Updated April 18, 2025
Two bills (HB25-1272 and HB25-1261) were introduced in February that are focused on construction defects legislation, bringing back the legislative fight from last year to combat the lack of condo development in Colorado. Both bills mirror the two construction defects legislation bills introduced in 2024 that both died, and seek to include updates to either support or oppose construction defects legislation. According to a report published by Common Sense Institute, condo development had fallen from a roughly 20% share of the new housing starts in 2008 to only 3% of the new housing stock in 2022, and has all but ground to a halt in 2024 – a drop attributed to the high number of lawsuits filed against developers and builders. According to Zillow, the median single-family home cost is $610,316 in Arvada, and $540,789 in Colorado. Condos provide a key income-aligned housing solution for Colorado workers, particularly those earning 60% – 120% of the Area Median Income. Increasing the stock of income-aligned housing is one key area of the Advocacy KAPS 2025 Policy Pillars.
The lack of development of middle-income housing stock is having significant effects for business leaders across the state, particularly in the Denver-metro area. More business leaders are seeing high housing costs and lack of income-aligned housing stock lead to higher employee turnover, difficulty recruiting and retaining top talent, and more members of the workforce moving out of the metro area or state due to high housing costs.
Additionally, another key piece of legislation was introduced that could be harmful to business leaders. SB25-157 does not deal with housing or construction defects specifically, but is tangential to construction defects as it would increase litigation against all businesses. This bill seeks to provide updates to the Consumer Protection Act and decrease barriers to litigation from consumers across all businesses.
As these bills have been freshly introduced, the Greater Arvada Chamber of Commerce Advocacy initiative seeks to provide updates on these key pieces of legislation. The Chamber will provide regular updates on the progress of these bills and insight into future positions on legislation from the Advocacy KAPS Committee.
HB25-1272: Construction Defects & Middle Market Housing
This bill focuses on addressing construction defects and promoting middle market housing development, such as condos. This bill has bipartisan support, and like last year, seeks to offer developers options against litigation that prioritize repair. Key aspects of this bill include:
- Claimants must file an affidavit from a licensed professional for construction defect claims while properties with a certificate of occupancy are presumed defect-free.
- Claimants are required to mitigate defects, and construction professionals must offer settlements or justify why repairs are necessary.
- The statute of limitations is set at 10 years (or 6 years with a qualified warranty) and pauses during mitigation efforts.
- Qualified professionals can use affirmative defenses, and executive boards need 65% owner approval to initiate defect claims.
- Monetary damages from successful claims must be first used for repairs.
Bill Sponsors: Representative Shannon Bird, Representative Andrew Boesenecker, Senator James Coleman, Senator Dyland Roberts.
As of March 21, 2025, this bill was assigned to the Housing Transportation, Housing & Local Government Committee and had its first committee hearing on March 18, 2025. The Committee reviewed and voted to advance this bill with a 12-1 vote in support, incorporating several key amendments:
- A removal of the provision to apply protections to middle-market condos specifically to apply to various housing construction.
- A removal of the presumption for builders that a home is defect-free if it receives a certificate of occupancy from the local government.
- Allows a defense to builders against litigation if a third-party inspector during construction and offers an extended warranty for plumbing, heating, and structural components.
- A requirement for homeowners whose builders agree to these conditions to accept repairs for defects and limits litigation between builders and homeowners.
- Changed the threshold for a condo owners association to file lawsuits to 65% of owners vote of support (rather than a simple majority vote of support as is currently allowed).
The bill advanced to the House Chamber for further review and was scheduled for its second reading on March 24, 2025. With an almost unanimous vote of bipartisan support for this bill in Committee, it has crossed a major hurdle that impeded its progress last legislative session. Governor Jared Polis has also expressed support for this bill, emphasizing its importance in encouraging middle-market housing and condo development across the state.
As of April 3, 2025, this bill was reviewed in the House, who voted 59-5 to advance this bill to the Senate with several key amendments. Some of these notable changes include:
- A requirement for inspectors to be independent from the builder
- Warranties cover repairs at no cost to owners
- Development and implementation of consistent standards for fixing identified construction defects
- Requirement that any legal settlement must first pay for repairs before attorneys fees
Last year, a similar construction defects bill passed the Senate, but was ultimately postponed indefinitely in the House Committee on Transportation, Housing, & Local Government. This year’s legislation is now headed to the Senate and has been assigned to the Local Government & Housing Committee, with a hearing scheduled for April 17, 2024. The Greater Arvada Chamber will continue to monitor and provide updates on this bill’s progress throughout the legislative session.
The Greater Arvada Chamber of Commerce is proud to have voted in support of this bill. This bill is in alignment with the 2025 Policy Pillars and B.O.L.D. 2026 Housing Initiative goal to increase access to income-aligned housing for the region’s workforce. Less than 18% of Arvada’s workforce lives and works in the city, meaning that a significant majority of workers are commuting to Arvada each day for work – 42% of whom travel 30-minutes or more one-way. Addressing construction defect litigation through this legislation will increase the availability of income-aligned housing, particularly for middle-income earners. Providing business- and homeowner-friendly solutions that support economic growth and strengthen businesses and the community’s ability to thrive.
