Governor Polis and Bipartisan Lawmakers Propose Reforms Amid Housing Market Struggles

DENVER, Colo. – The debate over how to handle construction defects in Colorado has reached new heights as Governor Jared Polis and a bipartisan group of lawmakers introduced House Bill 1272, aimed at reforming the state’s construction-defects laws and reviving the condominium market. The move comes just one day after House Bill 1261 was introduced, presenting a stark contrast in its approach to protecting homeowners' rights and addressing construction flaws.

HB 1272, which has gained bipartisan support, would impose stricter standards for filing lawsuits related to defects in owner-occupied multifamily housing, offer more defenses for developers against such suits, and encourage repair over reparations. The bill aims to reduce risks for builders and streamline the resolution of disputes outside the court system. It specifically targets lower-cost condominiums, a market that has been significantly shrinking due to Colorado's high housing costs.

“The bill that we introduced last night has the bold goal of making home ownership a reality for many more Coloradans,” said Rep. Shannon Bird, a Westminster Democrat who co-sponsored the bill. “To the 90% of renters who aspire to own a home someday, hear me now: This bill is for you.”

On the other side, HB 1261, co-sponsored by 11 Democrats, takes a pro-homeowner stance, seeking to protect homeowners' legal rights and hold builders accountable for defects. This bill would void mandatory arbitration provisions in development contracts, extend the time for defect claims, and award prejudgment interest to successful claimants.

“It should be a given that builders will take responsibility for poor workmanship that results in homeowners like me dealing with sinking foundations and flooding basements,” said Janine Musser, a Westminster homeowner, advocating for HB 1261. “A home is the largest investment most of us will ever make, and this bill will give homeowners the assurance that their investment is fully protected.”

HB 1272: Aimed at Unfreezing the Condo Market

HB 1272 seeks to raise the bar for filing lawsuits by requiring 65% of condo owners (instead of a simple majority) to vote in favor of filing a claim. It also mandates plaintiffs to provide affidavits from licensed professionals, indicating negligence. Additionally, the bill would allow builders more affirmative defenses, such as a rebuttable presumption that a property is defect-free if a certificate of occupancy has been issued by a government entity. The bill also shortens the statute of limitations to six years for claims regarding middle-market housing, which includes condos priced at or below FHA loan limits.

Governor Polis expressed strong support for the bill, stating that it would “unleash housing supply” by incentivizing the building of more affordable housing, particularly condos. He stressed that this bill aims to address middle-class consumer needs and ensure homebuyers have more options in the housing market.

“I’m thrilled with the Legislature’s taking up the mantle to make sure we get this done,” Polis said during a Capitol news conference.

HB 1261: Aimed at Strengthening Homeowners’ Legal Rights

HB 1261 proponents argue that the current construction-defects laws in Colorado are too favorable to builders and don’t adequately protect homeowners. This bill requires builders to provide comprehensive building records to claimants, including soil reports and maintenance records. It also seeks to increase the period of limitations for filing claims from when a defect is discovered to when the cause is ascertained.

“I know firsthand the law already makes it almost impossible for homeowners to hold builders accountable for shoddy construction, and this bill would make it even more difficult for working families,” said Musser, who has firsthand experience with defective construction.

Proponents of HB 1261 emphasize the importance of protecting homeowners’ rights, and they argue that HB 1272 creates a two-tier system, where less wealthy homeowners would face fewer legal protections. “This bill would make it harder for homeowners to fight for their rights while letting builders off the hook,” said Rep. Jennifer Bacon, a Denver Democrat who introduced HB 1261.

The Clash Over Colorado’s Condo Market

The introduction of these competing bills highlights the intense debate over how best to reform construction-defects laws and address the shrinking condo market in Colorado. Proponents of HB 1272 argue that the bill is essential to incentivizing condo construction and making homeownership accessible to more Coloradans, while critics of the bill, such as those supporting HB 1261, believe it protects builders at the expense of homeowners.

As the legislative session moves forward, it’s clear that the debate over construction defects will be one of the most contentious issues facing lawmakers this year, with implications for both the housing market and the rights of homeowners across the state.

The Road Ahead

With both bills now on the table, the outcome of this debate could have long-lasting effects on Colorado’s housing market. As construction defect laws continue to evolve, homebuilders, legislators, and homeowners will be closely watching how these competing bills move through the legislative process.

“Housing isn’t just a roof over our head. It’s about giving families the opportunity to build a future,” said Bianka Emerson, president of Colorado Black Women for Political Action, underscoring the social impact of these legislative decisions.

The outcome will determine the future landscape of condo construction and homeownership in one of the nation’s most expensive housing markets.

Originally reported by Ed Sealover in The Sum & Substance Colorado.