In a move to ramp up condominium construction in Colorado, state lawmakers in the Centennial State may be tasked with passing new legislation specific to legal issues.
Nearly a quarter of a century ago, the Colorado State Legislature gave its approval to the Colorado Construction Defect Action Reform Act, which required homeowners to let builders first know about any defects in their condos before taking legal action against them.
The idea behind the legislation, strongly supported by builders, was to allow builders a chance to avert litigation by either fixing any structural issue or simply paying the owner for the problem in question.
Six years later came the Homeowner Protection Act, which made it illegal for builders to insert language in contracts preventing their being sued. That was followed in 2017 by a sweeping bill requiring that homeowner associations must first secure the support of more than a majority of condo unit owners before any defect litigation could be undertaken.
It was thought that that 2017 legislation would break a condo construction logjam in the state prompted by builders wary of taking on projects that could end up in court due to expensive defect litigation.
Although condo construction did indeed pick up after the 2017 bill, industry leaders say it is still not where it should be, and the reason is that the incidence of litigation remains high. “The only people that seem to win are attorneys,” Ted Leighty, chief executive officer of the Colorado Association of Homebuilders, recently remarked to the Colorado Sun.
Now lawmakers are expected to tackle legislation designed to further encourage negotiations over defects between condo owners and builders, while also isolating liability for defects.
Those efforts have won the particular support of the Homeownership Opportunity Alliance, which is partly made up of builders who say that the new legislation, if passed, will increase condo construction while also serving to reduce insurance costs.
According to statistics compiled by the Greenwood Village-based Common Sense Institute, the condo construction industry in Colorado is just a shadow of what it used to be: new unit building on just the east side of the state was 76% percent lower between 2018 and last year than it was two decades ago.
By Garry Boulard
