Construction Defects Legislation: A Win for Compromise and More Housing

After years of gridlock, a construction defects bill passed both Colorado legislative bodies and was signed by Governor Hickenlooper. Although it didn’t completely satisfy the developer community, the legislation reflected sufficient compromise to get it out of committees and through the leadership of both parties.

The main proponents of change in the law were developers, chambers of commerce and other business promotion groups. The major road block has been a Democratically-controlled House. Most importantly for securing compromise from Democrats were local government officials who argued the hair trigger homeowner litigation rules were undermining providing housing, affordable and otherwise, in their communities. Thousands of potential condo units were being held as expensive rental units due to fears of class action suits easily filed against developers and builders.

Although there are fewer State House reporters than decades past, big stories still get covered from a variety of angles. The Colorado Statesman still publishes, although mostly behind a pay wall. Ernest Luning covered the construction defect compromise on April 19.

Probably the state’s best political website is Colorado Politics sponsored by the Colorado Springs Gazette. Peter Marcus posted a story on the Governor signing the bill, with the sponsor and leadership taking a bow. Democratic House member Alec Garnett and Speaker Crisanta Duran were recognized with Republicans Lori Saine and Cole Wist. A host of interest groups also joined the celebration.

The Denver Post’s John Aguilar did an analysis as to why it had been so hard to reach a compromise, with a focus on the money that trial lawyers and business groups had spent on legislative races in recent years.

My comment was that in 2017 Democrats, with a five-seat majority in the House, were less vulnerable than past years.

But the conversation on construction defects reform had evolved to the point where Democratic leadership in the statehouse was under more pressure to compromise, political analyst Floyd Ciruli said. He noted that not only has there been bipartisan support for reform bills in past sessions, but affordable housing advocates and a wide array of metro-area mayors are now pushing for it.

HB 1279 likely passed this time because of the greater political advantage Democrats gained in the House last November, picking up three seats to take a 37-28 majority, he said. Previous Democratic speakers had less room to negotiate when the balance of power in the House was thinner, Ciruli said, and money from the Colorado Trial Lawyers Association was critical to keeping their majority alive.

“There is no doubt that the Democratic leadership in the last couple of terms found it incredibly difficult to find compromise,” he said. “Their entire control of the body really depends on having access to those funds and having the ability to target those funds to specific seats.

“When their majority is that close, they don’t mess around.”