HOUSE BUYERS' SHIELD BACKED

RIGHTS COULDN'T BE WAIVED

By Karen E. Crummy
Denver Post Staff Writer

Homeowners would not be able to sign their rights away in contracts with builders under a measure lawmakers initially approved Wednesday.

House Bill 1338, dubbed the Homeowner Protection Act of 2007, would prohibit homebuilders from forcing buyers to sign contracts with certain provisions if they want the property.

Under the bill, the provisions in the contracts designed to protect builders from lawsuits would be voided if there is fraud or gross negligence. The homeowner also would not be able to waive
home-repair costs that are currently allowed by state law.

"I think very few homes are bad, but when they are and a homeowner can't get a remedy, it's devastating," said Rep. Jack Pommer, D-Boulder, who sponsored the bill. "Homebuyers may have invested their current and future income and sometimes need legal intervention to make
sure that their basic rights are available."

But opponents contended that homeowners and homebuilders should have the right to sign contracts with each other free of governmental interference.

"People should ... have some cognizance of what they're signing," said Rep. David Balmer, R-Centennial.

Ever closed on a house? There's quite a packet of papers to sign and even lawyers have a hard time reading and understanding it all, if real estate law isn't their specialty. Ordinary people would have to spend a lot of time, or hire a lawyer, to know what rights they're signing away and how it could come back to haunt them.

As a matter of fact, the CEO of a major homebuilder testified in committee that he didn't know what was in the standard contract this company uses. He said he only read it when a reporter asked him about this bill, and was both surprised and embarrassed and what he found.

During that same committee hearing, homeowners testified that they had put down earnest money before closing. When they balked at provisions in the sales contract, the homebuilders salesperson warned them they would lose their deposit if they refused to sign.

Opponents also predicted the bill would increase housing costs, making homes too expensive for many people.

Yes, the did. But they also said home prices would go up if the legislature didn't pass a bill called the Construction Defects Act back in 2003. That act took away many of the rights home buyers had if their new home started to fall apart. The legislature passed it. Home prices still went up and now homebuilders say they'll continue to to up unless they can get buyers to waive all of their legal rights.

Of course the homebuilders could worker harder to build houses property the first time, but that would probably causes prices to go up too.

The bill passed second reading and faces a third reading in the House before moving to the the Senate. If it becomes law, it will apply to lawsuits filed on or after the date of the bill's passage.

But lobbyists, especially those for the Colorado Association of Home Builders and the Denver Metro Chamber of Commerce, have been out in force opposing the bill.

Four years ago, homebuilders said their insurance rates had skyrocketed because of the number of lawsuits being filed against them.

They persuaded the legislature to pass a bill that, among other things, instituted hard caps on the amount of damages that could be awarded in lawsuits against them.

Pommer's bill doesn't increase those caps or institute a new legal remedy, he said.

No, it just holds homebuilders to the promises they made back in 2003.

Staff writer Karen Crummy can be reached at 303-954-1594 or kcrummy@denverpost.com.

House OKs Stronger Protections For Home Buyers

by Steven K. Paulson, AP Writer

DENVER - After lawmakers accused some homebuilders of forcing buyers to waive their warranty rights, the House gave initial approval Wednesday to a bill that requires the warranties to be upheld.

Actually we accused the homebuilders, and the homebuilders admitted, that their contracts force buyers to give up a lot of rights -- including the right to expect a new home to be "habitable."

The Homeowner Protection Act of 2007 would allow courts to void any part of a contract that waives basic legal rights.

Rep. Debbie Stafford, a Republican from Aurora, said some homebuilders were taking advantage of a 2003 law that eased restrictions on them, wiggling out of warranties even when negligence was involved.

Actually the homebuilders offer warranties to most new home buyers. The problem is that they get homeowners to waive their legal rights in return for the warranties. Then the warranties don't cover a lot of the serious defects that can cause a new house to start falling apart just a few years after its built.

