Construction Defects Law Amendment - Effects on CO Rental Market

[Tyler Howell]

http://www.constructiondive.com/news/co-constructi...

• A new construction defects law that could revive condominium development has passed the Colorado House unanimously and is expected to gain Senate approval as well, according to CBS Denver.
• The new legislation would reverse new-development obstacles contained in the existing law, such as a homeowners association's (HOA) ability to sue condominium developers without first obtaining homeowner approval.
• Developers say the current law has led to "frivolous" lawsuits that have all but halted condominium development in the state. Since 2005, condominiums' share of the new housing market has dropped from 20% to 2%.

With a shift from rental apartment development to condos, downward pressure on rental prices in Denver could be lessened with a slowdown in the increase of new supply. Additionally, recent Freddie Mac research shows that less renters in the West are actively looking to purchase a home, and more intend to keep renting for the foreseeable future, than in any other US region.

This supports our stance that the greater Denver area continues to be a strong market for rental property investment.

Your thoughts on the new bill and effects on CO's market?