Colorado Legislature Passes Construction Defects Legislation
The Colorado Senate passed HB17-1279, a bi-partisan bill that takes a much-needed step to address construction defects legislation and break down barriers to for-sale housing in Colorado. The passage of this bill is the final step before the legislation heads to the Governor’s desk for signature as the first substantive piece of state legislation to address construction defects.
Specifically, the bill requires that, before the executive board of an HOA in a common interest community sues a developer or builder on behalf of unit owners, the board must:
- Notify all unit owners and the developer or builder against whom the lawsuit is being considered;
- Call a meeting at which the executive board and the developer or builder will have an opportunity to present relevant facts and arguments; and
- Obtain the approval of a majority of the unit owners after giving them detailed disclosures about the lawsuit and its potential costs and benefits.
The Downtown Denver Partnership has long advocated for state-wide legislation to address construction defects as we know it is imperative that we provide our growing population of nearly 80,000 residents and more than 130,000 employees access to diversity of housing type and affordability.
Because of issues related to construction defects and other challenges to the housing market, we have been lacking in achieving this housing goal while investment in commercial properties continues to rise. The 2007 Downtown Area Plan set a goal of adding 18,000 new housing units by 2027, and since that time, even with the economic downturn, we have seen more than 12,000 new housing units built in the center city. Yet, only about one quarter of these have been for sale options, and over the past two years, when we have added 4,385 total residential units in the center city, only 4 percent are available to buy.
This data, coupled with many of our residential developers, managers, architects and contractors expressing concerns about construction defect legislation and its impact on for sale building, is why have supported several pieces of legislation during this congressional session to address this important issue. We’ve essentially stopped building condominiums, which means that many first-time homeowners, seniors, young professionals and others have been effectively blocked from home ownership at a time when the state’s rental market has skyrocketed. We’re also limiting the investment people can make in homes that help establish vibrant and sustainable city center neighborhoods.
Our support of this legislation joins our advocacy efforts that have included supporting the City’s first affordable housing fund, having representatives serve on Denver’s new Housing Advisory Committee, and advocating for policy changes to address construction defects at the local level, including the passage of Denver City Council Bill 15-0811 in November 2015.
HB17-1279 moves us forward, but there is still work to be done. Our Housing Taskforce, led by Trini Rodriquez with D.A. Davidson and Amy Hansen with Polsinelli, will ensure that our organization continues to be on the forefront of efforts to create a diverse city that is a socially and economically inclusive place. Residential development, affordable housing and Downtown amenities are all part of this equation.
Thank you to all of you who voiced your support to your state representative to address construction defects this legislative session, and to all who will continue to advocate for diversity of housing type and affordability moving forward. And thank you to the Homeownership Opportunity Alliance, of which the Partnership is a member, and bill sponsors Representatives Alec Garnett, Lori Saine and Cole Wist; and Senator Jack Tate and Minority Leader Lucia Guzman for working diligently on this issue.
We look forward to continuing to work with you to advocate for legislation that helps ensure Denver remains a vibrant, world-class city.