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Change may be ahead for construction defect lawsuits

On Behalf of | Apr 25, 2017 | Construction Litigation

If a bill that passed the Colorado House on April 24 also passes the Senate, homeowners associations will be required to let condominium owners decide whether they want to be involved in class action lawsuits. The condo market has slowed in the last few years partly because of lawsuits filed by homeowners associations. Builders claimed that it had become too easy to file frivolous lawsuits.

Meanwhile, homeowners who wanted to sell or refinance their home might find out that they could not do so because their HOA was involved in a lawsuit. Under the bill, builders will have the right to speak to owners about how the situation could be mitigated rather than going straight to a lawsuit. Furthermore, a majority of owners would be required to vote about whether to pursue a lawsuit rather than the HOA board having the power to make this decision.

Half of the six bills dealing with construction defects introduced in this session have failed, but this one is expected to pass the Senate. There is another pending bill that deals with proportional assignment of damages among contractors.

Contractors, owners of condominiums and others may want to consult an attorney if an issue arises related to construction defects. The potential passage of this new law means that it might be possible to settle some of these issues out of court. Furthermore, the way construction defects are handled legally may also be changing. A homeowners association with many members who have problems with construction defects might also want to contact an attorney to learn how these owners should best address these defects under new laws.

Source: CBS Denver, “Construction Defects Bill Passes House, Expected To Pass Senate“, April 24, 2017