A bill aimed at revitalizing Colorado's condo market won approval from the Senate committee, passing with a 6-1 vote. Backers hope the bill will help address the challenges faced by condo developers in the state, but opinions on its potential effectiveness vary.

Since the collapse of the condo market in 2010, primarily due to changes in property and casualty insurance, insurance costs have made affordable condo construction difficult, with premiums as high as $40,000 per unit. This has left many potential homeowners struggling to afford condos priced around $400,000.

Ted Leighty from the Colorado Association of Homebuilders expressed concerns, stating, “HB 1272 doesn’t go far enough to solve the issue it is intended to address.” He emphasized the need for clear definitions regarding "defects" to prevent frivolous lawsuits over minor technicalities, such as incorrect nail spacing, which have previously led to costly legal disputes.

Lokal Homes, a prominent Denver-area builder, announced it would exit the condo market despite the bill, citing that “HB 1272 has not been convincing enough to change our strategy,” according to Nate Levy, the company's marketing director.

Jack Tate, representing the Associated Builders and Contractors of Colorado, echoed concerns about the bill’s potential to increase liability, saying, “We’re neutral because our members will build those projects anyways but strongly support the idea that we need more condos and residential properties for sale.”

State lawmakers, including Speaker Pro Tem Andrew Boesenecker, D-Fort Collins, are optimistic about the bill's potential to support builders while offering flexibility. He emphasized that “This is a homebuyers' bill, not a homebuilder's bill.”

The bill, as introduced, requires third-party inspections and mandates that builders respond to identified defects. Additionally, it includes provisions for addressing legal disputes, such as a rebuttable presumption that properties are free from construction defects if they have a certificate of occupancy.

House Bill 1272 now heads to the Senate floor for further consideration.

Originally reported by Colorado Politics.