SB 24-112

Senate Bill 24-112, also known as the Construction Defect Action Procedures bill, clarifies that construction professionals are not required to provide warranties for their work and cannot be held responsible for the mistakes of licensed design professionals. It also changes the process for unit owners' associations in common interest communities who want to sue for construction defects by requiring a two-thirds majority vote from unit owners instead of just a simple majority, ensuring stricter approval before legal action can proceed. The bill has been signed into law and will affect how construction defect cases are handled in Colorado, making it harder for associations to initiate lawsuits against builders without broader owner support.

Official Summary

Section 1 of the bill adds disclaimers to the "Construction Defect Action Reform Act" that: Are not intended to impose an obligation upon construction professionals to provide an express or implied warranty; Apply to implied warranty claims; and Do not amend or change the terms of or limitation upon an express or implied warranty. The bill states that a construction professional is not vicariously liable for the acts or omissions of a licensed design professional for any construction defects. Under current law regarding common interest communities, a unit owners' association (association) must follow a process to obtain the approval of a majority of the unit owners before initiating a construction defect action (action). The approval process: Requires that a meeting be held to consider whether or not to bring the action (meeting); Requires the association to give the unit owners information about the proposed action and certain notices and disclosures before the meeting; Allows the association to amend or supplement the proposed action after the meeting; and Allows the association to omit nonresponsive votes from the total vote count, but allows construction professionals to challenge whether the association made diligent efforts to contact the nonresponsive unit owners. In connection with this process, section 2 : Requires the association to give notice to unit owners and reobtain unit owner approval to amend or supplement a proposed action after the meeting; Raises the number of unit owners who need to approve the action from a majority to a two-thirds majority; Requires a unit owner to sign the unit owner's vote; Requires the association to give the construction professionals a list of nonresponsive unit owners; and When unit owners' nonresponsiveness is challenged in court: Requires the court to stay the action against the construction professionals and requires the notification and voting process to be performed again unless the court holds that the association diligently contacted the unit owners; and Requires the association to disclose to the construction professionals all information relevant to the unit owners' nonresponsiveness within 21 days after the challenge has been filed.(Note: This summary applies to this bill as introduced.)