A proposed Colorado bill aims to protect construction companies from litigious building owners. Senate Bill 106, Right to Remedy Construction Defects, was introduced to the Colorado Senate’s Local Government and Housing Committee on March 5, 2024. The measure is an effort to make building multi-residential properties throughout the state easier and more enticing.

Senate Bill 106 is an effort to make building multi-residential properties throughout Colorado easier and more enticing. Photo courtesy of Unsplash.

Senate Bill 106 would modify Colorado’s Construction Defect Action Reform Act. The news benefits glass and glazing companies, as more building construction means more business, especially in the residential sector, where high costs and limited inventory have impacted the market.

According to Ken Gronbach, a demographer and president of KGC Direct, the largest housing and construction market is on the horizon. That’s because more than 170 million people under 40 need housing. Gronbach explained will be a boon for the glass and glazing industry, but only if it can handle the expected demand.

To help meet that demand, Senate Bill 106 would add steps to protect construction companies from repeated lawsuits due to defects, such as window sealant failures. It would allow a construction company to remedy any claims against them before being sued. The measure also states that construction companies could solve the issue by working to fix the defect or hiring someone else to perform the work.

To bring a claim, at least two-thirds of condominium community association members must bring a case against a builder. However, the measure would prevent anyone from seeking damages from a construction company that fails to comply with building codes or standards unless the failure results in:

  • Actual damage to real or personal property;
  • Actual loss of the use of real or personal property;
  • Bodily injury or wrongful death; or
  • A risk of bodily injury or death to, or a threat to, the life, health, or safety of, the occupants.

The measure’s bipartisan sponsors say it will make the building process cheaper and more accessible for home builders, which would help create more multi-residential housing faster. More housing is needed in Colorado as its population increases. The bill’s sponsors write that while Colorado’s population is 20% more than in 2008, condominium construction, in particular, has slowed and is now 76% lower than it was between 2002-08.

However, several factors have limited the number of projects. Construction costs have increased, especially the high costs and frequency of construction liability litigation, which has caused insurance companies to raise developer rates.

According to the bill’s sponsors, Colorado needs a balanced public policy that “decreases insurance costs by reducing the magnitude and frequency of defect claims, ensures that every [building owner] has the right to pursue timely and effective remedies for defective construction, and ensures that such remedies are fair to the [building owner] but do not prevent the construction of affordable multifamily for-sale housing options.”

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