DENVER – The Colorado Senate on Friday gave initial approval to a measure that would make it more difficult to sue over construction defects.
Sponsors said Senate Bill 177 is a step in the affordable-housing effort, pointing out that developers say the fear of facing a lawsuit is holding back development of low-cost condos and townhomes.
“This is not a panacea, it is not a silver bullet, it does not solve the affordable-housing crisis,” said Sen. Jessie Ulibarri, D-Westminster, a co-sponsor of the bipartisan bill. “But if we’re not seeing the construction of multifamily, owner-occupied housing, we’re going to continue to see our housing stock diminish.”
The bill still must face a final vote in the Senate before heading to the Democratic-controlled House for consideration, where the bill will face an uphill battle.
It would require mediation, or arbitration, and the majority of homeowners in an association to agree to file a lawsuit before legal action can be taken.
Critics of the measure say it erodes homeowners’ rights by making it more difficult to sue. They add that developers should be encouraged to build quality properties, and that a lawsuit may be the only legitimate remedy.
“I do know that ultimately the only answer to this is building a quality product in the beginning,” said Sen. Rollie Heath, D-Boulder.
Homeowners have also rallied against the proposal, worried that it would establish unfair community governing rules and restrict homeowners’ ability to consult with experts.
“I’ve actually lived through trying to get a builder to fix horrifying defects in our condo development, and it shocks me that the Senate would vote to strip our consumer rights,” said Jonathan Harris, chairman for Build Our Homes Right.
The bill has bipartisan support, though it split Democrats.
The issue is not isolated just to the Front Range. A memo dated Dec. 9 from Durango’s Community Development Department cites the threat of lawsuit as holding back development.
The vacancy rate in Durango hovers around a very low 2 percent, and the city will need about 900 additional housing units within the next eight years, according to city planners.
“It just stuns me the price of a condo or townhome,” said Sen. Ellen Roberts, R-Durango. “I wonder how could a young person possibly do this?”
The Senate on Friday also advanced a measure that would lower the overall length of time homeowners have to sue from eight years to six years.
Senate Bill 91 passed the chamber on a Republican party-line vote of 18-17. It now heads to the House, where it likely will die.
