The Casa 25-1272 bill, sent to the Governor Jared Polis for the signature at the conclusion of the Colorado legislative session, on May 7, seeks to stimulate builders to build very necessary multifamily homes through a program that makes the construction liability insurance more attractive by reducing the premiums for builders.
If it is signed, the law of 2025 creates a guarantee program that contractors can choose to cover defects at no cost for the owner for a minimum of one year for labor and materials, two years for plume and electric work and six years for main structural components. It also requires an inspection of third parties during the construction that will lead to an employment certificate and provides for various resources in case a defect is discovered.
Jack Tate, President and CEO of Associated Builders and Rocky Mountain Chapter, said that while the contractors expect, they are not sure that the law is far enough to resuscitate the Condominity Market. “Expected defect defects definitions and expensive inspection mandates may not be viable compensation that reduces litigation or insurance loads in return,” he says. “Although the bill offers some legal protections for those who choose, many of our builders doubt their practice without further reform. Of course, we support policies that give rise to a net growth of the new development.”
The construction of Condominis in Colorado has been affected since the Law on the Action of Construction Defects in 2001, established a process for homeowners to demand builders when they found defects that could go from severe structural or air conditioning problems to minor complaints about finishes. As a result, the high costs of litigation of construction defects stopped for years the construction of middle market condominiums in Spain.
The architects and engineers will benefit directly and indirectly from the HB25-1272, as the new program increases the bar in the denomination design professionals in demands, requiring a more robust review certificate prepared by the professional colleagues with a degree that best suits the demands of construction defects than the current version, says Nikolaus Remus, director of the Lawyers of the Lawy Colorado.
“The best guarantees offered by builders and third party construction inspections will reduce the number of demands that we usually attract even when there is no evidence of a defect related to design,” says Remus. “The owners have a better way to correct defects before resorting to lawsuits to make -whole.”
But it will not be a quick solution. “Even if the developers rush to use the new program, they will happen years before these projects reach the market, and even more so they can see how the new dispute resolution processes work if a defect occurs,” adds Remus. “The adjustments may be needed if the market does not cover the program requirements as it is currently written. But we are still optimistic that HB25-1272 is an important step in the right direction to promote a better quality multifamily residential construction in Colorado.”
The pending legislation in Oregon also aims to address the inventory of low condominiums. The bill promotes the development of new condominiums by reducing the window for demands and reducing responsibility for developers and builders. The House 3746a Bill approved Oregon’s house with bipartisan support and is currently waiting for more actions to the Development Committee and Development of the Senate.
