- A bill aimed at boosting condo construction in Colorado by reforming construction defects laws passed a key House committee in a 12-1 vote.
- The legislation would offer builders new legal protections if they meet quality standards, including third-party inspections and warranties on major systems.
- The measure raises the threshold for condo associations to sue over defects from a simple majority to 65% of owners, a change supporters say will reduce lawsuits and attract more builders.
- Colorado’s condo market has shrunk significantly, dropping from 25% of the housing market in 2008 to just 3% today.
Colorado Lawmakers Push for More Condo Development
A Colorado bill designed to revamp construction defect laws has moved forward in the state legislature, clearing a key committee vote. The proposal is intended to address the severe shortage of condominiums, which have become increasingly scarce in the state due to high construction costs and legal risks.
Condos once made up a quarter of Colorado’s housing market but now account for just 3%. Supporters of the bill argue that overly strict liability laws have driven developers away, limiting options for first-time homebuyers struggling with high mortgage rates and low inventory.
Key Changes in the Legislation
The bill would shield builders from certain lawsuits if they meet quality benchmarks, such as hiring independent inspectors and offering warranties on plumbing, heating, and structural components.
The bill also raises the threshold for condo associations to file lawsuits over construction defects to curb excessive litigation. Instead of requiring approval from a simple majority of owners, at least 65% must agree to take legal action. Supporters argue that this change will encourage more developers to build condos while ensuring homeowners have legal recourse for legitimate defects.
Get Smarter about what matters in CRE
Stay ahead of trends in commercial real estate with CRE Daily – the free newsletter delivering everything you need to start your day in just 5-minutes
Concerns Over Consumer Protections
While lawmakers and industry groups support the bill, opponents—particularly trial lawyers and homeowner advocates—warn that it could weaken consumer protections. They argue that raising the lawsuit threshold could make it harder for homeowners to seek legal remedies when defects occur.
Construction defect reform has been a recurring issue in Colorado since 2013, but previous legislative efforts haven’t significantly increased condo development. According to the National Low Income Housing Coalition, the state continues to struggle with one of the least affordable housing markets in the country, ranking eighth nationwide.
What’s Next?
With Gov. Jared Polis endorsing the measure, the bill now advances to the full House for debate. If it passes, it could reshape Colorado’s condo market and potentially pave the way for more affordable housing options.
