Coalition of mayors call on Legislature to pass construction defects reform legislation

Denver Mayor Michael Hancock is among a bipartisan coalition of 40 metro-area mayors who urged the Legislature to pass Senate Bill 156, a Republican-sponsored bill aimed at reforming construction defects litigation, on Thursday, Feb. 16, 2017. (Colorado Statesman file photo)

Denver Mayor Michael Hancock is among a bipartisan coalition of 40 metro-area mayors who urged the Legislature to pass Senate Bill 156, a Republican-sponsored bill aimed at reforming construction defects litigation, on Thursday, Feb. 16, 2017. (Colorado Statesman file photo)

A bipartisan coalition of metro-area mayors on Thursday called on members of the Legislature to pass Republican-sponsored legislation aimed at spurring condominium construction by adjusting the rules for settling disputes over construction defects.

And while the bill the mayors are backing bears plenty of similarities to legislation that has been blocked by Democrats in recent years, the former lawmaker heading a coalition of business groups and affordable housing advocates says things are different this year.

Writing on behalf of the Metro Mayors Caucus — Denver Mayor Michael Hancock, Aurora Mayor Steve Hogan and Boulder Mayor Suzanne Jones, along with 37 of their colleagues — Centennial Mayor Cathy Noon, the group’s chair, asked House Speaker Crisanta Duran, D-Denver, to give Senate Bill 156 a fair committee hearing and asked the other legislators to support the measure.

The bill, described as “Homeowners’ Association Construction Defect Lawsuit Approval Timelines,” is sponsored by state Sen. Owen Hill, R-Colorado Springs, Assistant House Majority Leader Cole Wist, R-Centennial, and state Rep. Lori Saine, R-Firestone. It’s scheduled to be heard in the Senate Business, Labor & Technology Committee on Monday, Feb. 27.

While SB 156 is likely to pass the GOP-controlled Senate, its fate is uncertain in the House. Democrats have said they plan to introduce their own attempts to tackle the issue.

Noting that 18 jurisdictions across the state — 17 cities and one county — have taken matters into their own hands in recent years, after the Legislature failed to fix the problem, Noon asked lawmakers to reach a solution this session.

“Our local governments have passed comprehensive construction defects reform because we understand that the law can protect consumers while allowing for the diverse housing development our communities desperately need,” she wrote.

The bill would require condominium owners and builders to submit disputes over construction issues to mediation or arbitration before filing a lawsuit. It would also require that homeowners association boards obtain the approval of a majority of owners before proceeding with litigation, as well as notify everyone who owns a unit about potential risks and benefits of pursuing a claim.

The bill is one of a number expected this session intended to increase construction of affordable housing as the state experiences rapid growth. Homebuilders say they’re reluctant to build condominiums — favored by first-time buyers and retirees — because they say current law makes it too easy to get bogged down in lengthy, multi-million dollar class-action lawsuits over faulty construction. But Democrats have blocked proposals in recent years, arguing that the law can’t jeopardize the rights of homebuyers.

The spokeswoman for a committee dedicated to protecting the rights of homebuyers as lawmakers consider construction defects reform told The Colorado Statesman that Hill’s legislation goes too far.

“We do not support Senate Bill 156, which would require homeowners to enter into forced binding arbitration and severely limit their access to the court system,” said Suzanne Leff, spokeswoman for the Community Associations Institute’s Colorado Legislative Action Committee. “We put homeowners and their communities first, seeking to protect them from defects, and cannot agree to give up their rights to a fair trial as Senate Bill 156 requires.”

The mayors join a broad coalition of affordable housing advocates, developers and members of the business community — known as the Homeownership Opportunity Alliance — supporting the bill.

While nearly identical legislation has failed recently — voted down in 2014 and 2015, last year’s version didn’t even make it past drafting — dwelling on that would miss the point, said Mike Kopp, a former Senate minority leader and president and CEO of the business group Colorado Concern.

“This is a substantially different situation,” Kopp, the alliance’s spokesman, told The Statesman.

“You’ve got many different members of the Legislature, and a different speaker,” he said, noting that former House Speaker Dickey Lee Hullinghorst, D-Gunbarrel, was undoubtedly less open to compromise on the matter than Duran.

Another key difference this year, he said, is that mayors and city councils have passed local versions of construction defect reform, and nearly all of them — including Denver’s approach, viewed by many as the measure that takes the toughest stance toward builders — incorporate the kind of binding arbitration contained in Hill’s bill.

“When the Legislature turned the mayors and the local governments away two years ago, they went back to their own communities,” Kopp said. “That is really the genesis of the movement to adopt local ordinances. You have a bipartisan group of mayors, bipartisan city councils — and now they’re coming to the Legislature and saying, ‘It’s your turn to take action.’ That is a major development.”

In addition, Kopp said members of the alliance — “and there are many,” he noted — spent last summer and fall meeting with lawmakers and legislative candidates, asking about the kind of approaches contained in SB 156. “Their answers,” Kopp said, “lead us to believe there is a pathway to success.”

Kopp said that the local ordinances demonstrate there’s bipartisan agreement on at least some solutions, but even the mayors in cities with comprehensive ordinances still want the Legislature to act.

“First, it’s not really in anybody’s interest to have a patchwork of different regulations and approaches,” Kopp said. “And they want to solidify their legal position — you’ve been seeing builders wait until this is resolved at the state level before committing to the new environment.”

Spokesmen for House and Senate Democrats didn’t respond to requests for comment on the mayors’ letter.

ernest@coloradostatesman.com

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