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DENVER, CO - The House Transportation, Housing & Local Government Committee today passed a bill that would incentivize the development of condominium and townhome units to create more affordable housing options. HB25-1272, sponsored by Representative Shannon Bird and Speaker Pro Tempore Andy Boesenecker, passed by a vote of 12-1.
“From building equity and generational wealth to lowering housing costs, condos offer numerous benefits to Coloradans looking to buy their first home,” said Rep. Shannon Bird, D-Westminster. “Rising rent and housing prices have made it nearly impossible for hardworking Coloradans to save enough money to buy a home at the median price tag of $550,000. After years of hard work, I'm thankful for everyone who worked closely with us to help craft this bill so we can spur new housing options that Coloradans can afford and offer more Coloradans a fair shot at the American Dream.”
“With a shortage of over 100,000 homes across our state and a decrease in condominium development, it's becoming increasingly difficult for first-time homebuyers to find housing they can afford,” said Speaker Pro Tempore Andy Boesenecker, D-Fort Collins. “Offering a variety of housing options is a critical piece in making homeownership a reality for more Coloradans. This legislation would help increase the availability of high-quality starter homes in the market to create more affordable housing options that work for every budget.”
HB25-1272 aims to reform construction defect laws by encouraging condo builders to work with third-party inspectors to help identify and correct any construction issues upfront, establishing clear guidelines for construction defect claims, and adjusting the statutes of limitation for construction defect claims.
Beginning January 1, 2026, the bill would create the Multi-Family Construction Incentive Program. Builders could opt into this program if they offer a warranty for any defect and damage and hire a third-party inspector to periodically review the construction throughout the building process. Builders in the program would be protected from construction defect action unless the claim has resulted in damage that meets the outlined criteria.
Under HB25-1272, a homeowner who purchased a property built under the program would have six years to bring an action for damages if the builder provides a warranty that meets minimum coverage requirements. The homeowner would have a duty to mitigate damage alleged to be caused by a defect and notify the builder, who must offer a fix to any defect claims. If the issue is not resolved through this warranty process, the homeowner may proceed with a defect claim.
The bill would exempt a construction professional participating in the program from liability for a damage or defect if they can prove the damage or defect was caused by:
Certain weather conditions, an act of war, terrorism or vandalism,
A homeowner’s unreasonable failure to timely mitigate damages or complete ongoing home maintenance,
Misuse, abuse, or neglect after the sale to the claimant.
From 2007 to 2022, the number of condo developers working in Colorado declined by 84-percent in part due to the potential for expensive lawsuits. Meanwhile, the median age of first-time homebuyers in Colorado rose from 35 to 38 in the past year.