A year ago this month, a bill went into effect that was designed to make it more difficult for condominium associations to bring big-ticket construction-defect lawsuits. The question now is whether it’s had any impact.
“I think the early signs have been pretty good,” said Jonathan Pray, shareholder at Brownstein Hyatt Farber Schreck. “I’ve seen in my own practice a real market increase in developers who are not only talking about condos but are actually taking the plunge and going forward with the projects.”
After years of interest, the bill, House Bill 1279, passed unanimously in the State House and Senate last year, and the governor signed it into law in May 2017. The law went into effect Sept. 1, 2017. Prior to the law’s passage, builders argued that the barrier to bring a multi-million-dollar class action lawsuit for construction defects in a condominium project was too low. Back then, three people on a five-person condo board could move forward with such a lawsuit on behalf of the entire building. The new law requires a majority of unit owners in a building to agree to pursue legal action and also states that that action can only be taken during a 90-day period in which attorneys and builders would have a chance to argue their case.