Colorado voters will decide who wins an escalating power struggle between disgruntled homebuyers, their lawyers and developers on Nov. 2.
If approved, Amendment 34 would repeal a developer-backed law passed last year by the state Legislature. That law, HB 1161, changed the process by which homeowners could bring lawsuits against developers, homebuilders and real estate firms for shoddy construction and placed limits on damages juries could award.
The amendment would also cancel limits on a homeowners right "to recover damages caused by a failure to construct an improvement in a good and workmanlike manner." Not surprisingly, trial lawyers support the measure, and the housing industry vehemently opposes it.
Proponents say HB 1161 trampled on homeowners' rights to full recovery of losses from shoddy construction. "We have gotten rid of any reason for these people to do their work correctly," said Clay Vigoda, spokesman for Protect Our Public and Private Property Rights. He says the new law puts homeowners at a significant disadvantage when construction defects are uncovered. The law "has created such an impossible situation that you may as well take what [developers] give you and go away."
But opponents say the trial lawyers are motivated by greed. "[Trial lawyers] were angry we took away their honey pot," said Evan Dreyer, spokesman for Coloradans for Responsible Reform, which formed in opposition to the amendment. "They were raking in money hand over fist." Dreyer said that HB 1161 has drastically reduced the number of shoddy workmanship lawsuits from 140 filed in 2002 to only 22 in the first eight months of 2004.
Opponents claim the amendment would increase the frequency and size of lawsuits and thus reduce the availability and affordability of housing. The National Association of Homebuilders, real estate firms and the U.S. Chamber of Commerce have combined to shovel more than $2 million into the campaign to defeat it.
They also say the amendment may open a loophole for homeowners to sue previous homeowners for past home improvements. Backers dispute this, maintaining that the amendment should have no effect on insurance premiums and will uphold current law that does not hold previous homeowners liable for unknown defects.