2015 Construction Defect Reform Legislation

2015 Construction Defect Reform Legislation

The State Legislature is considering changes to construction defect law under Senate Bill 2015-177 and Senate Bill 2015-91.  These bills would make it harder for HOAs to bring construction defect lawsuits against developers.

Senate Bill 177 would amend the Colorado Common Interest Ownership Act (CCIOA), not the Construction Defect Action Reform Act (CDARA).  This bill would require a majority vote of unit owners rather than just a majority vote of the board; require the HOA to inform unit owners before a lawsuit is filed – information on potential cost of the lawsuit and effect on their ability to refinance or sell would be required.  And, the bill would make arbitration or mediation (if provided for by the builder in the declaration) mandatory, precluding removable of those provisions by amendment, unless the builder’s consents.

Senate Bill 91 proposes to amend CDARA to reduce the statute of limitations and statute of repose on construction defect claims. 91 would require claims within one year of the date the defect appears and no later than four years after completion.

Senate Bills 91 and 177 are controversial.  We encourage you to review the bills and share your perspective with your state legislators.