Colorado rejects bill to shorten statute of repose

Wednesday, April 22, 2015 @ 02:04 PM
Author: Jesse Witt

The House State, Veterans, and Military Affairs committee voted today to postpone Senate Bill 15-091 indefinitely, effectively killing the bill for the 2015 session.

As originally drafted, the bill would have given Colorado the shortest statute of repose in the United States. Senate amendments softened the impact of the bill somewhat, but it still would have reduced the amount of time that the owners of single-family homes would have to discover construction defects. Proponents argued that this was necessary because Colorado’s harsh weather conditions make it difficult for construction to last longer than five years. Opponents countered that construction defect laws only provide relief when a builder has violated a code or standard, which is unrelated to the expected lifespan of a product.

One of the Representatives noted that states like Alaska have much harsher weather patterns yet allow homeowners to bring claims up to ten years after construction is complete. Another questioned whether the bill would do anything to encourage affordable housing, a topic that has generated substantial media attention in recent months.

I testified on behalf of the Community Associations Institute, which opposed the bill. I gave one example from a recent arbitration where Colorado weather had actually delayed my clients’ discovery of defective workmanship and code violations: homeowners who bought their condominiums during a drought did not realize that the builder had failed to weatherproof their balconies until six years after the builder had turned the community over. I also noted that shortening the time for homeowners to bring claims would encourage litigation, since it gave parties less time to work out their differences before getting lawyers involved.

Other witnesses also described how the bill would hurt homeowners. Liberty Lewis, a professional engineer with SBSA, was particularly persuasive. She testified that she had worked to provide both quality control on new projects and repair designs on older projects that had failed; because drainage and soils problems often take several years to manifest, she explained that homeowners may not be able to identify defective work in a shorter period of time.

The committee ultimately rejected the Republican-sponsored bill on a 6-5 party line vote. The same committee will consider SB 15-177 next week, and it may meet a similar fate. That bill passed the Senate last month following extensive debate, butHouse Democrats have made clear that they will not approve a law that denies homeowners the right to have their claims heard in court.

Meanwhile, rumors of an alternative legislation have begun to circulate on the Hill. These alternatives seek to create incentives for quality construction, affordable housing, and prompt settlement of disputes. Although these bills are unlikely to give homebuilders the immunity that they have been seeking during the past three sessions, they could provide real solutions to the problems affecting the Colorado housing market.