A recently introduced construction-defects reform bill is geared toward relaunching a condominium market that has suffered because developers and builders are afraid of being sued by homeowners.
Senate Bill 177 would change the existing law by requiring a majority of owners in condominium building, rather than just a majority of the homeowners association board members, to vote to proceed with a class-action defects lawsuit against builders. It also says an HOA can't remove requirements that disputes be settled through binding arbitration.
"This bill is designed to reduce the frequency of cases and magnitude of awards and to protect existing homeowners," says Tom Clark, chief executive of the Metro Denver Economic Development Corp.
Under current law, if an HOA sues a builder, homeowners in the project cannot sell or refinance their units.
"What happens to people who change jobs or people whose families break up because of divorce," Clark says. "They're stuck with a unit they can't pay for."
Clark says the legislation also is key to ensuring affordable, owner-occupied housing is built near transit stations.
"When we were campaigning for FasTracks, we pledged there would be communities on FasTracks," Clark says. "We are very frightened that there will not be any condos going up on FasTracks."
Last year, developers built 10,000 apartment units but just 360 condominiums in metro Denver, Clark says. Just 180 of those condos are in the affordable range.
Contact Confluence Denver Development News Editor Margaret Jackson with tips and leads for future stories at margaret@confluence-denver.com.
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