Amendments for SB24-106
Senate Journal, March 21
After consideration on the merits, the Committee recommends that SB24-106 be referred
to the Committee of the Whole with favorable recommendation.
Amend printed bill, page 5, line 22, strike "STATUTORY".
Page 6, line 19, before "MUST" insert "AND A NOTICE THAT THE CONSTRUCTION
PROFESSIONAL IS INVOKING THE RIGHT TO REMEDY".
Page 7, line 10, strike "INVOKED," and substitute "INVOKED AND ACCEPTED BY
THE CLAIMANT,".
Page 7, line 18, strike "OR".
Page 7, line 19, after "REMEDY," insert "OR IF THE CLAIMANT DOES NOT ACCEPT
A RIGHT TO REMEDY OFFER,".
Page 8, line 18, strike "REMEDY AND" and substitute "REMEDY, THE RIGHT TO
REMEDY IS ACCEPTED BY THE CLAIMANT, AND THE CONSTRUCTION
PROFESSIONAL".
Page 8, strike lines 25 through 27 and substitute:
"SECTION 4. In Colorado Revised Statutes, 38-33.3-303.5, amend
(1)(d)(I)(A) and (1)(d)(III) introductory portion as follows:
38-33.3-303.5. Construction defect actions - disclosure - approval
by unit owners - definitions - exemptions. (1) (d) Approval by unit owners
- procedures. (I) (A) Notwithstanding any provision of law or any requirement
in the governing documents, the executive board may HAS THE RIGHT TO initiate
the construction defect action only if authorized within the voting period by
owners of units to which a majority of SIXTY PERCENT OF THE votes in the
association are allocated. Such UNIT OWNERS VOTING IN FAVOR OF PROCEEDING
WITH A CONSTRUCTION DEFECT ACTION MUST ALSO ACKNOWLEDGE IN WRITING
THAT THE UNIT OWNER HAS RECEIVED THE DISCLOSURES REQUIRED UNDER
SECTION 38-33.3-303.5 (1)(c) AND THAT THE UNIT OWNER HAS BEEN INFORMED
OF THE UNIT OWNER'S OBLIGATION UNDER COLORADO LAW TO DISCLOSE KNOWN
DEFECTS UPON SALE OF THE PROPERTY. THE approval is not required for an
association to proceed with a construction defect action if the alleged
construction defect pertains ONLY to a facility that is intended and used for
nonresidential purposes and if the cost to repair the alleged defect does not
exceed fifty thousand dollars. Such THE approval is not required for an
association to proceed with a construction defect action when the association
is the DIRECT contracting party for the performance of labor or purchase of
services or materials.
(III) Vote count - exclusions. For purposes of calculating the required
majority vote under this subsection (1)(d) only, the following votes are
excluded:".
Page 9, strike lines 1 through 10.
Page 10, line 17, strike "No separate cause of action. THIS" and substitute
"Applicability - no separate cause of action. (1) THIS PART 8 DOES NOT
APPLY TO A MUNICIPALITY, AS DEFINED IN SECTION 31-1-101, OR A COUNTY, AS
DEFINED IN SECTION 30-6-100.3, IF EITHER IS ACTING IN ITS GOVERNMENTAL
CAPACITY.
(2) THIS".
Page 10, strike lines 21 through 27 and substitute:
"38-33.3-302. Powers of unit owners' association. (3) (c) IF AN
ASSOCIATION TAKES AN ACTION UNDER SUBSECTION".
Page 11, strike lines 2 through 10 and substitute "OR MORE UNIT OWNERS, EACH
CLAIM BROUGHT ON BEHALF OF A UNIT OWNER IS SUBJECT TO EACH DEFENSE,
LIMITATION, CLAIM PROCEDURE, AND ALTERNATIVE DISPUTE RESOLUTION
PROCEDURE THAT THE UNIT OWNER WOULD BE SUBJECT TO IF THE UNIT OWNER
HAD BROUGHT THE CLAIM.".
Local
Government
& Housing
Senate Journal, April 10
SB24-106 by Senator(s) Zenzinger and Coleman, Buckner, Gardner, Ginal, Kirkmeyer, Liston,
Mullica, Pelton R., Roberts, Simpson, Will; also Representative(s) Bird, Bradfield,
Clifford, Frizell, Lindstedt, Lynch, Pugliese, Snyder, Taggart, Wilson, Winter T.--
Concerning legal actions based on claimed defects in construction projects.
Amendment No. 1, Local Government & Housing Committee Amendment.
(Printed in Senate Journal, March 21, page(s) 552-553 and placed in members' bill files.)
Amendment No. 2(L.099), by Senator Zenzinger.
