Opinion: Dealing with construction defects this legislative session
Free Press Opinion Columnist
The 2015 Legislation Session has passed the half-way mark. Yet, Realtors, developers and builders are not even half way there in getting relief from a subject known as “construction defects.”
Several years ago the legislature decided homeowners needed more protection when building new homes. Instead of the one-year warranty, the warranty period was changed to eight years. This sounds like a good idea. However people working in the legal profession also found that if a “construction defect” was identified in a home in a subdivision, it was pretty easy to ask other homeowners if they would like to get some money from the builder for defects they “could” have.
One example to find (or develop) a defect was to stand with a high-pressure hose on the siding of a house for as long as it took for a leak to develop. Ah ha! It’s a construction defect. Other homeowners were asked to join in, and a lawsuit ensued with the insurance carrier for the builder settling the litigation.
With eight years to “discover defects,” the biggest “defect” often comes from actions of the homeowners in their landscaping and drainage use. When a developer creates a subdivision, drainage for every home site must be considered. The builder, likewise, must maintain the overall drainage, plus drainage away from each home and foundation.
The homeowner then comes in with their own idea of landscaping, watering, and how they want their property to look. This often results in changing the drainage plan. If plants or planters are too close to the house, water will soon be seeping down around the foundation. Water may additionally be diverted onto another property.
Yes, builders get blamed for this and it is called a “defect.”
Most actual defects by builders are discovered within the first two years of construction. Builders carry insurance to cover the “construction defects” issue. The eight-year provision is causing insurance companies to leave Colorado. Senator Ray Scott is working on a bill which would reduce the liability period from eight to two years.
The governor and mayor of Denver are both concerned about affordable housing. The affect of construction defects is hampering the effort. A bi-partisan effort is in process now to at least make it mandatory that all homeowners in a subdivision must be notified if litigation is pending — as in construction defects.
There is also discussion on how to make these lawsuits less profitable for those instigating filings. Right now, if a homeowner is not party to litigation, they don’t know there is litigation in their subdivision unless they try to sell or re-finance their property.
Why do we care? Many buyers prefer a new home. Everyone should have that choice.
Let’s hope the second half of the legislative session sees progress in softening the affects of construction defects. It would give the opportunity for more affordable new-home construction in Colorado while still protecting the new homeowner.
Free Press columnist Lois Dunn is a real estate broker and life-long Republican. She has a background in ranching, and she’s concerned now for the future of our children and our country. She also serves on the Government Affairs Committee for Grand Junction Area Realtors, and she’s a member of the Legislative Policy Committee for Colorado Realtors.
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