Will a Statutory Right to Repair Construction Defects Increase First-Time Homebuyers?

Written by: on Thursday, February, 16th, 2017

On February 6, 2017, House Bill 17-1169 was introduced and assigned to the State, Veterans, and Military Affairs Committee. H.B. 17-1169 proposes a mechanism for a construction professional to offer to repair or offer to fund repairs for a construction defect prior to the initiation of a construction defect lawsuit. This is in effort to lower condominium prices stemming from high insurance premiums related to construction defect litigation.
H.B. 17-1169 stems, in part, from the prohibitively high costs of condominium ownership. The bill indicates that, due to the high risk and potential cost of litigation stemming from a construction defect action, developers are required to insure themselves against this potential liability. This, in turn, pushes condominium ownership out of the reach of first-time home buyers.

The proposed bill provides that:

1. Within 30 days after inspection of an alleged defect, a construction professional may: (1) offer to settle the claim or (2) elect to repair the defect.

2. The written notice to repair must include several statutory requirements such as: (1) a report as to the inspection findings and (2) an offer of monetary compensation if the claimant will be required to move out of the unit during repairs.

3. If no response is provided by the construction professional after the inspection, or the construction professional declines to settle or repair, the claimant may file suit.
H.B. 17-1169 further requires that, if the construction professional agrees to make repairs, both parties will comply with various requirements such as allowing access to the property, compliance with licensing and bonding requirements, completion of the work in a reasonable time frame, and compliance with the building code, among other things.

If H.B. 17-1169 passes the hope is that construction defect litigation will decrease, first-time home ownership will increase, and construction professionals will correct defects as outlined in the process above. This matter will be heard in the State, Veterans, and Military Affairs Committee on March 1, 2017.

If you have any questions on the above please contact any of our attorneys at (303) 432-9999.