In the first two months of its 2015 session, the Colorado General Assembly has introduced two bills that could have a significant impact on construction law in Colorado.
Senate Bill 15-177, introduced on February 10, 2015, by a bipartisan coalition in both chambers, amends the Colorado Common Interest Ownership Act’s requirements for an owner’s association to file a construction defect action in five significant ways. First, mediation or arbitration provisions contained in the original governing documents of a common interest community must be enforced even if those provisions are later amended or removed. Second, mandatory mediations must take place before a construction defect action can be filed. Third, an association board must provide advance notice to all unit owners of construction defect litigation and the notice must include projected costs, duration and financial impact of the construction defect litigation. Fourth, association boards must obtain the written consent of a majority of the owners of units to proceed with construction defect litigation. Finally, prior to the purchase and sale of a property in a common interest community, the purchaser must receive notice that binding arbitration may be required for certain disputes. The bill has been assigned to the Senate Committee on Business, Labor, and Technology.
On February 2, 2015, the General Assembly introduced House Bill 15-1197, which expands Colorado’s anti-indemnity statute, which currently only applies to private construction contracts, to apply to public construction contracts as well. The bill clarifies that public agencies cannot be indemnified by design or construction firms for the public entity’s own negligence, nor can design or construction firms be required to provide defense for such claims. Rather, indemnification and defense obligations are limited to the percentage of fault attributable to the design or construction firm. Under the bill contracts that violate these requirements are unenforceable. The bill has been assigned to the House Judiciary Committee.
