Denver City Council Passes Construction Defect Litigation Reform Ordinance

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After successive failures to pass similar legislation at the state level, the Denver City Council is following Lakewood and other municipalities to pass reforms to curb construction defect litigation. Designed to address concerns about the chilling effect construction defect lawsuits have had on condominium development, the ordinance provides that failures to substantially comply with the building code cannot support any type of defect claim unless the violation causes actual damage to property, loss of use of property, bodily injury, death, a risk of bodily injury or death or a threat to life, health or safety. The ordinance prohibits any strict liability or negligence per se claims based on a violation of the building code. The ordinance also provides that to the extent the building code specifically regulates any particular element, feature, component or other detail of construction, if the work complies with the building code, then it shall not be considered defective. The ordinance requires that before asserting a construction defect claim the HOA must provide certain information about the claim to all HOA members and obtain the consent of a majority of HOA members. The ordinance also provides that if a condominium declaration requires arbitration of defect claims the HOA cannot modify or eliminate that provision without the developer’s consent. The ordinance has been strongly supported by construction trade organizations and business leaders.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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