Strike the Local Government and Housing Committee Report, dated March 21,
2024.
Amend printed bill, strike everything below the enacting clause and substitute:
"SECTION 1. Legislative declaration. (1) The general assembly
finds that:
(a) Access to affordable, quality housing is foundational to personal and
financial stability and provides safety and life sustaining shelter, but it is also
a vehicle for reducing childhood poverty and increasing economic mobility and
intergenerational wealth;
(b) Colorado has a challenge insofar as, according to the state
demographer, it has the sixth most expensive housing market in the nation;
(c) Our state's housing supply has not kept pace with our population
growth. Between 2010 and 2020, the state added 126,000 fewer housing units
than in the prior decade, and as of 2022, Colorado has an unmet housing need
of between 65,000 and 100,000 units.
(d) To address this challenge, Colorado must not only increase the
number of homes that are available for purchase or rent, but it must also ensure
that the increased supply is a diverse combination of rental and home ownership
opportunities that will meet the needs, preferences, and varied income levels of
the people in our state;
(e) Multifamily for-sale housing is a critical component of this solution
because it helps close the affordability gap and adds a needed element to the
diverse mix of housing options the state can offer Coloradans, and historically
condominiums have been the most affordable housing choice for
owner-occupied housing;
(f) Notwithstanding the fact that Colorado's population today is 20%
greater than what it was in 2008, condominium construction in the front range
has slowed dramatically and is now 76% lower than it was in the years between
2002 and 2008, and between 2007 and 2022, the number of entities developing
condominiums decreased by 84%;
(g) Despite the downturn in construction, consumer demand for
condominiums remains strong in Colorado;
(h) There were 2.4 resold condominiums for every new condominium
sale in 2005, but in 2022, there were 30 condominium resales for every new
sale, and this is especially true for affordably priced condominiums;
(i) At the same time that fewer mid-priced condominiums are being
built, they are also becoming increasingly more expensive to construct, and that
cost is passed on to the consumer in the form of higher sales prices;
(j) In 2005, the majority of new and existing condominium units were
priced under $300,000 because of an adequate supply, but by 2023, only 2% of
new condominiums built were priced under $300,000, and due to the severe
lack of supply, currently only one-third of resale condominiums are available
for a price under $300,000;
(k) While costs of labor and materials are increasing for all types of
home construction, the cost increases associated with condominium
construction have outpaced those associated with single-family home
construction, and this is particularly evident as it relates to the cost for
contractors' liability insurance;
(l) In Colorado, the high costs and frequency of construction liability
litigation related to condominium development have driven insurance
companies to raise insurance rates for developers;
(m) In recent years, insurance costs for condominiums surged to 5.5%
of a project's hard costs, which was more than 233% higher than the insurance
costs of multifamily rental home projects; and
(n) Colorado needs balanced public policy that decreases insurance
costs by reducing the magnitude and frequency of defect claims, ensures that
every homeowner has the right to pursue timely and effective remedies for
defective construction, and ensures that such remedies are fair to the home
buyer but do not prevent the construction of affordable multifamily for-sale
housing options.
(2) The general assembly declares that this act will help bring down the
building costs of affordably priced homes and create more opportunities to
build wealth for Coloradans through home ownership.
SECTION 2. In Colorado Revised Statutes, 38-33.3-303.5, amend
(1)(d)(I)(A) and (1)(d)(III) introductory portion as follows:
38-33.3-303.5. Construction defect actions - disclosure - approval
by unit owners - definitions - exemptions. (1) (d) Approval by unit owners
- procedures. (I) (A) Notwithstanding any provision of law or any requirement
in the governing documents, the executive board may HAS THE RIGHT TO initiate
the construction defect action only if authorized within the voting period by
owners of units to which a majority of AT LEAST SIXTY PERCENT OF THE votes
in the association are allocated. Such A UNIT OWNER VOTING IN FAVOR OF
PROCEEDING WITH A CONSTRUCTION DEFECT ACTION MUST ALSO ACKNOWLEDGE
IN WRITING THAT THE UNIT OWNER HAS RECEIVED THE DISCLOSURES REQUIRED
UNDER SECTION 38-33.3-303.5 (1)(c) AND THAT THE UNIT OWNER HAS BEEN
INFORMED OF THE UNIT OWNER'S OBLIGATION UNDER COLORADO LAW TO
DISCLOSE KNOWN DEFECTS UPON SALE OF THE PROPERTY. THE approval is not
required for an association to proceed with a construction defect action if the
alleged construction defect pertains ONLY to a facility that is intended and used
for nonresidential purposes and if the cost to repair the alleged defect does not
exceed fifty thousand dollars. Such THE approval is not required for an
association to proceed with a construction defect action when the association
is the DIRECT contracting party for the performance of labor or purchase of
services or materials.
