House passes bipartisan construction litigation reform bill unanimously
Author: Ernest Luning - April 24, 2017 - Updated: April 25, 2017
Bipartisan legislation to make it more difficult for homeowners associations to sue condominium developers for construction defects passed unanimously out of the Colorado House on Monday and is headed to the Senate. The bill marks a breakthrough backers hope will thaw Colorado’s frozen condo construction market and help address a housing shortage across the state.
House Bill 1279, sponsored in the House by Assistant House Majority Leader Alec Garnett, D-Denver, House Minority Whip Lori Saine, R-Dacono, and key co-sponsor Assistant House Minority Leader Cole Wist, R-Centennial, was on hold and in limbo for several weeks earlier this month while the two sides — builders and the business community on one side and homeowners associations and trial lawyers on the other — wrangled over key elements in the measure, finally announcing that a compromise had been reached at around midnight last Tuesday night.
“A lot of hard work went into making a bill that was truly bipartisan,” Garnett said in a statement after the 64-0 final vote in the House. “This bill will help us achieve a better balance in Colorado’s housing construction market.”
The bill requires that a majority of condo unit owners approve filing a complaint for flawed construction but only after a condo project’s board distributes a report detailing the expected costs of any proposed litigation and a notice that a lawsuit can make it difficult to sell condos until it’s resolved. According to the compromise, owners will have 90 days total to conduct an election, during which time the clock stops running on the statute of limitations to identify and file complaints over construction problems. The duration of that pause — known as tolling — had been the primary sticking point between the two sides.
“It’s transparent, it’s fair, it allows both sides to present a case,” Garnett said at a Capitol news conference celebrating the compromise last Wednesday. He added that establishing “informed consent” creates a different climate for developers who have feared building condo projects in Colorado because of the risk of protracted, multi-million dollar lawsuits.
Builders and their allies have said the bill is a “good first step” toward resolving their concerns, although they caution that it could take more to liberate the market to the extent affordable housing advocates and civic leaders expect.
The bill’s Senate sponsors are Senate Minority Leader Lucia Guzman, D-Denver, and state Sen. Jack Tate, R-Centennial.