HB 1279 Construction Defect Actions Notice Vote Approval
HB 1279 Construction Defect Actions Notice Vote Approval
HB-1279. This bill, sponsored by Representatives Garnett (D-Denver), and Saine (R-Firestone) and Senators Tate (R-Centennial) and Guzman (D-Denver), passed the House unanimously on Monday April 24th and will now be heard Monday, May 1st in the Senate Business, Labor and Technology Committee.
Nothing in HB 1279 stands in the way of individual owners who have a legitimate construction issue from seeking a legal remedy. Additionally, this bill protects homeowners by ensuring they are aware of a potential lawsuit that could impact selling or refinancing their home and tightens up voting procedures so a majority of homeowners must approve initiating a legal action against a builder rather than leaving that decision to a homeowner association board.
The bill does several things:
- Tolling Period – It sets a 90 day tolling of the statute of limitations (down from the originally proposed 120 day tolling period). This delay in the time period by which a lawsuit must be filed is also clarified to establish that the tolling period can happen only once, regardless of whether there is an amendment to the notice of filing a lawsuit (notice of claim). Previously there was ambiguity about whether attorneys could continue restarting the tolling period based on an amended claim.
- Voting/ballot integrity – A list of voters/unit owners must be shared with anyone served with the notice of claim (builders, contractors, architects, etc.). Further, there is only one vote per unit owner and they can only vote one time. This prevents the HOA Board from reviewing votes before the close of the voting period and then trying to change the minds of those that voted against pursuing litigation.
- Applicability – The bill language was cleaned up to clarify that the bill applies to all HOA’s, both pre and post 1992, when the Colorado Common Interest Ownership Act (CCIOA) was enacted.
- Definition of “Affiliate” – In the voting exclusions section the original bill ambiguously referred to affiliates of the development party as excluded from voting on commencing litigation. The current version of the bill tightens up the definition of who is considered an affiliate – someone that has a controlling interest in one of the development parties, or their spouse.
- Common elements – The introduced version precluded a vote if the defects claimed are on a common element (non-residential unit), for example a clubhouse or pool. The current version of the bill says that any remedies to repair that do not exceed $50,000 where the HOA is paying for the repairs do not require a vote. Any common element claim greater than $50,000 on a common element would require a vote. This was one of CAR’s biggest issues since any litigation, whether on a common element or on the residential units, clouds the title and can prevent unit owners from selling or refinancing their property.
- Bank-owned properties – These properties will count toward the vote if they vote. These properties were excluded in the original version of the bill.
- Non-responsive voters – These votes will not count. But the bill does allow builders/defendants to challenge in court any unit owners deemed non-responsive by the HOA board.
The Homeownership Opportunity Coalition, of which CAR is a member, believes this bill is a positive step in the right direction to building more attainable product for all Coloradans while also protecting homeowners and giving them a voice in whether or not to pursue litigation.
Thank you to each and every one of our members for your dedication on this critical issue, whether it was responding to our calls for action or providing your stories and insights, the time and energy you have put forward to voice your support for construction litigation reform was pivotal in helping us reach a compromise. We will continue to update you as the bill moves through the legislative process.
House Bill 1358: Disclose Amounts Payable To Real Estate Brokers
We are happy to report that House Bill 17-1358, sponsored by Representative Rosenthal (D-Denver) died in the House Business Affairs and Labor Committee yesterday on a vote of 11-2. As expected, HB-17-1358 was viewed as highly unnecessary and, as a result, was killed in committee yesterday afternoon. In fact, several committee members conveyed that they believe the free market should be allowed to work between flat-free and full service brokers/agents, and further, that government should not be asked to intervene on behalf of one company.
The bill would have required a broker in a real estate transaction (e.g., buyer’s agent, seller’s agent, transaction-broker) disclose in writing for any sale or lease of real estate, either as part of the contract or otherwise their commission. Brokers would also have been required to disclose their fees or the basis for calculating their fees on all marketing materials relating to any specific property, including on-line multiple listing services
CAR opposed this legislation and testified against the bill because it was initiated by one company to codify its own business model and improve its bottom line by recommending legislation that would force its business plan on an entire industry. HB-1358 is entirely unnecessary and does not provide any additional information to consumers that are not already available to them. Broker compensation and fees are already transparent to the appropriate consumers – the parties to the real estate transaction.
Fees are disclosed to all brokers through the MLS and among all parties and their brokers through their respective brokerage agreements. Further, a real estate commission is completely voluntary, negotiable and often varies depending on the type of transaction.
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