Grand Junction Sentinel Editorial

4/1/2007

      The Colorado House of Representatives last week passed House Bill 1338, officially called the Homeowner Protection Act of 2007. But there are significant problems with the legislation that make it more a guarantee of work for lawyers than protection for homeowners.

      HB 1338 would ban clauses in contracts for new homes that may force homebuyers to waive rights granted to them under a law adopted by the Legislature in 2003. That in itself is not so bad, but HB 1338 seeks to make the provision retroactive, so that home contracts signed several years ago could be overturned. That seems to be a clear violation of the Colorado Constitution’s ban on new laws that impair existing contracts.

      Furthermore, the bill could make expressed warranties by homebuilders — saying, for instance, the home is warrantied against specific defects such as the foundation settling beyond a certain amount — more difficult to utilize. It would allow, “implied” warranties, meaning unspecified defects or minor problems could be the basis of a lawsuit, even years later.

      Try getting such a broad warranty on your new car, or virtually any manufactured product.

      Although it is being carried by two Front Range Democrats, HB 1338 was developed by Scott Sullan, a trial attorney who has specialized in representing homeowners, and who pushed 2004’s unsuccessful Amendment 34, which would have vastly expanded the rights of new home buyers in legal battles with builders.

      This legislation needs to be substantially amended or killed when it reaches the Senate. Otherwise, the net effect will be to drive up the cost of new homes as builders are forced to obtain insurance coverage to protect them against lawsuits over almost anything.