(April 27) – A bill to shelter the builders of shoddy homes fell apart tonight in the House State, Veterans & Military Affairs Committee. The vote was 6-5, on party lines.

SB15-177, which was sponsored by House Minority Leader Brian DelGrosso and had already passed the Republican-controlled Senate, would have undermined Colorado homeowners’ right to sue builders over defective construction. Among other offensive provisions, the bill would have prevented homeowners associations in Colorado from changing key provisions of their bylaws.

“The problem in Colorado is a shortage of affordable housing, and allowing builders to build defective housing is not the solution,” said Rep. Max Tyler. “Bad builders shouldn’t be able to dodge their responsibility to stand behind their work, and homeowners shouldn’t lose their civil right to protect their investment — in court, if necessary.”

In the Colorado affordable housing market, construction of rental apartments far outstrips condo construction, but market forces – not the legal environment — are the root of the problem.

The younger Coloradans most likely to buy a condo have emerged from the Great Recession with higher debt loads, often because their wages haven’t rebounded and it’s taking them longer than usual to retire their student debt. Credit markets are tighter than they were before the economic slump, making it harder to get a mortgage. Younger couples are waiting longer to settle down and raise families. And having witnessed the collapse of the housing market, many Coloradans are leery of sinking their life savings into real estate.

Homeowners association rules in new developments are written by the developer, and homeowners who buy into the development are required to accept them. Not surprisingly, those HOA rules are designed to protect the developer, preventing homeowners from making construction defect claims and dictating the arbitration-mediation process.

Under current law, homeowners can amend HOA declarations with a two-thirds vote. SB15-177 would have prevented any amendments to HOA rules pertaining to construction defects.

Molly Foley-Healy, an attorney for Colorado homeowners associations, testified that SB15-177 was “window dressing for the destruction of homeowner rights.”

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