Voters in Colorado Nov. 2 overwhelmingly turned back an effort to amend the state’s constitution and gut a construction defects reform measure passed by the legislature last year. In a victory for consumers and the real estate industry alike, voters defeated Amendment 34 by a more than 3-to-1 margin, protecting Notice and Opportunity to Repair legislation that has significantly reduced frivolous lawsuits since its passage.
“This vote represents a turning point in the national debate over whether consumers support non-judicial resolution of construction disputes, and the answer is that they do,” said Jerry Howard, executive vice president and chief executive officer of the National Association of Home Builders, which is leading a national effort to pass such legislation in all states. “Notice and Opportunity to Repair legislation substantially reduced the number of construction defect lawsuits filed in 2004 in Colorado, and we believe that will translate into fewer insurance claims and lower housing costs.”
The Colorado legislature passed Notice and Opportunity to Repair legislation in 2003, joining 22 other states with similar legislation on the books. NOR encourages non-litigious settlement of construction disputes while preserving the right of homeowners to sue if issues cannot be resolved. The legislation ensures that homeowners and homeowner association boards notify builders and developers that a problem exists, and provide a chance for the complaint to be addressed, before filing a costly lawsuit.
The number of lawsuits filed annually by the state’s top construction defect law firms fell dramatically under the new law, according to data obtained from the Colorado State Judicial Administrator. During the five years prior to the 2003 passage of the NOR legislation, 556 construction defect lawsuits were filed in Colorado, including 140 in 2002 and 80 in the first four months of 2003. So far this year, just 22 have been filed.
Amendment 34 would have encouraged lawsuits over construction disputes and raised the cost of housing for Colorado home buyers. It also included a troublesome “no limits” clause that would have vastly expanded the list of parties who could be sued in a construction dispute to include Realtors, advertising media, and previous owners of a property. Amendment 34 was rejected by 77 percent of Colorado voters in Tuesday’s election.
“We are pleased that Colorado said ‘no’ to higher insurance premiums and home prices,” said Howard. “Notice and Opportunity to Repair legislation is good for consumers and builders, and we hope that the groundswell of grassroots support for this common-sense approach encourages other states to follow suit.”
Topics Lawsuits Legislation Construction Colorado
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