Construction defects arbitration bill moves forward

A large coalition of political, economic development and affordable housing advocates testified on behalf of a bill that seeks to shift the resolution of construction defect claims towards arbitration rather than litigation.

They were met Monday in the Senate Affairs Committee by a long list of homeowners and community managers sharing horror stories of shoddy construction work and developers unwilling to fix problems.

"The status quo is unworkable," Sen. Jessie Ulibarri, D-Westminster, a co-sponsor of Senate Bill 220. "What you have in front of you is an attempt to break the log jam."

The bill would require a homeowner's association to adhere to arbitration requirements that developers typically include in the initial covenants rather than pursuing jury trials.

If an HOA decides to pursue litigation, it would require a majority of members in a community to provide written approval after being informed of potential costs to pursue a lawsuit.

The bill passed on a 3-to-2 vote, with Ulibarri joining committee Republicans in sending the measure on for review by the Senate Judiciary Committee.

Advocates of affordable housing argued that the current law has greatly curtailed condo construction, leaving lower-income residents with few options besides renting.

In particular, first-time buyers looking to break into the market and elderly homeowners looking to downsize are being harmed, they said.

As proof that something is broken, Ulibarri noted that only 2 percent of housing permits are for for-sale multi-family versus 20 percent in other areas.

Condo developers face insurance premium three times per unit of what apartment builders face, Metro Denver Economic Development Corp. CEO Tom Clark said.

Read the original post:
Construction defects arbitration bill moves forward