Committee advances construction-defect reform bill aimed at restarting condo construction

The House Transportation, Housing and Local Government Committee advanced House Bill 12‑72 on a 12‑1 vote, sending the bill to the Committee of the Whole with sponsor support and a lengthy set of stakeholder-driven amendments.

The bill would create a voluntary multifamily construction incentive program for builders who offer prescribed warranties and submit to independent third‑party inspections during construction, while also adding procedural steps before homeowners may file construction‑defect actions. Sponsor Representative Basenicker, a primary sponsor, told the committee the intent is to “create market conditions favorable to building high quality homes while also ensuring homeowners have protections and meaningful recourse.”

Colorado leaders and industry groups told the committee they support the measure as a way to unblock condominium and townhome development that has plummeted in the state. “AI Colorado supports a diverse and attainable housing market and encourages efforts to change the current litigation climate in Colorado for condominium projects in particular,” said Nicholas Remus, a licensed architect and staff member with the Colorado chapter of the American Institute of Architects. Michael Conway, Colorado’s state insurance commissioner, also testified in favor, saying the bill may increase competition in the insurance market and “put downward pressure on premiums.”

The bill is the product of more than two years of stakeholder meetings, sponsors said, and is explicitly optional: builders would not be forced to join the program but could elect to do so to receive the statutory benefits. Under the bill’s warranty structure described in testimony, the sponsor said builders taking part would provide a workmanship warranty and specific component warranties — the sponsors noted language that codifies a one‑year workmanship warranty, a two‑year warranty for plumbing, HVAC and electrical components, and a longer warranty for structural issues — and the homeowner would generally be required to use the warranty remedies before pursuing a defect claim.

Supporters argued the combined package — inspections, warranties and changes to early notice and claim procedures — could reduce the frequency and severity of lawsuits that industry and insurers cite as a key reason condominium projects have become difficult to finance and build. “We think that this bill will have the ability to increase competition in the state,” Commissioner Conway said in testimony, while cautioning that he could not promise when or if carriers would reenter the market.

Opponents and homeowner advocates urged the committee to tighten protections for buyers, arguing some provisions could limit homeowners’ ability to pursue legitimate claims or transfer burdens to buyers. Witnesses who said they had experienced construction defects asked the committee to preserve meaningful warranty coverage and ensure third‑party inspectors are truly independent and qualified. Sponsors pointed to amendment language adopted in committee that tightened inspector qualifications, barred certain public corridor receptacles (for example to deter charging large lithium‑ion batteries in hallways), and required disclosure and procedural safeguards.

What’s next: House Bill 12‑72 passed out of committee by roll call and will be scheduled for a Committee of the Whole debate. The bill as amended directs multiple follow‑up implementation points to stakeholders and state agencies, and sponsors said they expect continued revisions as the measure moves through the legislative process.