Caption +

Colorado State Capitol Building

Show MoreShow Less

The angrier voices in the debate over construction defects litigation are finding a harmony, based on the floor debate of House Bill 1279 Friday.

The compromise legislation announced Wednesday was a long-awaited cease in hostilities. One side has argued through multiple legislative sessions that lawsuits are gobbling up the profit margins and eliminating the incentive to build lower-cost condos.

The other side suspects previous bills have been ploys to rob homeowners of the right to sue over shoddy construction.

If the bill makes it to Gov. John Hickenlooper's desk by the end of the session on May 10 and becomes law, members of homeowners associations would hear from both sides before voting on whether to sue during a new 90-day waiting period.

HOA boards, as few as two people, now decide on whether to sue a builder or developer over construction problems, which is "tantamount to house arrest," said Rep. Lori Saine, R-Dacono, the bill's sponsor.

She said it also was "a potential opportunity to hear an offer to remedy the defect for a homebuilder."

HOA boards would be required to inform members about the cost of a lawsuit and the impact it might have on their ability to sell their property while the case is in limbo.

"What this issue has resulted in is a 20 percent condo market becoming a 2 percent condo market," he said, citing statistics that showed the slide since 2005 from the Colorado Homeownership Opportunity Alliance, a group of builders, trade associations and others in support of construction litigation reform.

"Here's why that's important. First-time homebuyers are prevented from being part of the American dream, which is homeownership."

The median price for a condo in metro Denver last month was $260,000 compared to $400,000 for a house, according to the Colorado Association of Realtors.

"We believe House Bill 1279 strikes an important balance between protecting homeowner rights to pursue construction defect claims, educating them about the process and promoting construction," said Suzanne Leff, spokeswoman for the Community Associations Institute, a trade group that provides education and resources for homeowners associations and advocates for legislative and regulatory benefits for its members.

While bills have languished in the Legislature, 17 municipalities and Douglas County have passed local reforms, but advocates for a statewide solution say a patchwork of laws creates an uneven legal landscape but doesn't create a large enough footprint to lower insurance rates for builders.

Rep. Alec Garnett, D-Denver, another of the bill's sponsors, said work on a compromise began months ago.

"There were moments of doubt about if we could get there, but what we never doubted was the trust that we had in each other that we wanted to get to the finish line," he said,

Not quite to the checkered line yet, Speed Racer.

The bill passed easily on a voice vote Friday, but still must get a majority on a roll call vote in the House, before bouncing to the Senate.

But for the first time, the major players seem to be pushing in the same direction.

"Oh, happy day," Gov. John Hickenlooper exalted Wednesday when the deal was announced.

Load comments