DENVER – The clock struck 12 on construction defects litigation reform Tuesday when the last two pending pieces of legislation were killed at the Capitol.
Senate Bill 45 would have shifted the time line for litigation so that the decision on which contractors were liable was earlier to lower insurance costs. SB 155 would have changed the definition of defects by requiring damage or loss of use of property, and dropped a provision allowing loss of value to be the basis for a defects claim. Both were killed Tuesday in the state Senate.
The bills represented the final blocks of the construction defects package that a bipartisan group of lawmakers cobbled together in attempts to thaw Colorado’s affordable and attainable housing markets.
Of the six bills brought forward by members of the group, only one, House Bill 1279, was approved and signed into law.
HB 1279 requires informed consent by the majority of homeowners in a development, limits who qualifies to vote so that developer-owned units do not count towards the require votes and requires developers be given the chance to address owners and offer to remedy defects.
It also reduces the time during which approval by owners must be gathered to 90 days from the announcement of pursuing litigation.
After years of failing to bring forth any change, lawmakers initially proclaimed HB 1279 as a grand compromise. But some are backing off and admitting that it is merely a step toward resolving the multifaceted problem.
“Is it a touchdown? No. I look at 1279 as sort of a first down, they moved the ball,” said Senate Majority Leader Chris Holbert, R-Parker.
Even so, Holbert said the six lawmakers who worked on defects litigation should be lauded for their hard work.
Included in the group were representatives Cole Wist, R-Centennial; Alec Garnett, D-Denver; Lori Saine, R-Dacono; and Senators Jack Tate, R-Centennial; Owen Hill, R-Colorado Springs; and Angela Williams, D-Denver.
Williams said the passage of HB 1279, and the work by the group, puts Colorado in a better place than it was at the beginning of the session.
“They are all concepts that are important to construction defects and we had very important conversations around those bills that did not pass the legislature, but we are better off because we have taken the first step,” she said.
The failure to deal with insurance premiums for condominium construction is of particular interest to her going forward, she said. “That’s still a very important issue.”
Mark Williams, city planner for Durango, agreed that the insurance is something that must be dealt with on the state level, because it is beyond the scope of what communities can influence.
Inability to limit insurance premiums has factored into the shrinking of the condo market, and caused many developments to be self-financed, meaning those projects that get off the ground are extremely expensive, Mark Williams said.
Because of the singular focus of HB 1279, he said he was unsure how much it would affect housing around the state and in La Plata County, where it is estimated at least 560 new housing units will be needed annually through 2035.
“I honestly would be surprised if condominium construction bounced back because of this one bill alone,” he said.
