s_blt_2017a_2017-02-27t14:07:37z1 Hearing Summary

Date: 02/27/2017

Location: RM 271

02:29 PM -- SB 17-156



Senator Hill introduced Senate Bill 17-156, concerning prerequisites to the authority of a unit owners' association to pursue resolution of disputes involving construction defects. The bill requires that a homeowners' association (HOA) use mediation or arbitration before a lawsuit can be filed in disputes involving construction defects against a development party. If an HOA had governing documents that required mediation or arbitration at the time of construction, the HOA must adhere to that original policy in construction defects cases.



The parties involved in a dispute must mutually agree upon a mediation or arbitration service provider, with preference given to a provider specified in the HOA governing documents. The mediation or arbitration must take place at a mutually agreeable location in the judicial district in which the HOA is located. The mediator or arbitrator must:



be a neutral third party;

make certain disclosures before being selected; and

be qualified in accordance with applicable state or federal laws governing mediation and arbitration.



If no mediation or arbitration service provider is outlined in the HOA governing documents and the parties are unable to agree upon a provider, the parties may petition the district court in the HOA's jurisdiction to appoint the provider. In the arbitration of a construction defect action, the arbitrator is required to follow the substantive state law with regard to any claim, defense, or remedy granted, and a failure to do so is grounds for a district court to vacate or refuse to confirm the arbitrator's award.



In addition to submitting to mediation or arbitration before filing a lawsuit, the HOA's executive board must send an advance notice to all unit owners that includes a general description of the claim, the relief sought, and a good-faith estimate of the benefits and risks involved in a format outlined in the bill. The HOA's executive board must obtain signed, written consent from a majority of the unit owners acknowledging that the owner has received the notice required under the bill and approves the board's proposed action.



Prior to the purchase and sale of a property in an HOA, the bill requires that a disclosure notice inform the purchaser that he or she is required to become a member of the HOA, and that the community bylaws may require that certain disputes be resolved by mandatory binding arbitration.



The bill also adds notice requirements for lawsuits by HOAs in matters other than construction defect claims. Specifically, the HOA must provide notice to unit owners at least 30 days prior to commencement of the legal action.





02:35 PM -- Mayor Cathy Noon, Metro Mayor's Caucus, City of Centennial, spoke in support of the bill. She responded to questions from the committee.



02:32 PM -- Mayor Jackie Millet, City of Lone Tree, spoke in support of the bill. She responded to questions from the committee.



02:42 PM -- Mayor Pro-tem Angela Lawson, City of Aurora, spoke in support of the bill. She responded to questions from the committee.



02:48 PM -- Mayor Herb Atchison, City of Westminster, spoke in support of the bill. He responded to questions from the committee.



02:52 PM -- Tom Clark, Metro Denver Economic Development Group, spoke in support of the bill. He responded to questions from the committee.



02:55 PM -- Mike Kopp, Colorado Concern, spoke in support of the bill. He responded to questions from the committee.



03:11 PM



Senator Hill commented on the preceding testimony.





03:34 PM



Committee discussion continued.





03:37 PM -- Pam Valvano, representing herself, spoke in opposition to the bill. She responded to questions from the committee.



03:45 PM -- Suzanne Leff, Community Associations Institute (CAI), spoke in opposition to the bill. She responded to questions from the committee.



03:48 PM -- Jonathan Harris, Build Our Homes Right, spoke in opposition to the bill. He provided a handout to the committee (Attachment B).



170227 AttachB.pdf



04:02 PM -- Judy Ann Kriss, representing herself, spoke in opposition to the bill.



04:06 PM -- Patrick Cail, Reconstruction Experts, spoke in opposition to the bill.



04:09 PM -- Ed Fronapfel, CAI, spoke in opposition to the bill. He responded to questions from the committee.



04:19 PM -- Edie Lilly, representing herself, spoke in opposition to the bill. She responded to questions from the committee.



04:21 PM -- Ed Shackelford, Colorado Senior Lobby, spoke in opposition to the bill. He provided two handouts to the committee (Attachments C and D).



170227 AttachC.pdf170227 AttachD.pdf



04:26 PM -- Adam Foster, Colorado Bar Association, spoke about concerns with Section 1 of the bill.



04:30 PM -- Erin Kelley, representing herself, spoke in support of the bill.



04:32 PM -- Peggy Rudden, representing herself, spoke in support of the bill.



04:34 PM -- Sarah Reynolds, Housing Colorado, spoke in support of the bill. She responded to questions from the committee.



04:40 PM



Senator Hill responded to questions from the committee.





04:41 PM -- Chris Jenkins, Norwood Development Group, spoke in support of the bill.



04:45 PM -- Christine Jensen, Colorado Mortgage Lenders Association, spoke in support of the bill.



04:49 PM -- Jon Roberts, Colorado Association of Realtors and South Metro Chamber of Commerce, spoke in support of the bill.



04:53 PM -- Nikolaus Remus, American Institute of Architects Colorado, spoke in support of the bill.



04:56 PM -- Rick Patten, representing himself, spoke in support of the bill.



05:01 PM -- Dave Davia, Colorado Association of Mechanical and Plumbing Contractors, spoke in support of the bill.



05:05 PM -- Dennis Polk, representing himself, spoke in support of the bill. He responded to questions from the committee.



05:13 PM



Senator Hill made closing comments on the merits of the bill. He provided amendment L.001 (Attachment E) to the committee.



170227 AttachE.pdf