Colorado passed a construction-defects law nearly 10 years ago that critics now blame for a steep decline in new condo projects. Last week, Lakewood became the first community in the state to roll back some of its provisions.
Despite protests that the revisions would make Lakewood “the mecca of poorly built condos,” the city council voted 7-4 on Oct. 13 to give developers and builders the right to fix defects before they can be taken to court. The measure also requires condo association boards to get the OK from a majority of homeowners, rather than a majority of the board, before going to court, according to a report published in The Denver Post.
Sign-carrying protesters said the ordinance was “anti-homeowner and anti-consumer” and that it would weaken protections from shoddy construction practices.
But Lakewood mayor Bob Murphy said the ordinance should ease several problems that have haunted the state’s condo market. For one, it will help homeowners who have been unsuccessful in trying to renfinance or sell their condos because of litigation they didn’t support.
It may also spur more condo construction, which has fallen from 26% of new housing starts in the metro Denver area in 2008 to 4.6% in the second quarter of this year.
“The construction boom is awesome, but you can’t buy anything,” Chuck Ward, vice president of public affairs at the Denver Metro Chamber of Commerce, told the newspaper. “For that first generation of new home buyers, we’re kind of keeping them from having that opportunity to start their wealth-building.”
The state’s construction-defects law has been controversial. An effort to amend the law failed last year, but the issue is likely to pop up in the legislature again in 2015, the Post said. Lakewood is a city of about 140,000 just west of Denver.
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It will be harder for homebuyers to sue builders in Lakewood, Colo., after the city council eased provisions in a controversial state law passed in 2005. Backers hope the change will spur the construction of more condos.
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Really? The 28% plunge in condo construction is due to a contractor liability law and not the bursting of the housing bubble?!