DENVER – The second piece of legislation aimed at resolving concerns with construction defects in Colorado passed 5-2 Monday by the Senate Business, Labor and Technology committee.
Senate Bill 156 would require homeowners seeking restitution for faulty work by contractors to go through mandatory arbitration or mediation. It also would require homeowners’ associations to acquire written consent from a majority of owners to pursue litigation The measure is one of a package of bills to resolve the lack of affordable housing in the state.
The shortage has been attributed to ballooning insurance premiums placed on construction companies, which dissuades them from building condos.
The mandate for arbitration is part of a provision that removes homeowners’ associations ability to change or amend their governing documents in this regard.
Arguments against the bill centered around this provision and the potential exploitation of it by construction companies.
Jonathan Harris, chairman of Build Our Homes Right, an organization of homeowners affected by construction defects, said SB 156 could allow developers to create governing documents before construction begins that homeowners would be powerless to change.
This would allow developers to “rig the game,” Harris said, by placing provisions that mandate who would oversee the mediation, where it would occur – which could be out of state – and ultimately limit homeowners ability to file lawsuits.
“Homeowners should have equal access to the court system when they’re wronged, but SB 156 would effectively strip away our basic right to a jury trial,” Harris said.
Sen. Owen Hill, R-Colorado Springs and sponsor of the bill, said SB 156 is not an attempt to undermine homeowners ability to pursue legal action but rather an easier option.
“The goal there is to say ‘let’s see if we can resolve this party-to-party, directly,’” Hill said. “Let’s see if we can get this fixed in a way that both sides agree to before we go down the very costly and problematic path of just straight to a lawsuit.”
The bill mirrors measures proposed and adopted by local jurisdictions around the state, including Durango.
Mark Williams, planner for the city of Durango, said the construction defects ordinance adopted by the city last year has not affected condo construction in Durango or elsewhere in the state with similar legislation.
“The only condo projects are really high-end ones in Denver where the builders can take measures to protect themselves from lawsuits,” Williams said.
The lack of expanded development stems from the uncertainty that surrounds construction defects protection, because of the hodgepodge of ordinances, depending on where construction occurs.
William said the ultimate solution is to have a uniform state law to ease concerns over what developers are getting into when they contract for condos.
lperkins@durangoherald.com
