Construction Liability Reform On Tap as Part of Attainable Housing Solution

Housing Affordability | 0 comments

During the 2024 legislative session in Colorado, there is a notable focus on construction liability reform.   The effort is driven in large part by a lack of condo construction and availability as an important component of the broader housing availability mix.

The high frequency and high cost of construction liability litigation has driven insurance companies to raise insurance rates for developers. 

Policy Matters…in Construction Liability Reform

To fill the market demand for affordable condominiums, Colorado needs policy reform that balances homeowner and developer risk.  Specifically, a bi-partisan effort is in motion as NCLA and others advocate for changes to the state’s construction defects law, which governs builder liability for condominium construction. Here are the key points:

  1. Reforming Liability Rules: The proposed legislation aims to address the current rules that have led to insurance companies exiting the market and have made condo prices unaffordable for many first-time homebuyers.
  2. Right-to-Cure Provision: A significant part of the reform effort is the inclusion of a right-to-cure provision for builders. This provision would allow builders to address defects before legal action is taken, potentially reducing litigation costs and streamlining the resolution process.
  3. Affordability Impact: By reforming construction defect laws, lawmakers hope to encourage more condo development, which could help drive down housing prices and make homeownership more accessible for Coloradans.

Following on the heels of years of failed policy on construction liability reform, the 2024 legislative session aims to strike a balance between protecting consumers and promoting housing affordability by addressing construction defect laws and fostering a more sustainable real estate market.