Agenda Date: 04/01/2025
Subject:
Title
Resolution 31-2025: Supporting House Bill 25-1272 Construction Defects and Middle Market Housing
Body
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From: |
James L. Becklenberg, City Manager |
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Prepared by: |
Reid Betzing, City Attorney |
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Presentations: |
Reid Betzing, City Attorney |
PURPOSE:
Council consideration of a resolution supporting House Bill 25-1272 Construction Defects and Middle Market Housing.
LONG-TERM OUTCOME(S) SERVED:
Vibrant Community with a Rich Culture; Robust and Resilient Economy
DISCUSSION:
Housing inventory in Colorado has struggled to construct in recent years middle market housing. Middle market housing is generally defined as multifamily attached housing that is for sale. A major reason that developers have built less of this type of housing stock has been the high cost of insurance brought by litigation regarding these products.
In 2001 Colorado attempted to place guardrails on litigation of these products through the passage of the Colorado Defect Action Reform Act (CDARA) (C.R.S. Section 13-20-801 et seq). However, the Act has not led to a reduction in litigation nor a meaningful build of middle housing.
HB25-1272 aims to amend CDARA in hopes of reducing costly litigation making the construction of middle housing more appealing to developers.
Some of the highlights of HB25-1272 are:
• Requiring a third-party licensed professional’s affidavit to accompany construction defect claims against architects or engineers, ensuring that such claims are substantiated and reducing frivolous lawsuits.
• Establishing at rebuttable presumption that a property without identified defects at the time of receiving a certificate of occupancy complies with applicable construction standards, thereby providing clarity and assurance to builders and homeowners alike.
• Mandating that claimants that reasonable steps to mitigate alleged construction defects, promoting timely and cost effective resolutions.
• Updating construction defect claims to 10 years or 6 years if the construction professional provided a qualifying warranty.
• Increasing the required percentage majority from 51% to 65%.
• Requiring damages awarded to be used for repairs first.
• Exempting a construction professional from damages if the defect was caused by a weather condition, a homeowner’s unreasonable failure to timely mitigate damages.
Prior Actions or Discussions
At the March 18, 2025, regular meeting of council, the city attorney’s office presented an overview of current legislation which would have an impact on municipalities, including Littleton. Council directed staff to prepare a resolution supporting HB 25-1272.
FISCAL IMPACTS:
N/A
STAFF RECOMMENDATION:
Staff believes that the proposed legislation could help the construction of middle housing aligns with the city’s broader affordable and attainable housing strategy by addressing key barriers to middle market housing development and recommends the approval of Resolution 31-2025.
ALTERNATIVES:
Council could postpone consideration of this resolution.
PROPOSED MOTION:
Proposed Motion
I move to approve Resolution 31-2025 supporting House Bill 25-1272 Construction Defects and Middle Market Housing.