Last fall the Denver Regional Council of Governments approached the Colorado Association of Home Builders to inquire as to why there are no builders developing or constructing for-sale, multi-family projects along the newly constructed light rail lines. By surveying its membership, the CAHB quickly learned that the biggest impediment to such construction is Colorado’s litigation environment, i.e., “if you build it, they will sue.” This started a dialogue within the industry in order to determine what changes developers and general contractors would like to see made in order to consider again building for-sale, multi-family construction. The result of this dialogue is Senate Bill 13-052, introduced on January 16, 2013, and known as the Transit-Oriented Development Claims Act of 2013, sponsored by Senators Scheffel and Cadman and Representative DelGrosso. You can find the current iteration of SB 13-052 here. In short, the bill contains the following components:
With respect to construction defect actions involving transit-oriented development, the bill makes the following changes to the law:
Section 1 creates the “Transit-oriented Development Claims Act of 2013.”
Section 2 institutes a right to repair for construction professionals that receive a notice of claim with respect to a construction defect in a transit-oriented development.
Section 3 institutes a binding arbitration requirement for claims against construction professionals with respect to transit-oriented development. This section also makes construction professionals immune to suit for environmental conditions including noise, odors, light, temperatures, humidity, vibrations, and smoke or fumes casually related to transit, commercial, public, or retail use.
With respect to construction defect actions in general:
Section 4 clarifies that the 90-day tolling provision for construction professionals’ third-party claims found within C.R.S. § 13-80-104 tolls both the statute of limitations and the statute of repose. This section is meant to ameliorate the effects of Thermo Development, Inc. v. Central Masonry Corp., 195 P.3d 1166 (Colo. App. 2008) and to protect subcontractors and design professionals from ongoing “shotgun litigation.”
I expect that the plaintiffs’ construction defect litigation attorneys will oppose the bill. In addition, I expect that subcontractors and their carriers may oppose section four of the bill, believing that they would rather have claims brought against them within six years of substantial completion than to end “shotgun litigation.”
SB 13-052 was assigned to the Senate Judiciary Committee, but is not yet scheduled for hearing. For additional information regarding the history of the bill, check here.