As of April 18, 2025, this bill was introduced into the Colorado Senate and assigned to the Local Government & Housing Committee. The Committee voted 6-1 to advance the bill for discussion in the Senate. This week, the Senate passed the bill on its third reading with a 32-3 vote. It is now headed back to the House for consideration and a vote on accepting the amendments proposed in the Senate and Committee.
The bill has undergone significant revisions throughout this legislative session. It now proposes the creation of a voluntary Multifamily Construction Incentive Program, designed to support the construction of all multifamily housing (defined as attached housing with two or more units, including condos and townhomes) by reducing the risk of construction-defect litigation. Builders can choose to participate in the program by:
- Providing a warranty that covers any defect and damage at no cost to the homeowner within a specified period of time
- Conducting third-party inspections
- Recording builders participation in the program in the building process
In addition to the voluntary program, the bill aims to further reduce condo defect lawsuits by establishing more stringent requirements for defect claims, including: :
- Mandatory professional review of claims
- Limiting claims to significant defects
- Shortening filing deadlines
- Mandatory settlement offers or explanations from builders
- Claimants must try to fix defects before suing, and the status of limitations is paused during this process
The Sum and Substance recently covered the bill’s progress and highlighted concerns from some homebuilders about its potential impacts. This bill will be heard in the House for approval of Senate and Committee amendments, scheduled for a review on Monday April 21, 2025. The Greater Arvada Chamber will continue to monitor and provide updates on this bill’s progress in the last weeks of the legislative session.
HB25-1261: Consumers Construction Defect Action
This bill, which functions as a counter bill to HB25-1272, focuses on enhancing protections for homeowners related to improvements to real property. This bill aims to strengthen homeowner rights in construction defect cases and make it easier for homeowners to hold builders accountable for construction defects. By contrast to 1272, key aspects of this bill include;
- Requires construction professionals to provide detailed building records to claimants, including soil report, engineering calculations, and maintenance recommendations
- Mandates courts to award an 8% prejudgement interest to prevailing construction defects claimants
- Voids contract provisions that prohibit group lawsuits against contractors or impose additional requirements for legal action
- Changes the starting time for the two-year statute of limitations from when a defect is discovered to when the cause of the defect manifests and extends the period for defect claimants to file suits as a result
Bill Sponsors: Representative Jennifer Bacon, Senator Robert Rodriguez, Senator Faith Winter.
As of March 21, 2025, the bill had its first committee meeting on March 18th and was postponed indefinitely or “killed” in the House Transportation, Housing & Local Government Committee. The amendments to HB25-1272 were enough that the sponsor of HB25-1261, Rep Jennifer Bacon, worked with the committee to postpone her bill indefinitely.
SB25-157: Deceptive Trade Practice Significant Impact Standard
This bill aims to reduce certain perceived burdens on the enforcement of laws prohibiting deceptive acts. It aims to strengthen consumer protections by refining the standards for deceptive trade practice claims in Colorado.
This bill establishes that certain evidence that a person has engaged in an unfair or deceptive trade practice constitutes a significant impact to the public. This bill also clarifies that a deceptive trade practice claim cannot be based solely on contract breaches, negligence, or professional service damages unless the include: material misrepresentation of facts, failure to disclose material information, or actions not characterized as providing advice, judgment, or opinion.
Currently, an individual can not sue a business under the Consumer Protection Act unless there has been a large consumer impact (i.e. impacted a large group of people). However, this bill would eliminate that bar to allow for individual consumer litigation and would affect all businesses and increase the risk of litigation for all businesses.
Bill Sponsors: Senator Mike Weissman, Senator Julie Gonzales, Representative Javier Mabrey, Representative Brianna Titone
As of March 21, 2025, this bill was assigned to the Senate Committee on Business, Labor, & Technology on March 11, 2025. This bill passed the Senate Committee with a 4-3 vote and minimal amendments. This bill is currently being reviewed on the Senate floor for its second reading. This bill is currently scheduled to be reviewed by the Senate on Tuesday, March 25, 2025.
As of April 3, 2025, this bill was reviewed in the Senate and passed its second reading with amendments aimed at narrowing the scope of the new legal rights originally proposed. However, just days later, during its Third Reading on April 1, Senators voted 19-16 to postpone it indefinitely, ending its progress in this year’s legislative session.
The Colorado Legislative session is in full swing – stay tuned for updates on these key pieces of legislation from the Greater Arvada Chamber Advocacy KAPS as they continue to progress in the upcoming weeks. Please join the Advocacy Network to continue to stay informed on the 2025 Colorado legislative session.
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