The other side of the Colorado “condominium crisis”

A wonderful realtor and friend of mine sent me an email yesterday asking my opinion about SB 15-177. The Colorado Association of Realtors strongly supports this bill and sent an email blast to all realtors providing its support of the bill. The email to the realtors, in turn, requested that the realtors send an email to their representatives and senators supporting the bill. I can certainly understand why the CAR’s business interests are served by such a proposed law, but unfortunately at the expense of the homeowner clients they purport to serve.

I gave her a quick summary of the reasons why SB-15-177 is wrong for Colorado. Then today I read an article that did it even better.

I have some more criticism of the bill, but this article hits the main points very well. Colorado has some of the most builder-friendly laws in the country. The condo market was oversaturated in the housing boom of 2003-07, and for various reasons, demand for condos has dwindled.

The solution to the “problem” of builders getting sued for defective construction is to stop building defective homes. Taking away homeowners’ rights once they have purchased a defective home does not benefit anyone except the builders.  It is very disheartening to see now that the Colorado Association of Realtors have seemingly  chosen profit over the rights of the Colorado homeowners they purport to represent.

2015 Colorado Construction Defect Reform

In January 2015, we really didn’t know what bills the builders would try to pass in the legislative session. One idea that was wisely rejected was a “right to repair.” I wrote about this on the firm’s facebook page on January 5, 2015 with the following:

Below is a recent Denver Post article illustrating [edit: Denver Post article can be found here] a few of the many sides to the complicated issue of Colorado construction defect litigation and reform. I can’t help but weigh in that a “right to repair” would be a horrible solution.

I have been retained in many situations where, following a homeowner complaint about a serious construction defect, builders make a temporary repair and tell the homeowner it will be fine. When the temporary repair fails 2 years later and the homeowner sues, the builder and its insurers hire lawyers to argue (under the current construction defect laws that builders advocates argue spur lawsuits) that the homeowner failed to sue within 2 years of noticing the construction defect.

In the end, the homeowner is left with a six-figure repair cost and possibly life-safety issues with their home, and the builder and its insurers walk away with six figures in undeserved profit for cutting corners. A “right to repair” will force more homeowners to accept these corner-cutting temporary repairs.

In addition, a homeowner will be forced to allow a person or company to make repairs to their home that has already conned them once. The builder may not have the necessary experience to make such repairs. For many, that is an invasive scenario that could lead to additional stress and confrontations to an already tension-filled situation. In sum, Colorado law should not require a homeowner to give the keys to his or her castle to a builder because he or she was unlucky enough to have purchased a defective home from that builder.

Under current Colorado law, a builder has a right to inspect and offer a repair or money before it can be sued. If the homeowner accepts the proposed repair or money, the builder does not get sued and the issue is resolved with very little or no attorney involvement. In my experience, only about 5% of builders even make an offer before getting sued. Consistent inaction by builders is what leads to more lawsuits. And builders of defective homes only have themselves to blame.

Thankfully a right to repair bill is not being forced on homeowners. However, the current bill proposed by builders, SB 15-177, still seeks to erode away homeowners rights in exchange for more profit for the builders. More on that soon.