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Sponsors again delay hearing on bipartisan construction defects bill, say negotiations ongoing

Author: Ernest Luning - April 5, 2017 - Updated: April 5, 2017

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House Assistant Majority Leader Alec Garnett, D-Denver, Assistant Minority Leader Cole Wist, R-Centennial, and Minority Whip Lori Saine, R-Firestone (Photos by Ernest Luning/The Colorado Statesman)
House Assistant Majority Leader Alec Garnett, D-Denver, Assistant Minority Leader Cole Wist, R-Centennial, and House Minority Whip Lori Saine, R-Dacono (Photos by Ernest Luning/The Colorado Statesman)

Lawmakers late Tuesday pushed back a scheduled Wednesday committee hearing on a bipartisan construction defects reform bill, saying negotiations involving critical issues are still unresolved.

Groups representing builders and homeowners have been facing off for years over attempts to rewrite state law governing how condominium owners can go about getting builders to fix defective construction, and it looks like they’ll have to face off at least a while longer.

House Bill 1279 had been scheduled for its first hearing on Wednesday afternoon before the House State, Veterans and Military Affairs Committee but disappeared from the schedule, ostensibly because the House was preparing to undertake extensive work this week on the state budget, but the bill’s sponsors and key stakeholders conceded that the hearing had been shelved to give negotiators more time.

It’s the second time the bill has been delayed due to disagreements about handling a key provision of the legislation, which would require a majority of homeowners in a condominium project to vote to approve moving ahead before filing a complaint over defective construction.

Last week, Democrats, including Assistant House Majority Leader Alec Garnett, D-Denver, a prime sponsor of the bill, said they were frustrated that a group representing builders and other business and civic interests — the Homeownership Opportunity Alliance coalition — was refusing to sign off on the bill, but this week the various players seem to agree there’s more work to be done before legislation acceptable to all sides emerges.

Garnett said late Tuesday that negotiators were “still working” on reaching a solution.

The bill is the linchpin of a bipartisan effort to resolve long-standing complaints by builders that Colorado law makes it too easy for condo associations to file multi-million dollar class action lawsuits, a risk they say has effectively ground condo construction to a halt in the state.

House Minority Leader Cole Wist, R-Centennial, one of the key architects of the legislation — he’s a co-sponsor of House Bill 1279 and a prime sponsor of other bills related to construction defects issues — told The Colorado Statesman late Tuesday night he wasn’t discouraged at the news the hearing was being postponed, although he did note that he was disappointed.

“No one said this was going to be easy or fast,” Wist said. “We are still at the table and are still working on finding common ground. The contested issues are fewer and narrower. I remain confident we will get a solid bill to the House floor.”

A spokeswoman for the HOA coalition, which includes business leaders, affordable housing advocates and the metro area’s mayors, said the coalition was glad to have more time to work with legislators on the bill.

“While the hearing was rescheduled due to the budget, we welcome the additional time to continue working with the bill sponsors in an effort to produce a bipartisan bill that encourages more condo development while protecting consumers,” said Kathie Barstnar, co-chair of the HOA and executive director of NAIOP Colorado, the Commercial Real Estate Development Association.

“Our goal has always been to pass a bill that actually makes a difference — that gets builders and developers to start building again while protecting the legal rights of individual homeowners,” she added. “We are hopeful that we can find common ground in the next few days.”

The HOA coalition is the group that put the brakes on the bill last week when its policy committee voted against supporting it on the eve of a scheduled committee hearing. The group objected to a provision in the bill allowing the clock to stop ticking — a process known as “tolling” — on the length of time homebuyers have before they can file a complaint, while holding the required election to determine whether to go ahead.

Former Senate Minority Leader Mike Kopp, president of the business group Colorado Concern and a spokesman for the HOA coalition, told The Statesman last week that stopping the clock — or tolling — during an already lengthy election and formal notice process could add a full seven months to what’s colloquially known as the statute of limitations (there’s also something called a statute of repose involved), undermining what the HOA is trying to achieve.

“Pretty soon, you’ve added a year of exposure to the builders, and that’s contrary to what we’re trying to accomplish in the first place,” he said. “We’re trying to reduce exposure, not extend it.”

The head of Build Our Homes Right, a group representing homeowners and legal advocates for homeowners’ associations, sounded equally hopeful that a compromise can be reached, but he stressed that homeowners are just as concerned about issues surrounding the timeline.

“Homeowners remain open to discussing reasonable proposals to the overall disclosure and voting process and hope we’re able to agree on a compromise that will finally end this long-standing debate over construction defect law,” Jonathan Harris told The Statesman.

Homeowners’ advocates say it takes time to discover some construction problems — for instance, a leaky roof might not reveal itself until a rare monsoon hits, years after buyers have moved into their condos — and the lengthy meeting, disclosure, election and notice period described in the bill have the potential to drastically squeeze that already short time.

“The legal timeframe homeowners have to pursue a legal remedy for shoddy construction is already the fourth shortest in the country,” Harris said. “Stripping the tolling part of the bill that stops the clock during the disclosure and voting process would leave homeowners with just over a year and half under the statute of limitations. That would unfairly punish homeowners for conscientiously following the law.”

— ernest@coloradostatesman.com

Ernest Luning

Ernest Luning

Ernest Luning is a political correspondent for Colorado Politics. He has covered politics and government for newspapers and online news sites in Colorado for more than 25 years, including at the Highlands Ranch Herald, the Jefferson Sentinels chain of community newspapers and the Aurora Sentinel, where he was the city hall and cops reporter. After editing the Aurora Daily Sun, he was a political reporter and blogger for The Colorado Independent site. For nearly a decade, he was a senior political reporter and occasional editor at The Colorado Statesman before the 119-year-old publication merged with Colorado Politics in 2017.