DENVER – Negotiations on construction defects reform collapsed Thursday in the Legislature, just as state lawmakers began debating affordable housing bills.
At the start of the legislative session, lawmakers from both parties said they expected a package of bills to encompass defects reform and affordable housing. The idea is that the fear of defects lawsuits stymies construction of affordable condos and townhouses.
As a hearing on three affordable housing bills started Thursday – with less than a week left in the session – defects stakeholders said they had come to an impasse.
“We were willing to agree to new rules on disclosures and homeowner voting to proceed with a construction defect action, but our bottom line was defending families’ legal rights to protect their homes,” said Molly Foley-Healy, an attorney representing the Community Associations Institute.
Homeowners were adamant that any effort to curb defects lawsuits should preserve a jury trial, while some on the other side attempted to negotiate to allow for a specialty court or administrative process.
“While we are disappointed that we could not convince the other side to increase transparency and give homeowners a voice in whether their most precious asset – their home – is tied up in long and costly litigation, we are not without hope,” said Lakewood Mayor Adam Paul, a stakeholder with the Homeownership Opportunity Alliance, a group of business leaders, builders and elected officials that pushed for reform.
The group hopes to return next year with a new push in the Legislature.
The thrust of the effort was to require a majority of all homeowners in a development to agree to a lawsuit, rather than a vote by the association.
Durango officials have given initial support to a similar proposal that would require a majority vote. Homeowners associations also would have to enter into mediation or arbitration before heading to court, another idea floated in the Legislature.