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April 10, 2024 SB 24-106
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Revised Fiscal Note
(replaces fiscal note dated February 14, 2024)
Drafting Number:
Prime Sponsors:
LLS 24-0290
Sen. Zenzinger; Coleman
Rep. Bird
Date:
Bill Status:
Fiscal Analyst:
April 10, 2024
Senate Second Reading
Brendan Fung | 303-866-4781
brendan.fung@coleg.gov
Bill Topic: RIGHT TO REMEDY CONSTRUCTION DEFECTS
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☐ State Transfer
☐ TABOR Refund
☐ Local Government
☐ Statutory Public Entity
The bill modifies the Construction Defect Action Reform Act and requirements for
HOAs to bring a construction defect action. It minimally increases state revenue and
expenditures starting in FY 2024-25.
Appropriation
Summary:
No appropriation is required.
Fiscal Note
Status:
This revised fiscal note is provided pursuant to Senate Rule 25(e) and reflects
amendments L.099 adopted during Senate Second Reading.
Summary of Legislation
The bill modifies requirements for claimants and homeowner associations (HOA) to initiate a
construction defect action under the Construction Defect Action Reform Act.
Claimants. Current law permits a claimant to bring a construction defect action if the failure
causes a risk of bodily injury or death, or a threat to the life, health or safety of the occupants of
the residential property. The bill modifies the cause to be a verifiable danger to the occupants.
Additionally, the bill adds that an action may be brought if the failure causes an actual failure or
lack of capacity to perform the intended function or purpose of the building component.
Homeowner associations. Current law allows a construction defect action to be initiated by a
majority vote of HOA unit owners. The bill increases a simple majority to 60 percent and
requires an HOA to obtain written consent from each unit owner voting to proceed that they
received certain disclosures and acknowledge that they must disclose known defects upon sale
of the property. Additionally, when an HOA partakes in construction defect litigation on behalf
of two or more unit owners, the bill stipulates that each claimant is subject to legal proceedings
and resolution. Page 2
April 10, 2024 SB 24-106
State Revenue
Starting in FY 2024-25, the bill may increase revenue to the Judicial Department from an
increase in civil case filings fees to the extent that claimants or HOAs bring action against
construction professionals. The fiscal note assumes that construction professionals will comply
with the law and any increase will be minimal. Revenue from filing fees is subject to TABOR.
State Expenditures
The bill increases workload in the Department of Regulatory Agencies (DORA) and the Judicial
Department beginning in FY 2024-25, as described below.
Department of Regulatory Agencies. The HOA Information and Resource Center in the DORA
serves as a resource for consumers to understand rights and responsibilities under current law.
The center also registers common interest communities like HOAs and other housing
cooperatives, and tracks complaints. Workload may increase for the center to respond to
questions from HOAs and residents. This workload is expected to be minimal and no change in
appropriations is required.
Judicial Department. Trial courts in the Judicial Department may experience an increase in
workload to the extent additional civil cases are filed under the bill. The fiscal note assumes that
construction professionals will comply with the law and any increase will be minimal.
Effective Date
The bill takes effect 90 days following adjournment of the General Assembly sine die, assuming
no referendum petition is filed, and applies to civil actions occurring and notices of claims
received on or after the bill’s effective date.
State and Local Government Contacts
Judicial Local Affairs Regulatory Agencies
The revenue and expenditure impacts in this fiscal note represent changes from current law under the bill for each
fiscal year. For additional information about fiscal notes, please visit the General Assembly website.