A bill designed to add some clarity to Colorado’s existing condominium construction defects law is moving through the state legislature and may soon be voted upon by the full House of Representatives.
Senate Bill 106 is a response to the Construction Defect Action Reform Act, which was passed in 2001 and limited the liability of builders for defects in a building product.
The 2001 legislation was sparked by an outpouring of litigation over construction defects, making it substantially more difficult for what were considered to be frivolous lawsuits to be filed. In the process, the law also encouraged dispute resolutions preliminary to a lawsuit being filed.
Under the new legislation, builders will have the right to address a defects issue before any litigation can be launched. In addition, the bill would increase to two-thirds the threshold of consent by fellow members of a given homeowners association leading to a lawsuit.
Because of the threat of lawsuits, many builders in Colorado have in recent years shied away from taking on condominium projects. That move, according to a variety of experts, has contributed to both a lack of housing and an increase in housing construction costs.
In response to the pending bill and legislative debate surrounding it, Governor Jared Polis has remarked: “We understand that conversations have been ongoing and encourage all sides to stay at the table and get a meaningful constructive reform bill that reduces condo costs to the Governor’s desk.”
The bill has not been without opposition. Democrat Senator Faith Winter last month remarked that the proposal would put obstacles in the way of condo owners trying to get issues resolved by builders. She added: “I think this makes it far more restrictive on when folks can be protected, and when they can’t.”
The Colorado legislature is scheduled to conclude its 2024 session on May 8.
By Garry Boulard