(III) Vote count - exclusions. For purposes of calculating the required
majority vote under this subsection (1)(d) only, the following votes are
excluded:
SECTION 3. In Colorado Revised Statutes, 13-20-804, amend (1);
repeal (2); and add (1)(e) and (3) as follows:
13-20-804. Restriction on construction defect negligence claims.
(1) No negligence claim seeking damages for a construction defect may be
asserted in A CLAIMANT IS BARRED FROM BRINGING OR MAINTAINING A CLAIM
SEEKING DAMAGES FOR A CONSTRUCTION DEFECT AS an action if such THE claim
arises from the failure to construct an improvement to real property in
substantial compliance with an applicable building code or industry standard;
except that such THE claim may be asserted if such THE failure results in
CAUSES one or more of the following:
(a) Actual damage to real or personal property;
(b) Actual loss of the use of real or personal property;
(c) Bodily injury or wrongful death; or
(d) A risk of bodily injury or death to, or a threat to the life, health, or
safety of, VERIFIABLE DANGER TO the occupants of the residential real property;
OR
(e) AN ACTUAL FAILURE OR LACK OF CAPACITY OF A BUILDING
COMPONENT TO PERFORM THE INTENDED FUNCTION OR PURPOSE OF THE
BUILDING COMPONENT.
(2) Nothing in this section shall be construed to prohibit, limit, or
impair the following:
(a) The assertion of tort claims other than claims for negligence;
(b) The assertion of contract or warranty claims; or
(c) The assertion of claims that arise from the violation of any statute
or ordinance other than claims for violation of a building code.
(3) THIS SECTION DOES NOT PROHIBIT, LIMIT, OR IMPAIR CLAIMS,
INCLUDING EXPRESS CONTRACT CLAIMS, THAT ARE NOT BASED UPON
VIOLATIONS OF AN APPLICABLE BUILDING CODE, MANUFACTURER'S
INSTRUCTIONS, OR INDUSTRY STANDARD.
SECTION 4. In Colorado Revised Statutes, 38-33.3-302, add (3)(c)
as follows:
38-33.3-302. Powers of unit owners' association. (3) (c) IF AN
ASSOCIATION TAKES AN ACTION UNDER SUBSECTION (1)(d) OF THIS SECTION FOR
A CONSTRUCTION DEFECT ON BEHALF OF TWO OR MORE UNIT OWNERS, EACH
CLAIM BROUGHT ON BEHALF OF A UNIT OWNER IS SUBJECT TO EACH DEFENSE
THAT THE UNIT OWNER WOULD BE SUBJECT TO IF THE UNIT OWNER HAD
BROUGHT THE CLAIM.
SECTION 5. Act subject to petition - effective date - applicability.
(1) This act takes effect at 12:01 a.m. on the day following the expiration of the
ninety-day period after final adjournment of the general assembly; except that,
if a referendum petition is filed pursuant to section 1 (3) of article V of the state
constitution against this act or an item, section, or part of this act within such
period, then the act, item, section, or part will not take effect unless approved
by the people at the general election to be held in November 2024 and, in such
case, will take effect on the date of the official declaration of the vote thereon
by the governor.
(2) This act applies to civil actions occurring and notices of claims
received on or after the applicable effective date of this act.".
Amendment No. 3(L.115), by Senator Sullivan.
Amend the Zenzinger floor amendment (SB106_L.099), page 2, line 19, strike
"and".
Page 2, line 25, strike "options." and substitute "options;
(o) Building codes are adopted to establish minimum requirements to
safeguard the public safety, health, and general welfare and to provide safety to
firefighters and emergency responders during emergency operations;
(p) The construction of affordable housing will only create financial
stability, economic mobility, and intergenerational wealth if the buyers of
affordable housing are not unfairly burdened with the cost to repair construction
defects caused by builder negligence; and
(q) Homeowners who are prevented from pursuing legal remedies for
construction defects may be prevented from refinancing or selling their homes
and may be subjected to financial insecurity, bankruptcy, or foreclosure.
(2) The general assembly declares that this act:
(a) Is intended to protect homeowner rights to seek redress for
construction defects and to be able to pursue the most efficient and
cost-effective dispute resolution process to be made whole; and
(b) Is not intended to be interpreted in a manner that would have the
effect of lowering the quality of construction in the state of Colorado or
encouraging builders to ignore building codes.".
Page 2, line 26, strike "(2)" and substitute "(3)" and before "declares" insert
"further".
Amendment No. 4(L.128), by Senator Gonzales.
