Colorado Capitol Report

In this Capitol Report:

• House Sends Compromise Construction-Litigation Reform Bill to Senate with 64-0 Vote

House Sends Compromise Construction-Litigation Reform Bill to Senate with 64-0 Vote

This morning, with no votes in opposition, the House voted 64-to-0 (one member was excused) to approve on final, Third Reading, HB-1279, the construction-litigation reform bill that sprang to life last week with a major compromise by both sides of a controversial issue that has profoundly divided the legislature for four straight sessions.

Last month, as various bills seeking to address the issue died or languished, it seemed that, once again, the legislature would be stalemated on the problem for the fifth year in a row about how to jump-start the construction of townhomes and condominiums across Colorado and provide affordable, entry-level multi-family homes.

“I wasn’t sure we would get here,” House Speaker Crisanta Duran (D-Denver), who was presiding over the Chamber, said to the sound of laughter before the vote was taken.  Following the vote, the chamber erupted in applause and cheers.

On Friday morning, with little debate but with praise of compromise from both Republicans and Democrats and under “special orders,” the House approved the bill on a Second Reading voice-vote.

Late Tuesday night, bipartisan sponsors and interested organizations on both sides of the issue reached agreement on HB-1279, which would establish a statutory framework that balances the interests of builders of townhomes and condominiums with that of the units’ owners.  On Wednesday, the House State, Veterans and Military Affairs Committees amended and approved the bill on a unanimous, bipartisan 8-0 vote.

CACI supports the measure.

The key aspects of the compromise includes:

• A majority of homeowners–instead of a majority of a homeowner association board–must vote to approve filing a lawsuit against a developer over alleged construction defects;
• Extending the statute of limitations by 90 days during the voting period for homeowners to discover and report alleged defects before unit owners proceed with a vote on whether or not to pursue a lawsuit against the builder;
• Reducing the types of unit owners who can participate in the vote;
• Detailing more specifically the process for the election on whether or not to pursue a lawsuit, including informing homeowners of the pros and cons of a lawsuit.

At the center of the discussions was the lead negotiator for the House and the bill’s co-sponsor, Representative Alec Garnett (D-Denver), who was quoted by The Denver Business Journal: “With this groundbreaking consensus bill, we are protecting consumers, empowering homeowners and balancing risk in the marketplace for developers to break ground on attainable multi-family homes across the state.”  Representative Garnett is the Assistant House Majority Leader.

The bill’s other House co-sponsor is Representative Lori Saine (R-Dacono)., who was quoted by The Denver Business Journal as saying: “After years of unsuccessful attempts to pass 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.  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.”

Here’s an update on the three other construction-defect bills:

• SB-156 was laid over by the House State, Veterans and Military Affairs Committee by an unanimous vote until May 12^th, which is two days after which the session must conclude.
• SB-155 remains before the Senate Business, Labor and Technology Committee.
• SB-45 continues to tread water in the Senate Appropriations Committee.

For more information about HB-1279 and the other bills, contact Loren Furman, CACI Senior Vice President, State and Federal Relations, at 303.866.9642.

For news media coverage and additional information, read:

“Construction-defects reform: How the deal came together at the Colorado Legislature,” by Ed Sealover, The Denver Business Journal, April 21^st.

“State lawmakers hope more affordable condos are in Colorado’s future with deal on defects legislation,” by Marianne Goodland, The Colorado Independent, April 19^th.

“State lawmakers hope more affordable condos are in Colorado’s future with deal on defects legislation,” by Marianne Goodland, The Colorado Independent, April 19^th.

“Deal reached on construction defect litigation reform in Colorado legislature,” by Peter Marcus, Colorado Politics, April 19^th.

“Legislators, business groups reach agreement to pass construction-defects reform” by Ed Sealover, The Denver Business Journal, April 19^th.

“Lawmakers announce breakthrough on construction defects reform measure,” by John Aguilar, The Denver Post, April 19^th.

“Construction-Litigation Bills Encounter Stormy Weather,” CACI Colorado Capitol Report, March 17^th.