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DENVER, CO - Governor Jared Polis today signed a bill into law to build more condos now and reduce the cost of housing.
“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 new law so we can spur new housing options that Coloradans can afford and offer more Coloradans a fair shot at the American Dream.”
“HB25-1272 will make fair and balanced reforms to our construction defects laws, ensuring that high-quality homes are built, problems are fixed before sale and excessive costs that deter development can be reined in,” said Senate President James Coleman, D-Denver. “This law is a proactive solution that incentivizes responsible development, making it a win-win for homeowners and builders alike. It’s intended to meet the demands of our communities, respond to changing demographics, and provide housing that is adaptable to different housing sizes and needs. With this new law, we can create more attainable housing opportunities and ensure that more Coloradans can achieve the dream of homeownership.”
“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. Our new law will help increase the availability of high-quality starter homes in the market to create more affordable housing options that work for every budget.”
“In Colorado’s mountain and rural communities, there are teachers, police officers, small business owners, nurses, and other crucial working folks who desperately want to be able to buy a home and put roots down, but there’s not any housing available for them to purchase,” said Senator Dylan Roberts, D-Frisco. “For years, construction defects laws have stunted the development of condos and townhomes, generally more affordable housing options for first-time buyers. This new law will change that and help ensure that we have a healthy mix of housing units, allowing more Coloradans to achieve their dream of homeownership.”
HB25-1272 reforms 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 law creates the Multifamily Construction Incentive Program. Builders will be able to 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. In exchange for providing these additional safeguards upfront, builders in the program will receive additional protections against construction defect actions, which can be costly to litigate and discourage condo development.
Under HB25-1272, a homeowner who purchased a property built under the program will have six years to bring an action for damages. The homeowner will 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 law exempts 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, or
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.