Colorado Homeowner Protection Act of 2010. Much ado about nothing or Trojan horse?

For those of you not glued to your computer screens watching the streaming coverage of the first day of the sixty-seventh Colorado General Assembly, Senator Morse introduced SB 10-045, “A bill for an act concerning increasing the rights of homeowners, and, in connection therewith, enacting the ‘Homeowner Protection Act of 2010.'”  The bill was assigned to the Senate State, Veterans, and Military Affairs Committee, chaired by Senator Heath.  The interesting thing about the HPA of 2010 is that it has nothing to do with construction defects, as we had expected.

The bill requires the holder of a residential mortgage to send written notice to a debtor 60 days prior to filing a foreclosure, increases the requirements for such notice, and requires that the holder “negotiate for a mutually acceptable agreement prior to commencing a foreclosure.”  It also requires a holder to participate in, and pay for, mediation before a court can issue an order authorizing sale under a residential mortgage loan.  The bill also provides for sanctions for any party who fails to appear for a mediation, fails to provide documents requested by the mediator, or fails to negotiate “in good faith.”

Even though the bill currently has nothing to do with construction defects, the bill’s title is so broad that I fear it may later be used as a Trojan horse and transformed into a construction defects bill.  As of this week, a certain plaintiffs’ attorney had disavowed any knowledge of a plan to introduce construction defects legislation this year.

Obviously, we will closely watch this bill to ensure that it remains much ado about nothing.  If so, and there is no construction defect legislation to fight this year, perhaps the building community can run its own legislation on the General Securty and Thermo-Development issues.  Stay tuned. 

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