Gov. Jared Polis signed a law Monday that’s a negotiated settlement to the construction defects wars — a bid by state legislators to bolster the development of condominiums and other starter homes.
The backers of seek to make it easier to build that housing by lowering the chance that homeowners will sue developers and builders if something is defective. Homebuilders and some lawmakers have long complained that Colorado’s construction defects laws have made insurers skeptical of condo development, suppressing the creation of for-sale units.
HB-1272 creates voluntary program for builders and developers. In exchange for accepting third-party inspections and providing a warranty that covers certain defects, developers will face lessened legal liabilities.
The bill’s backers, including Polis, say it will result in the building of more affordable, market-rate starter homes while helping the entire spectrum of housing availability. If more condos are available, higher-income renters or older homeowners who want to downsize can move into them and free up space elsewhere.
“I want to speak directly to those people who would like to be able to afford a place in Colorado: We owe you better,” Rep. Shannon Bird, a Westminster Democrat who sponsored the bill, said. The other sponsors were fellow Democratic Rep. Andy Boesenecker and Sens. James Coleman and Dylan Roberts.
“We know that for too long, you have not been able to afford a place to live in our state,” Bird said, “and we know that we have a moral obligation to fix this. Our bill today will help move the needle for you, and we are working so hard to open the doors of opportunity for you.”
The program is set to be established by Jan. 1.
It applies not only to condos but to other detached structures, like duplexes and townhomes. The law also raises the threshold before homeowners associations can file lawsuits: It requires 65% of HOA members to authorize a construction-defects suit, up from a simple majority.
The bill is the product of extensive negotiations over the past year. Like last year, critics of construction defects reform backed a separate proposal, which would’ve lowered the threshold for when homeowners can sue.
That bill eventually died, while HB-1272 was amended to strip out its most controversial provisions.
