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Committee hears second construction-defect bill ("12 72") aimed at middle‑market housing and HOAs
Summary
Committee members and city staff discussed a second bill called "12 72" that would create a voluntary path for certain builders, adjust HOA voting thresholds to 65%, require mitigation duties, and change statutes of limitations for defect claims — prompting questions about local impacts and insurer behavior.
Denver’s Finance and Governance Committee reviewed state bill language referred to in the briefing as "12 72," a construction-defect measure described by city staff as focused on middle-market and multifamily housing and as creating a voluntary path builders may elect to use.
Jill Jennings Gohlek, deputy director for Community Planning and Development, said the bill “requires a person filing a construction defect action against an architect or engineer to file with the complaint an affidavit of a third party licensed professional” and “increases the approval amount for a majority of homeowners to 65% when an executive board of a homeowners association, or HOA, is involved in initiating a construction defect claim.”
Adam Paul, government affairs with the mayor’s office, told the committee the mayor’s office supports 12 72, describing it as attempting to strike a balance between consumer protections and encouraging the condominium market to return. Paul said the city has not taken a unified council position on the two bills and that council members would weigh in as amendments arrive.
Key provisions discussed: staff said the measure would (as described to the committee) establish a duty to mitigate alleged defects, set a 10-year statute of limitations for many construction-defect claims (6 years if a warranty applies), create a rebuttable presumption when a certificate of occupancy is present, and require HOAs successful in claims to apply damages first to repair the defect.
Concerns raised: Councilmember Chris Hines described historical condominium litigation in Denver and said a 65% approval threshold could be impossible to reach in some buildings; he also questioned reliance on certificates of occupancy as a litigation threshold. City legal counsel said the bill could create conflicts with local code and alternative dispute resolution. Staff and council members emphasized insurance-market effects: several speakers said insurers left the state market for condo coverage and that legal changes affect development costs and entry of insurers.
Next steps: presenters said a sponsor amendment expected in committee would narrow the bill to multifamily construction, confirm the voluntary nature of the program, and clarify that claims under the program must relate to damage that will be repaired. Staff asked to review amendment language and to share summaries for council feedback. The briefing was informational and no vote was taken.
