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Colorado Legislature Passes Construction Litigation Reform

After more than four years of negotiation and compromise, legislation seeking construction litigation reform has been signed by Colorado Governor John Hickenlooper. House Bill 1279 was a bi-partisan effort unanimously approved by both the Colorado State Senate and House of Representatives.

The Denver South Economic Development Partnership (Denver South EDP) supports this initial effort to create a business-friendly climate for developers and builders as they bring additional for-sale properties to the housing market. In the past few years, multi-family for-sale properties have not been built due to developer concern about the lengthy and potentially costly construction litigation.

With our population and workforce growth, we hope this will create more for-sale housing options at lower price points. The deficiency of available product creates a barrier to entry for young professionals and people seeking owner occupied properties. Condos represent only 3.4% percent of the new housing options coming onto the market, forcing people to choose between pricier single family homes and the skyrocketing rental market. In the Denver Metro area’s escalating rental market workers must make $35 per hour, more than 3.5 times more than Colorado’s minimum wage, to afford the median rental rate.

HB 1279 seeks to bring new options to the housing market through a compromise directed at balancing the interests of builders and developers with the interests of homeowners and trial lawyers. Key provisions of the bill include the following provisions to the construction defect lawsuit process:

  • A vote of all homeowners must be held within 90 days of the consideration to file a lawsuit.
  • All homeowners must be notified of the consideration to file a lawsuit and must be informed about the advantages and disadvantages of litigation at a public meeting held 10-15 days after initial consideration.
  • At the public meeting both sides, developers/builders and trial lawyers, can present their arguments for or against litigation.
  • An ownership list with mailing information must be provided to all construction professionals at the public meeting
  • A majority vote of all homeowners, rather than just an executive or HOA board, is required to pursue litigation

Denver South EDP has been an active proponent of construction litigation reform efforts and is a Coalition Partner of the Homeownership Opportunity Alliance. Denver South EDP extends its thanks to the House and Senate for bringing this first step towards a solution to fruition, including the bill’s sponsors Senator Jack Tate, Senate Minority Leader Lucia Guzman and House Representatives Alec Garnett, Lori Saine and Cole Wist.

Denver South has a diverse housing market with a variety of opportunities for people of all lifestyles and ages. From transit-oriented developments to starter homes to executive housing, the corridor has options to suit residents at all stages of life. Learn more about housing in Denver South.

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