Colorado legislators have moved forward with construction-defects reform, overwhelmingly supporting House Bill 1272 (HB 1272) on Tuesday, making it likely that the bill will pass this year. The vote, which came from the House Transportation, Housing and Local Government Committee, was 12-1 in favor of the bill, which aims to make it harder for condo owners to sue builders over construction defects.

The bill, which was debated alongside a separate bill favored by trial lawyers, addresses longstanding concerns about the increasing frequency of lawsuits against builders of affordable condominiums. The bill is seen as a way to promote homeownership and tackle the state's housing crisis by reducing legal barriers for builders, while still ensuring protections for homebuyers.

Rep. Shannon Bird, who spearheaded the bill, said, “HB 1272 is about increasing home ownership. To do that, we reduce lawsuits that drive builders away from affordable condos and offer protections for homebuyers.”

Changes were made to HB 1272 during the committee hearing after concerns were raised by homeowners and attorneys. The bill now includes provisions that give builders an affirmative defense against legal action if they hire independent third-party inspectors and provide warranties for certain building components. It also bars lawsuits over minor damages and raises the threshold for condo owners’ associations to file lawsuits to 65% of owners.

Proponents argue that HB 1272 will help alleviate the severe shortage of affordable condos in Colorado. Rep. Bird explained, “We need a system where people can afford to buy a home. And if there’s a problem, they need a fair way to be made whole. And all of that needs to happen in a way that doesn’t crash our housing market.”

However, the bill has faced opposition from trial attorneys and groups like the Build Our Homes Right coalition, who argue that it limits homeowners' ability to seek justice when builders cut corners. Construction-defects attorney Jennifer Seidman said, “The restrictions on filing lawsuits would mean that homeowners with faulty fire-safety systems must wait for a fire to erupt to sue builders.”

The legislation has also met resistance from some construction professionals. Scott Wilkinson, an attorney representing builders, pointed out that the bill might not have the desired effect on insurance costs, as insurers require thorough investigations for claims.

Despite the pushback, the bill's supporters are optimistic. Rep. Andy Boesenecker added, “We’ve made a lot of changes to this bill to make sure it addresses concerns from both sides. Builders are willing to voluntarily participate, proving their commitment to quality.”

In the meantime, a conflicting bill (HB 1261) that aimed to extend homeowners’ protections was killed by the committee. Rep. Jennifer Bacon had initially proposed HB 1261, which included measures like extending the statute of limitations for construction-defects claims and requiring prejudgment interest for successful claimants. However, she ultimately withdrew HB 1261 after certain provisions were incorporated into HB 1272.

Though HB 1272 has strong support, opponents continue to call for further changes, especially to strengthen protections for homeowners. Janine Musser, a homeowner, emphasized, “Coloradans need protections from builders of shoddy homes, so it’s essential to strengthen warranty, third-party inspection and provisions that provide broad builder immunity from having to ensure quality construction or repairs on new homes.”

With enough support for the bill in the House, it is now set to head to the Senate, where it will face its biggest test. Gov. Jared Polis has already announced his support for the bill, and with Senate President James Coleman as a co-sponsor, the outcome remains uncertain as it progresses through the legislative process.

Originally reported by Ed Sealover in TSS.