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House approves construction‑defect reforms and a voluntary multifamily incentive program to spur middle‑market housing

March 28, 2025 | 2025 Legislature CO, Colorado


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House approves construction‑defect reforms and a voluntary multifamily incentive program to spur middle‑market housing
The Colorado House passed HB 12‑72 after adopting committee amendments designed to narrow the bill’s focus and encourage builders to voluntarily follow enhanced standards for middle‑market multifamily housing. Representative Besenacker (sponsor) and Representative Byrd (Transportation, Housing and Local Government Committee) described the package of amendments as negotiated changes intended to make it easier for middle‑market attached housing — duplexes, triplexes, quads and small multifamily projects — to be built.

Committee changes struck an earlier proposed numeric price cap and instead established a voluntary Multifamily Construction Incentive Program. Builders may participate by offering warranties and using third‑party inspections during the building process; the bill clarifies who may serve as a qualified inspector and sets out a process for settlement offers and limited fee awards tied to the voluntary program. The sponsors said the goal is to fix defects early, reduce protracted litigation and encourage insurers to continue offering affordable coverage for builders.

Representative Byrd, who handled the bill in committee, said the amendments clarify the documents construction professionals must disclose during settlement negotiations, restrict attorney‑fee shifting to the voluntary program in some areas, and preserve existing claims and defenses such as statutes of limitation and repose. She said the changes were driven by stakeholder engagements with builders, homeowners, insurers and local governments.

Supporters called the bill an attempt to restore condo and small multifamily production that has contracted in Colorado because of perceived litigation and insurance risk. Critics said the reforms do not eliminate all risks and emphasized the need to protect homeowners’ existing statutory remedies. Several technical amendments were adopted on the floor to clarify third‑party inspection definitions, document disclosures and how settlements are applied for homeowners associations.

The House passed the committee report as amended and later approved the bill on final passage.

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