Amend the Zenzinger floor amendment (SB106_L.099), page 3, line 43, after
"(3) (c)" insert "(I)".
Page 4, after line 5, insert:
"(II) THIS SUBSECTION (3)(c) DOES NOT PROHIBIT AN ASSOCIATION
FROM ASSERTING CLAIMS ON BEHALF OF TWO OR MORE UNIT OWNERS THROUGH
A SINGLE ACTION.".
As amended, ordered engrossed and placed on the calendar for third reading and final
passage.
(For further action, see amendments to the report of the Committee of the Whole.)
Senate Journal, April 10
SB24-106 by Senator(s) Zenzinger and Coleman, Buckner, Gardner, Ginal, Kirkmeyer, Liston,
Mullica, Pelton R., Roberts, Simpson, Will; also Representative(s) Bird, Bradfield,
Clifford, Frizell, Lindstedt, Lynch, Pugliese, Snyder, Taggart, Wilson, Winter T.--
Concerning legal actions based on claimed defects in construction projects.
Senator Kolker moved to amend the Report of the Committee of the Whole to show that
the following Cutter floor amendment, (L.103) to SB24-106, did pass.
Amend the Zenzinger floor amendment (SB106_L.099), page 3, strike lines
25 through 30 and substitute:
"(d) A AN UNREASONABLE risk of bodily injury or death to, or a threat to the
life, health, or safety of, the occupants of the residential real property; OR
(e) AN UNREASONABLE REDUCTION IN THE CAPABILITY OF, OR AN ACTUAL
FAILURE OF, A BUILDING COMPONENT TO PERFORM AN INTENDED FUNCTION
OR PURPOSE.".
Less than a majority of all members elected to the Senate having voted in the affirmative,
the amendment to the report of the Committee of the Whole was lost on the following roll
call vote:
YES 11 NO 23 EXCUSED 1 ABSENT 0
Baisley N Ginal N Marchman Y Simpson N
Bridges N Gonzales Y Michaelson N Smallwood N
Buckner N Hansen N Mullica N Sullivan Y
Coleman N Hinrichsen N Pelton B. N Van Winkle N
Cutter Y Jaquez Y Pelton R. N Will N
Danielson Y Kirkmeyer N Priola Y Winter F. E
Exum Y Kolker Y Rich N Zenzinger N
Fields N Liston N Roberts N President Y
Gardner N Lundeen N Rodriguez Y
Senate Journal, April 11
SB24-106 by Senator(s) Zenzinger and Coleman, Buckner, Gardner, Ginal, Kirkmeyer, Liston,
Mullica, Pelton R., Roberts, Simpson, Will; also Representative(s) Bird, Bradfield,
Clifford, Frizell, Lindstedt, Lynch, Pugliese, Snyder, Taggart, Wilson, Winter T.--
Concerning legal actions based on claimed defects in construction projects.
A majority of those elected to the Senate having voted in the affirmative, Senator
Zenzinger was given permission to offer a third reading amendment.
Third Reading Amendment No. 1(L.129) , by Senator Zenzinger.
Amend engrossed bill, page 6, line 18, strike "SECTION 38-33.3-303.5 (1)(c)"
and substitute "SUBSECTION (1)(c) OF THIS SECTION".
The amendment was passed on the following roll call vote:
YES 29 NO 4 EXCUSED 2 ABSENT 0
Baisley Y Ginal Y Marchman Y Simpson Y
Bridges Y Gonzales N Michaelson Y Smallwood Y
Buckner Y Hansen Y Mullica Y Sullivan N
Coleman Y Hinrichsen Y Pelton B. Y Van Winkle Y
Cutter E Jaquez N Pelton R. Y Will Y
Danielson Y Kirkmeyer Y Priola N Winter F. E
Exum Y Kolker Y Rich Y Zenzinger Y
Fields Y Liston Y Roberts Y President Y
Gardner Y Lundeen Y Rodriguez Y
The question being "Shall the bill, as amended, pass?", the roll call was taken with the
following result:
YES 25 NO 8 EXCUSED 2 ABSENT 0
Baisley Y Ginal Y Marchman Y Simpson Y
Bridges Y Gonzales N Michaelson Y Smallwood Y
Buckner Y Hansen Y Mullica Y Sullivan N
Coleman Y Hinrichsen Y Pelton B. Y Van Winkle Y
Cutter E Jaquez N Pelton R. Y Will Y
Danielson N Kirkmeyer Y Priola N Winter F. E
Exum Y Kolker N Rich Y Zenzinger Y
Fields Y Liston Y Roberts Y President N
Gardner Y Lundeen Y Rodriguez N