A coalition of special interest groups, led by the Metro Mayors Caucus and Denver Chamber of Commerce, are behind the introduction of Senate Bill 15-177 (“SB 177”). While this bill was brilliantly crafted to provide immunity to builders for their construction defects, the spin being put on this bill is equally brilliant. In order to debunk the spin which has taken on mythical proportions, I believe it is essential to shine a light on their myths – one myth at a time.

Myth Number 1: SB 177 Will Promote the Construction of Quality Affordable Housing


If SB 177 passes both chambers of the Colorado General Assembly and is signed into law, there is no question that it will promote the construction of all housing – including affordable housing. What developer wouldn’t want to build homes if they won’t be held responsible for their construction defects? However, it doesn’t take a rocket scientist to figure out that providing builders with immunity does not promote quality construction. 


Immunity will give less than reputable builders the green light to cut corners on their construction in order to maximize their profits. These builders will hire the least expensive subcontractors and will cut corners on materials utilized in their construction. Further, without the risk of being held responsible for their defective construction, these builders will not budget for quality controls. 


Who would ultimately pay for the defective construction in condominium associations? The homeowners would! When builders cannot be held responsible for their shoddy construction, the defects become the repair responsibility of the condominium associations. Since assessments are typically the only income stream for these nonprofit corporations, the owners who unknowingly purchased defective homes are the ones who will have to pay for the repairs through assessment increases or special assessments. 


While SB 177 would be a nightmare for the innocent purchaser of any defective home, for those purchasing affordable housing units – it would be a tragedy. It takes years for many individuals purchasing affordable housing units to save the funds necessary to fund a down payment on their new home. After sacrificing financially to come up with the down payment, it is not unusual for these folks to have little left in the way of savings. As a result, these individuals will rarely have the financial resources available to pay the assessment increases or special assessments levied by their associations to repair the defective construction. The net effect is these folks would stand to lose their homes in foreclosure. I have to believe that legislators in Colorado will not allow this to happen!


Stay tuned to this blog for the debunking of the next "Myth of SB 177."