At that point a lot of homeowners are in a real jam. If they can't afford to pay for repairs they just have to live with the problems, which can include cracking walls, rain and snow in the attic, and basements floors that ripple like a stormy sea

She said lawmakers thought they were doing the right thing when they passed the law, but some homebuyers have been left with costly repairs.

"The American dream for many of the people who voted to send us down here are caught in the American nightmare," Stafford said.

Other Republicans said the measure (House Bill 1338) will drive up the cost of new homes and hurt the industry at a time when it is in a slump.

"This is kicking an industry while it's down," said Rep. David Balmer, R-Centennial.

Good grief, the homeowners I've heard from have lost nearly everything and they're stuck living in a crumbling home. Larry Mizel, the head of Richmond American Homes made $42 million last year. So did his partner. I think they can afford to build homes property, or fix their mistakes.

The bill faces a third reading in the House before it goes to the Senate.

Rep. Al White, R-Winter Park, said the bill would create a windfall for home buyers who could prove a builder was negligent.

This argument drives me craze. For five years now I've been listening to some Republican claim that anything we do to protect consumers is just a way of making a few lucky consumers rich. They say that Coloradans don't want to work for a living, they just hope to get maimed in a car wreck, suffer an injury during surgery or buy a defective home so they can sue someone and get right.

Have you ever hoped your new home would fall apart so you could sue? Have you ever wanted a doctor to give you the wrong treatment so you could claim malpractice? Most people I know have never sued anyone. And hope they never have to.

Colorado has very few lawsuits and very small damage awards. When people sue it's usually because they've tried everything else and don't see any other way to resolve a horrible situation.

Bill sponsor Rep. Jack Pommer, D-Boulder, said the measure puts limits on damages. He said some homebuilders have acknowledged that some of their contracts are "unconscionable" and he said they need to be reined in.

The bill doesn't put any limits on damages, it just keeps in tact the limits that the homebuilders got when they passed the Construction Defects Act back in 2003.

Lawmakers apt to raise roof over lousy-homes bill

By Lynn Bartels, Rocky Mountain News

March 28, 2007

A controversial construction-defects bill that created political drama at the Capitol in recent weeks is scheduled for debate today on the House floor.

"This is going to be one heck of a fight," predicted Rep. Alice Borodkin, D-Denver.

The intrigue involves automated phone calls to senior citizens that infuriated Democratic lawmakers, including Borodkin, and a Republican lawmaker at odds with her own caucus and the home-building industry.

Rep. Debbie Stafford, R-Aurora, said she was told by a fellow House Republican that she would be targeted by a home-builders association in future elections if she supported the bill.

On Tuesday, House Minority Leader Mike May, R-Parker, said Stafford has an ax to grind because home builders worked to kill an unrelated bill of hers this session.

He said her version of events "never happened."

I think it happened. I wasn't there when Debbie was threatened, but it wouldn't be he first time. When the Republicans ran the legislature they routinely threatened their own caucus with reprisals if they didn't vote the party line.

In fact, they would bring our floor work to a halt and we'd sit and watch while the Majority Leader walked up and down the aisles bullying his fellow Republicans into voting the way he wanted.

One common threat was a primary. If the recalcitrant Republican was in a safe seat (meaning there wasn't much chance of him or her losing in a general election), the leadership would threaten to find an opponent for the primary, an opponent who would have the support of the Republican Party and Governor Owens.

They carried through the treat once in a while to make sure people understood it was serious.

Rep. Mike May, the current Republican leader in the House, isn't like that. I don't think he threatens his caucus. But there are others who would and, Debbie Stafford insists, did.

"I stick by my story," Stafford shot back. "I think it's time we stick by the people of Colorado, and they are being stuck with shoddily built homes and no recourse."

At issue is a measure designed to protect homeowners from having to waive their legal rights, at the time of buying their homes, to compel their home builder to fix construction defects.

