Capitol Connection – February 20, 2024
Legislative Advocacy This Week at the Capitol
We are in the 42nd day of the state’s 120-day legislative session. The Colorado Association of REALTORS® has 69 bills in its stack out of the 529 total introduced. CAR’s political advocacy efforts achieved significant amendments in landlord-tenant legislation protecting the property rights of housing providers and ensuring they can place their properties on the for-sale market. Moreover, CAR introduced a counter-proposal to SB-033, provided amendments to the right of first refusal and offer bill (HB-1175), and is supporting construction litigation reform to bring back entry-level condominium construction to Colorado through SB-106.
Bill Updates
(Oppose) HB24-1300 Home Sale Wildfire Mitigation Requirements
Sponsors: Rep. Story, Rep. Brown, and Sen. Marchman
HB 1300 would require wildfire mitigation inspection and compliance at the point of sale for existing residences in 12 specific counties. The mitigation standards are to be based on the Colorado State Forest Service’s best mitigation practices. A certification of compliance form would need to be completed by an authorized inspector, copied to the homeowner, and filed with the county to be documented as part of the real estate closing.
CAR is opposing the bill because it is an unfunded mandate that complicates the home buying process at a time of record low inventory, high interest rates, and volatile property insurance markets. The bill would increase the cost of housing and if a buyer cannot afford the new compliance requirements, then 150% of estimated mitigation costs would be retained in escrow and must be signed off by the purchaser who would have 180 days to bring the property into compliance. The funds in escrow have the potential to generate disputes between contractual parties if they remain in the account after mitigation. Furthermore, achieving adopted wildfire mitigation standards does not guarantee adequate property insurance coverage or eliminate the possibility of being uninsured. If one property achieves full compliance, but surrounding properties cannot do the same, then property insurance can still be denied due to wildfire risk.
HB24-1299 Short-Term Rental Unit Property Tax Classification
Sponsors: Rep. Bird and Sen. Mullica
The Colorado Association of REALTORS (CAR) worked proactively with the bill sponsors, Rep. Bird and Sen. Mullica, to exempt a property owner’s primary and secondary residence from being defined as a “commercial short-term rental unit” which subjects the property to a significantly higher commercial lodging rate. This bill allows small investors to use one or both properties as a short-term rental at the residential property tax rate while allowing those that are running a business of STRs to be charged at the higher lodging rate. A number of Coloradans aspire to own a second home elsewhere in our state or are looking to purchase property for retirement. A number of these property owners offer STRs to offset a mortgage or increased housing costs, while others may rent their property when not in use by the owners. Colorado should not discourage this level of homeownership or affect retirement plans.
This bill runs counter to SB24-033 which simply puts every property owner who uses their property for 90 or more nights as a STR on the same level as major hotel brands by assessing all of them at the commercial lodging rate for property taxes. Neither bill is scheduled for committee yet, but they are likely to be in March. CAR’s Legislative Policy Committee will soon take a position on this legislation.
(Support) SB24-106 Right to Remedy Construction Defects to Remedy Construction Defects
Sponsors: Sen. Zenzinger, Sen. Coleman, and Rep. Bird
We are working in support of this bill along with other like-minded organizations through a coalition, Homeowner Opportunity Alliance. This bill will help to increase the supply, quality, and accessibility of affordable housing units and create more opportunities for Coloradans to build wealth through homeownership. This bill will:
- Right-to-remedy – If a construction professional is notified of a defect claim, this provision gives the property owner the choice to either have the original contractor make the repair, or work with the contractor to find someone acceptable to perform the remedial work. If there are problems with the remedial work, they can determine how to proceed with the entity responsible for providing the remedial work.
- Informed consent – This consumer protection provision ensures the disclosures required in statute are honored and that homeowners receive their disclosures prior to providing their written consent to litigate a construction defect claim by a homeowner’s association, and it requires consent of 67% of the actual unit owners prior to pursuing litigation. This threshold is consistent with every other required vote under the Colorado Common Interest Ownership Act (CCIOA) to encumber common elements or to repair or replace common elements. Additionally, the provision requires homeowner’s associations to retain notices, and if a notice of claim changes, they are required to again inform homeowners and receive their consent.
- Negligence per se – Under current law, claims often contain technical code violations that do not harm the performance of a home or affect its structural integrity, functionality, or create a health and safety issue. In this provision, no claims for negligence can be asserted for noncompliance with technical code violations, unless those violations cause actual damages to real or personal property within a home or complex, cause bodily harm or wrongful death, or an imminent and unreasonable threat to life.
“Don’t Miss Out on the Action – Sign up for REALTOR® Party Mobile Alerts”
Text REALTORS to 30644
REALTOR® Party Mobile Alerts offers REALTOR® Associations and REALTORS® a way to stay connected directly from their cell phone or tablet. When a national or state legislative call for action is launched, subscribers get a short text message containing information to take action. Stay in the “know” as housing legislation heats up at the state capitol and nationally this year.
*If you sign up for RPMA and receive a Call For Action, taking action does NOT subscribe your information to a listserv.* RPMA and CFA are strictly to inform members of legislation that the National Association of REALTORS® or Colorado Association of REALTORS® needs grassroots engagement.
RPAC
*Needed* We are looking for auction items for our Spring Summit RPAC reception, if you have any fun experiences you can donate to RPAC, please reach out tolcecil@coloradorealtors.com.
SAVE THE DATE – RPAC Reception at Spring Summit Tuesday, April 9th at 4:15pm -6:15pm. We will have a live auction with some great prizes. You don’t want to miss this opportunity to get your investments in for RPAC! Register for the RPAC Reception here.
Join us from April 8-10, 2024, at the Hyatt Regency in the Denver Tech Center for the CAR Spring Summit, a conference designed for REALTORS® like you who are seeking to broaden your industry engagement. This summit combines networking, innovation, and professional development.
Events
Commission on Property Tax Community Conversations
The Commission on Property Tax is required to study and make recommendations for a property tax structure. The Commission wants to hear from the public throughout the state. See below for more details and how to sign up to attend.
The last public meeting held by the Property Tax Commission is in Fort Morgan, CO.
Meeting Details:
- Morgan Community College
- 920 Barlow Rd
- Founder’s Room
- February 24th at 10:00 – 11:30 AM
- Sign up to attend here
- Zoom links here
NAR / ICYMI
Homeownership rates for racial minorities increased in 2022, with Asian and Hispanic Americans achieving historic peaks.2 Despite these advancements, disparities persist among racial and ethnic groups, notably with Black homeownership lagging. People of color continue to endure significant buying challenges throughout and after their home purchases, according to a report released today by the National Association of Realtors®.
Economist: ‘Timing’ the Market May Not Work for Buyers
Home shoppers are sensitive to mortgage rates, which was made clear this week with an increase in the average for the 30-year fixed-rate mortgage. The rate rose to 6.77%, and mortgage applications for home purchases fell 3%, according to the Mortgage Bankers Association.
Lawmaker: REALTORS® Woke Us Up to Stark Housing Reality
The forum, which brought together economists, housing analysts and policymakers, highlighted several pieces of housing legislation on the table in Congress and backed by the National Association of REALTORS®. The proposed More Homes on the Market Act(link is external), for example, would increase the capital gains tax exclusion and incentivize longtime homeowners to sell. Other legislation is under consideration for tax credits that would attract private investment to rehab owner-occupied homes and convert empty office buildings into residential properties.