Proposed Colorado Construction Defects Law Prompts Debate

A proposal for a new construction defects law in Colorado has spurred debate along party lines. Democrats in the Colorado State House of Representatives want to include provisions for affordable housing, while Republicans want to limit the number of construction defects lawsuits for the state’s home builders. The bill, labeled SB 177, passed through the state Senate by a vote of 24 to 11 and now moves on to the House. If the House votes for the bill, Governor John Hickenlooper’s signature will pass it into law.

Details of Proposed Construction Defects Law

The bill seeks to add more modifications to a 2001 construction defects law. The bill calls for homeowners’ associations to seek arbitration with home builders before filing a construction defects lawsuit. The association board must also send notifications to all member homeowners that the board is considering such a lawsuit. The disclosure notice must also include the financial details and expected duration of the case. The law would also require the association board to get written consent from a majority of homeowners before filing their construction defects lawsuit.

House Speaker Calls Construction Defects Law “Terrible”

Although the Senate bill gained several votes from key Democrats, its battle for passage may prove much tougher in the House. Colorado Speaker of the House Dickey Lee Hullinghorst (D-Boulder) has openly opposed the potential changes in the state’s construction defects law. She has been quoted as calling the proposed construction defects law “terrible” and a “nonstarter.” Speaker Hullinghorst has stated that the bill would restrict the rights of homeowners to file construction defects lawsuits.

Construction Defects Law and Affordable Housing

Despite Speaker Hullinghorst’s opposition, some House Democrats have expressed how they would like to see the new construction defects law affect the availability of affordable housing. State Representative Alec Garnett (D-Denver), has voiced support for the proposed construction defects law. He told local reporters that the bill could “reduce the cost of property liability insurance” and “relieve some of the pressure” in the mid-range housing market. Rep. Paul Rosenthal (D-Denver) was quoted as saying that he would like to see the bill “lead to construction of more affordable housing.”

Effects of Construction Defects Law

The Senate version seeks to encourage home building by inhibiting the ability of homeowners to file construction defects lawsuits against builders. Rep. Jonathan Singer (D-Longmont), the House co-sponsor of the construction defects law draft, stated that the bill could spur home building efforts by “mak(ing) the argument that there are numerous processes out there other than going to trial.” However, the force of any such arbitration to force home builders to pay for construction defects is less clear at this stage.

Source: Colorado Statesman

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