A bill aimed at reforming the state’s construction defects laws to make way for more condos and a less expensive housing market cleared the House Transportation, Housing and Local Government Committee in a 12-1 vote on March 18.
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The legislation would give builders new legal protections if they meet certain quality standards, including hiring independent inspectors and offering warranties on plumbing, heating and structural components. The move was reported in The Sum & Substance, a newsletter by the Colorado Chamber of Commerce.
The bill would also raise the threshold for condo associations to file lawsuits over defects from a simple majority to 65% of owners — a move backers say could reduce lawsuits that have driven builders out of the condo market.
Condos made up about a quarter of Colorado’s housing market in 2008. Today, that number is closer to 3%, TSS reported. It is a critical segment for first-time buyers squeezed by high interest rates and low inventory.
“We need a system where people can afford to buy a home. And if there’s a problem, they need a fair way to be made whole. And all of that needs to happen in a way that doesn’t crash our housing market,” Rep. Shannon Bird said, according to TSS. “Right now, our current system isn’t working because we’re not building things that people can afford to buy. So, the bill is an attempt to change that problem that we have, to change the system.”
Opponents, including trial lawyers and some homeowner advocates, say the bill could erode consumer protections and leave buyers with fewer legal options if things go wrong.
Construction defects reform has been a hot-button issue in Colorado since 2013 resulting in frequent legislative action, but those actions haven’t significantly moved the needle on condo construction.
Colorado has the eighth-least-affordable housing in the nation, according to the National Low Income Housing Coalition.
Gov. Jared Polis has endorsed the measure, which now heads to the full House for debate.
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