Firm-Wide blog

Colorado Lawmakers Wrestle with Construction Defects

By Burg Simpson
May 12, 2017
3 min read

Colorado’s had one of the hottest homebuilding markets in the country for several years now. But that rosy picture’s been marred by a single stain: condominiums. Ten years ago, condos made up about 20 percent of all new builds in Colorado. Today, they make up only about 3 percent of new residential construction.

Where Did All the Condos Go?

The drop is not out of line with the national trend, and reasons for this vary in Colorado, but there are those who blame this disparity on the proliferation of construction defect lawsuits and a regulatory environment that some say stacks the deck against builders. Others point to a much simpler solution: economics.

“They’ve come up with this bogus argument that they haven’t built any condos since 2008 because of us,” Burg Simpson construction defects lawyer Valerie M. Sullan told Westword magazine. “The strategy now is to use that downturn and the fact that condos were not built as an excuse to provide immunity to builders to build poor products and walk away from them.”

Construction Defects Reform

It could be argued that the annual battle over construction defects reform in the state capitol began back in 2001, when lawmakers passed the Colorado Construction Defect Action Reform Act (often referred to as “CDARA”), which lawmakers amended just two years later in what has been called CDARA II. Since then, the construction industry has repeatedly pressured lawmakers to change the status quo. While there have been minor tweaks over the years, pressure has been particularly intense since the economy – and the housing market – rebounded.

After four years of deadlock on the issue, construction defects lawsuits dominated early conversations at the Colorado State Capitol this year, as lawmakers introduced at least half a dozen bills targeting reform. Most died quickly.

The most prominent legislation this session, House Bill 1279, hit a speedbump in late April when the Homeownership Opportunity Alliance, a coalition representing builder and developer interests, suddenly reversed its position on the bill. HB 1279 forces a majority of condo owners to authorize a construction defects lawsuit before it can be filed. The Homeownership Opportunity Alliance wanted the bill’s 120-day timeline for a homeowner vote slashed to 60 days. The measure moved forward after both sides agreed to a 90-day voting period, passed unanimously out of committee, sailed through both houses as expected, and is currently awaiting Governor Hickenlooper’s signature.

As the session drew to a close, another bill, Senate Bill 156, cleared the Senate and moved on to the House. SB 156 would have mandated binding arbitration in a construction defects dispute, as opposed to litigation. But the House shipped it off to committee until after the end of the session May 10, effectively killing it.

Contact a Burg Simpson Colorado construction defects attorney for more information today at 303-792-5595 or fill out a Free Case Evaluation form if you are a homeowner needing to discuss a construction case.

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