House Bill 1279 – New Requirements for Colorado Homeowners’ Associations Making Construction Defect Claims

On May 27, 2017, Governor Hickenlooper signed HB 1279 into law which changes the way Colorado homeowners’ associations may bring construction defect claims. The new Colorado law requires homeowners’ associations to send notice, hold a meeting, and conduct a voting period by the owners before bringing construction defect claims.

First, the notice must contain, among other things, a description of the alleged defects and a good-faith estimate of the benefits and risks involved. The new law establishes very specific and detailed notice requirements that include disclosure of attorney fees and costs, impacts on an individual owner’s property during the process, and the benefits and/or consequences of filing or not filing construction defect claims. Notably, the notice must also be sent to the construction professionals who performed the defective construction.

Second, Colorado homeowners’ associations must now hold an owner meeting between ten and fifteen days after the notice was mailed. The construction professionals must be invited to attend this owner meeting and have an opportunity to address the owners regarding the alleged construction defects. The construction professional may, but is not required, to provide an offer to remedy the alleged construction defects at the meeting.

Third, the owner voting period requires Colorado homeowners’ associations to maintain detailed owners’ lists and track owners’ votes. Homeowners’ associations may bring construction defect actions against construction professionals only after complying with the notice, meeting, and voting requirements established in the new law and upon authorization by a majority of favorable votes by the owners.

This new law goes into effect on September 1, 2017 and the full implications of these additional requirements for homeowners’ associations remain unknown. The law contains tight timelines and harsh consequences if the law’s requirements are not met. Questions remain regarding how this new law’s meeting requirement will interact with the notice of claim process required under Colorado’s construction defect laws. Finally, the new law establishes specific details on who and how owner votes are counted, how to amend claims, and exceptions to when homeowners’ associations can bring construction defect claims against a construction professional without an owner vote.

Contact Johnson Law today to discuss how this new law may impact your community and to ensure your homeowners’ association is complying with the law’s heightened requirements before filing claims for construction defects.

-Tessa R. DeVault

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