Breakthrough reached as business coalition, mayors throw support behind bipartisan construction defects bill
Author: Ernest Luning - April 19, 2017 - Updated: April 19, 2017
After weeks of protracted negotiations and postponed hearings, the standoff over bipartisan construction defects legislation broke Wednesday with the announcement that an alliance of builders and business groups and a group representing the metro area’s mayors will back the bill.
House Bill 1279, which would require that a majority of unit owners in a condo project approve filing a complaint over defective construction, is scheduled for a hearing Wednesday afternoon before the House State, Veterans and Military Affairs Committee. Gov. John Hickenlooper plans to join lawmakers and representatives on all sides of the issue to announce the breakthrough at a Capitol press conference just before the House committee hearing.
“With the good work of all stakeholders involved, Alec Garnett’s outstanding leadership and the bipartisan support of House Republicans, we have crafted a bill that enhances a consumer’s ability to purchase a new house while protecting homeowners’ access to the courthouse,” said House Speaker Crisanta Duran, D-Denver, in a statement. “On Day One, I promised meaningful progress on construction defects, and this agreement delivers on that promise.”
The bill’s House sponsors — Assistant House Majority Leader Alec Garnett, D-Denver, House Minority Whip Lori Saine, R-Dacono, with heavy lifting from co-sponsor Assistant House Minority Leader Cole Wist, R-Centennial — delayed the bill’s initial hearing three times over the past month because the groups involved couldn’t reach agreement on key issues in the legislation.
Denver Mayor Michael Hancock saluted the lawmakers involved in reaching a compromise to resolve an issue that has vexed the Legislature for years. And the spokeswoman for a coalition representing builders, business interests, civic leaders and affordable-housing advocates, a key negotiator at the table, said the members of the Homeownership Opportunity Alliance are getting behind the bill and believe it will help burst a logjam that has bedeviled the housing market in Colorado.
The mayors and the coalition representing builders and business groups had been withholding support for the bill over a provision governing how much time condominium unit owners have to decide whether to file complaints over defective construction in a condo project. But that changed early Wednesday after negotiations at the Capitol that lasted all day Tuesday and stretched past midnight, participants in the talks told The Colorado Statesman.
“HB 1279 is a welcome and positive step forward in reforming a system that has stifled attainable housing in our communities for far too long. This bill not only encourages greatly needed condo development, it protects the rights of homeowners,” said Denver Mayor Michael B. Hancock. “I’m extremely thankful to Reps. Garnett, Wist and Saine and all of the legislators who pulled together to reach this compromise, to Speaker Duran for keeping this issue at the forefront of this session, and to my fellow coalition partners who have worked tirelessly to encourage action on this critical issue.”
Kathie Barstnar, co-chair of the HOA coalition and a key negotiator, said the legislation, while not a cure-all, is a solid step in the right direction.
“We have worked on passing an informed consent bill for three years, and we are very pleased that this appears to be headed to a vote in the full legislature,” said Barstnar, who is also the executive director of NAIOP Colorado, the Commercial Real Estate Development Association. “This bill is not a magic bullet, but it will help provide attainable housing options to millennials, seniors, public servants, such as firefighters and teachers, and other Coloradans struggling to buy a home. Not only is this good policy for all Coloradans, it safeguards – and in some instances expands — consumer protections.”
The bill is part of a bipartisan package intended to address complaints by developers that Colorado law makes it too easy for condo associations to file multi-million dollar class action lawsuits, which they blame for the near disappearance of condo construction in the state in recent years. The builders want to make it harder for homeowner associations to file the lawsuits, but organizations representing condo owners and lawyers who represent them in the lawsuits say they’re unwilling to bargain away homeowners’ right to protect what’s often their most valuable asset.
HOA spokesman Mike Kopp, president of the business advocacy group Colorado Concern and a former Senate minority leader, emphasized that the agreement reached after midnight early Wednesday morning was an “important first step” but nonetheless had praise all around for those involved in the negotiations.
“We have a bill that puts in state law for the first time the right of a homeowner in an association to vote whether to go to trial or not for construction defect action,” Kopp told The Statesman. “Some existing covenants out there in homeowners’ associations have similar provisions, but all do not — it’s not in state law. We believe we’ve achieved an important first reform in resolving this housing crisis in the state.”
“The beauty of this is that we’ve put in state law the right of homeowners and builders to have a conversation in any run-up to a court trial,” he added. “It gives them an opportunity to talk and have a discussion. That’s a very positive step.”
The bill’s House sponsors likewise cheered the results of the lengthy negotiations.
“With this groundbreaking consensus bill we are protecting consumers, empowering homeowners and balancing risk in the marketplace for developers to break ground on attainable multifamily homes across the state,” Garnett said in a statement. “I want to thank everyone from all sides for staying at the table.”
“I am proud to have partnered with Reps. Garnett and Saine on today’s legislative breakthrough on attainable housing,” Wist said. “For the first time in Colorado, we are putting homeowners first when it comes to litigation decisions arising from alleged construction defects. HB 1279 allows for a transparent and fair consent process that carefully balances the interests of owners and homebuilders, and this bipartisan legislation reflects critical input from a robust stakeholder process. I appreciate the hard work of all involved. This is a great result for Colorado.”
“After years of unsuccessful attempts to pass a construction defect reforms, I am pleased our efforts culminated in a historic collaboration to solve Colorado’s attainable housing crisis and produced an agreement to give transparency and fairness to hundreds of thousands of Colorado residents and homeowners,” Saine said in a statement. “HB 1279 is a product of certainty for homebuilders to build, homeowners to have a voice, and future homeowners to build their future in Colorado.”
The bill’s prime sponsors in the Senate are Senate Minority Leader Lucia Guzman, D-Denver, and state Sen. Jack Tate, R-Centennial.