A Denver City Council panel approved proposed legislation for alleviating construction defect insurance risks. Construction defect legislation currently in place at the State level has effectively shut off condominium development. Eight other metro areas cities have approved similar ordinances. In Denver this year, 1077 apartments have been developed, but only 59 condominium units were developed – yet existing condominium sales make up over 29% of home sales. More at the DBJ
“the proposed ordinance takes two steps that are common in other cities that have passed similar laws and were a key part of bills that have died the past three years in the Legislature.
They require that a majority of condominium owners in a complex vote to proceed with any legal action, and also prohibit homeowners associations from removing any mandates in contracts that specify disputes with builders should be resolved through arbitration.
But Denver takes a new tact as well, offering a legal defense to builders if any purported defect met the standards of the city building code. And it requires that homeowners prove actual damage or a threat to their future safety, rather than just poor construction, before they proceed.
Broadwell acknowledged that the measure is unlikely to have an immediate impact on construction-insurance rates, as insurers must monitors patterns of lawsuits over a number of years before adjusting policy prices for changes.”