Opponents argue that House Bill 1338 does much more than that, opening the door to lawyers collecting huge judgments for their clients.

"I don't get that," said Sen. Jennifer Veiga, D-Denver, the Senate sponsor of the measure. "That's not in there."

The controversy over House Bill 1338, also sponsored by Rep. Jack Pommer, D-Boulder, began before the bill was even introduced March 7.

Several Democrats said senior citizens in their districts received "Robo calls," claiming their lawmaker supported a home-builders bill that would raise taxes and enrich trial lawyers.

The senior citizens, in turn, called the lawmakers to complain.

"We had no idea what they were talking about," Rep. Nancy Todd, D-Aurora, recalled. "There was no home-builders bill at the time. And the one that was later introduced doesn't raise taxes. It was a scare tactic."

Borodkin was so furious she contacted the Colorado Association of Homebuilders and Colorado Concerns, a consortium of influential business leaders statewide.

"I said, 'If these calls don't stop by noon tomorrow I'm going to ask the attorney general to sue because they are filled with falsehoods.' The calls stopped," Borodkin said.

The calls were paid for by Rick Sapkin, with Edgemark Development. He is chairman of Colorado Concerns.

Sapkin could not be reached for comment, but William Mutch, director of Colorado Concerns, said Sapkin was acting as an individual and not as the group chairman.

Sure he was. As an ordinary, individual Coloradan he decided to spend thousands of dollars on robo-calls all across Colorado claiming that a bill to protect a few legal rights for new home buyers is actually a sneaky attempt to increase taxes. Heck, we've all done that.

Actually, his explanation was even better. He claims that he was testing some new robo-call technology and it went awry, accidentally calling people from Arvada to Grand Junction lying about why were running the bill. Give the robot a laser weapon instead of a telephone and you'd have the makings of a great science fiction flick.

Joking aside, this is the homebuilders' modus operandi. They have dozens of lawyers and lobbyists working for them, but no one is ever actually speaking or acting for the homebuilders themselves. You can negotiate for hours with their lawyers, then the lawyers will say they're not actually getting paid for the meeting and you can't hold the homebuilders they usually work for to anything they said.

You can negotiate an issue with a lobbyist, then find out it's not something the "homebuilders" actually care about.

One other thing. It's odd to talk about Colorado Concern and the other groups as if they're somehow separate from the homebuilders. They''re supported with the homebuilders' money and they follow the homebuilders' orders.

I've tried to talk with some of these other groups and their response is always the same: we take our direction from the Homebuilders Association.

The home builders, Colorado Concerns and the Denver Metro Chamber of Commerce are leading the charge against HB 1338.

Mutch said opponents agree that some home builders are inserting waivers-of-legal-rights clauses in contracts that are over and above what lawmakers intended in 2003 when they passed the original construction-defects bill. Those clauses give homeowners little recourse if their homes are defective.

Some? We haven't found a contract from a major production homebuilder without those clauses.

The 2003 bill put an end to home-owners collecting punitive damages, triple damages and attorneys fee. But homeowners were allowed "a right of remedy," if the builder didn't make repairs, Veiga said.

The clauses, she said, are stripping away that right.

Bill Aims To Protect Home Buyers

Homeowner Protection Act Would Help When Defects Arise In Homes

By Dayle Cedars, 7NEWS Reporter

DENVER -- Thousands of Coloradans are finding themselves without recourse against homebuilders when defects arise in their homes.

State lawmakers said that is because of a clause most builders insert into their purchase contracts. That is something two legislators hope to change.

Rep. Jack Pommer of Boulder and Sen. Jennifer Veiga of Denver are sponsoring the Homeowner Protection Act.

The bill would protect homeowners from being required to waive the rights provided under the Construction Defect Action Reform Act as a condition of buyng a new home.

When most homeowners purchase a newly built home, they sign a contract that gives them a limited warranty, but according to lawmakers, it also waives their right to take the builder to court and seek damages if the company doesn't repair the problem.