Long have we supported reforms that could help Colorado’s housing market — — rebound from the 2008 crash.
Whether it’s condos, townhouses or single-family homes, having an affordable place to live for workers is crucial to our economy. There are many factors driving Colorado’s affordable housing crisis. But the high cost of litigation and high probability a developer gets sued in Colorado from construction defects claims is a significant problem.
For years lawmakers have failed to address the state’s laws governing costly lawsuits brought by homeowners against developers and sub-contractors, and when a bill did pass in 2010, in some ways it made matters worse.
But the prospect for compromise and real change during the 2017 legislative session is looking bright.
House Speaker Crisanta Duran, D-Denver, and Senate President Kevin Grantham, R-Cañon City, have .
The bill is not a panacea for the threat of expensive construction defects lawsuits, but it’s an innovative and collaborative approach that would likely help.
The leaders should get credit for their willingness to compromise, and if this becomes law, their ability to wrangle tough issues.
The goal of SB 45 is not to make it more difficult for homebuyers to sue in order to weed out frivolous lawsuits or those that don’t give homebuilders a chance to fix a problem before it lands in court.
Instead the goal is to reduce the cost of insurance for subcontractors working on multi-family housing projects. Insurance has become prohibitively expensive or simply unavailable. Colorado law apportions the cost of paying for attorneys and other legal fees in an almost nonsensical way that often requires a separate lawsuit to resolve. A construction defects lawsuit often has many parties, from the person in charge of the project, to the sub-contractor that put in the drywall or painted the walls.
Duran and Grantham’s bill would require the courts to apportion responsibility for defense costs to each party based on their likely responsibility for the defects claim. The fix could prevent secondary lawsuits from cropping up between each party’s insurance company as they try to figure out who is responsible for what.
Leaders from the insurance industry are adamant this will help reduce costs, to some extent, for subcontractors who now find themselves on the hook for legal fees that should belong to others.
The plan shifts more of the burden to general contractors, and the construction industry doesn’t seem too keen on the bill. Attorney Bruce Likoff cautioned Denver Post Reporter John Aguilar in an e-mail that the public should be wary of whether a bill will actually make a difference or “be passed to provide political cover to nervous legislators that want to say they did something.”
That’s pretty cynical.
We think this bill will make a difference. Although, we urge Duran and other Democrats to still be open to other changes that could reign in the propensity for costly construction defects lawsuits and not just reduce the costs once those lawsuits have been filed.
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