April 19, 2017 04:00 PM UTC

Construction Defects Compromise Redux: Oh Lordy, Kumbaya

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• by: Colorado Pols

As the Denver Business Journal’s Ed Sealover reports, a hammed-up drama that most ordinary people couldn’t care less about, the years-long campaign by condominium builders to shield themselves as much as possible from legal liability over defects in their construction, is nearing a possible solution after numerous fits and starts this session:

After four years of failed negotiations, business leaders and Democratic Colorado legislators finally have reached an agreement to move forward a bill that will reform construction-defects law with the aim of jump-starting what is largely a non-existent condominium construction market…

Just three weeks ago, Rep. Alec Garnett, the Denver Democrat leading negotiations with reform backers, announced that talks had hit a major impasse over demands from business leaders that the statute of limitations on discovering purported defects not be extended by as much as six months while condo owners vote on whether to proceed with a lawsuit.

However, a variety of interest groups agreed late Tuesday to reduce the time frame for extending the statute of limitations by just 90 days while narrowing the types of homeowners that could not vote in the election and defining more specifically how that election will occur, said Mike Kopp, the president and CEO of Colorado Concern who had a lead role in the negotiations…

Condominiums now make up less than 3 percent of the new housing stock in Colorado, and builders say they are unwilling to build because current law makes it too easy for just a small group of homeowners association board members to file multi-million-dollar defects lawsuits.

The change that brought parties back to the table on House Bill 17-1279 isn’t a dealbreaker for either side, and this bill preserves the right of condo owners to file suit instead of being forced into binding arbitration to resolve their claims. The position of homeowners’ groups and attorneys who represent homeowners in construction defects claims was always that preserving legal rights for homeowners is their hard limit. What this bill does do is put the decision in the hands of homeowners directly via an election instead of HOA boards, and requires notification of homeowners that a lawsuit might affect their ability to quickly sell their property.

Everyone agrees that Colorado needs more affordable housing, and suburban cities want to make the most of new trends like transit-oriented development. Although builders want to place the blame solely on being made to stand behind their work, there are more complicated market forces in play–as well as politics, since in recent years it’s arguable that builders had a straightforward political motive for not pursuing condo projects.

If the final bill passes with this latest compromise, all parties seem prepared to live with it–and in theory, new condo starts should pick up. Democrats led by Rep. Alec Garnett deserve credit for not abandoning their principles while working hard to get a deal that will finally put this inside-baseball issue to rest.

As for the public, they couldn’t care less–but if their condo’s roof starts leaking, they expect it to be fixed.