, doesn't own anything.
Fowler then was confronted with an assessor's list of 23 HOA-owned roads. At that point, he claimed that buying insurance had been too expensive, so the HOA had decided to self-insure.
Now, asked for proof of that decision, Fowler has taken to asserting that the cul-de-sacs are simply "uninsurable." And as for the sprinkler system, he says homeowners will have to fix the hardware on their properties.
A legal dispute is brewing, but homeowners might have to cough up tens of thousands of dollars to replace property seemingly owned by the association, money beyond their $113 per month in dues.
Rector, an attorney who lost his home along with 140 others, including Fowler, in Parkside on June 26, is furious and wants to know who's responsible. He's already called for the board's resignation, even though its members aren't named on the association's website, and Rector doesn't even know who they are.
When the Waldo Canyon Fire swept into Mountain Shadows, four of five Parkside homes were decimated.
Homeowners started facing myriad questions about addressing their losses. And Rector happened to wonder about the cul-de-sacs, after observing that fairly new concrete driveways were heavily damaged by the fire.
"No one's out there adjusting the claim on the common areas," Rector says. "Why? There's no insurance."
A covenant states the HOA must buy property insurance covering "all insurable improvements located upon the Common Area and insurable improvements which are the responsibility of the Association to maintain but which are located on the Lots." Included in the insurance requirement is "loss or damage by fire."
He also points to another covenant stating that the HOA board can't opt out of buying insurance without a two-thirds vote of the owners. No one will produce proof of that vote, says Rector, a resident since 1993.
After several rounds with Rector, Fowler, who's lived there since 1985, used HOA money to hire a lawyer to e-mail Rector. In that e-mail, Kelly Dude chastises the resident for "creating even more angst and confusion." He also states the HOA has self-insured — meaning it's kept a savings account for losses — because the insurance carrier deemed the cul-de-sacs "uninsurable improvements." Dude notes the sprinklers aren't insured because "it was not clear that the Association owned the system."
He then claims the roads weren't damaged by the fire, though he says Colorado Springs Utilities must repair holes dug during service restoration.
Fowler also claims the roads weren't damaged on June 26: "Visually, the cul-de-sacs don't look any different today than they did before the fire," he says, though he admits no expert has examined them.
At a cost Fowler can't recall, the association replaced the roads four years ago, after saving up for 24 years. The HOA can't afford to do it again so soon, he says, even being self-insured.
Who will pay?
Rector says the HOA's insurance broker claims to have asked officials every year — when renewing their policies for liability and other coverages — whether the HOA owned property that needed to be insured.
The answer was "no," Rector says. He adds that when asked if roads or sprinklers could have been insured, she said "yes." (The broker refused to speak with the Indy, citing privacy issues.)
Now, homeowners appear to be on the hook.
"The sprinkler system was situated on the owners' property," Fowler says, "and so it was the interpretation of our consultant that there was nothing in our governing documents that gave ownership of the sprinkler system to the HOA, only an obligation to repair it, operate it — so that's what we did. That's likely an extension of the individual property owners' insurance."
Yet, he says, homeowners haven't been told that their insurers should factor that in. And the HOA on its website claims responsibility for "maintenance, repair and replacement for common area property," including sprinklers.
Bill Guman, who runs a landscape architecture firm, gave a ballpark figure to install sprinklers of $2,000 to $2,200 per home site.
Fowler, who declines to discuss particulars citing possible legal action, admits the board is considering a claim against the HOA's officers' and directors' personal-liability insurance that could, in a roundabout way, cover fire losses.
But the longtime businessman and chair of the "City Committee," an unofficial advisory group to city government, says the dispute is a distraction.
"This is a time Parkside needs to come together as a community and figure out its problems and its best path forward," Fowler says. "It's always disturbing when you have an owner that puts an HOA in the position Mr. Rector puts us in."
Says Rector: "My goal is not to be the muckraker. What I'm saying is, the covenants say this, and they say it twice, and they don't put in the fudge factor. They make it mandatory.
"Maybe they got a two-thirds vote [to self-insure]; let's make a big announcement to everyone. If that happened, fine, just give that to me."