Bipartisan construction defects bill introduced, aiming to curb legal action, spur affordable housing

A bipartisan quartet of lawmakers Tuesday officially kicked off the next round in a years-long quarrel over how to deal with Colorado’s construction defects litigation statutes, a move that could possibly initiate the capstone undertaking of the 2015 legislative session.

After several similar bills failed in past years, Senate Majority Leader Mark Scheffel, R-Parker, and Sen. Jessie Ulibarri, D-Commerce City, joined together in a bipartisan, albeit still contentious effort, and introduced Senate Bill 177, along with House co-sponsors Reps. Brian DelGrosso, R-Loveland, and Jonathan Singer, D-Loveland.

The bill aims to spur growth of affordable, multifamily housing by curbing legal action. Much of this litigation is initiated when a homeowner discovers deficiencies in design or construction that may have resulted from negligence or poor workmanship on the builder’s part. Proponents argue that a flood of lawsuits due to Colorado’s overly unbalanced, pro-consumer stance in this matter has caused builders and developers consternation, scaring them away from investing in new housing projects that would otherwise have been affordable for middle-class families.

As a result, homebuilders claim they are forced to hand down skyrocketing insurance costs, which protect them against these sometimes excessive legal actions, to aspiring homeowners. First-time homebuyers and seniors, who may be looking to downsize from larger single-family homes, are included in that mix.

Some critics point out the bill is not the way to go about increasing affordable housing, saying the introduced legislation would deal a hefty blow to a homeowner’s right to obtain a legal resolution to shoddy construction and would do little to turn the tide on the housing market problem.

But the Scheffel/Ulibarri proposal argues that so-called Alternative Dispute Resolution through a mediator might well be a less time-consuming and cheaper way to deal with construction defects while still carrying enough legal weight to provide homeowners with solid protections.

Additionally, for homeowner associations, the bill requires a majority vote of all homeowners within an association before any such organization can move forward with legal action.

At a news conference at the Yale RTD Light Rail station following the bill’s introduction Tuesday, Ulibarri called the proposal a “once-in-a-generation opportunity to build affordable housing” and a direct answer to a shortage in supply of condos and townhomes. This language reflected his Republican co-sponsor’s sentiment.

“We know that there are people trying to get into these products, but they are simply not available,” Scheffel said. “The current law has a defect, and we are going to do something about that.”

 Read the full story in the next edition of the Colorado Statesman

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