CO SB157

HOA executive boards must notify unit owners and obtain majority approval before filing construction defect litigation against developers or builders, except when the HOA contracted for the work or damages are under $100,000.

Boards must provide detailed written disclosures to unit owners at least 180 days before filing suit, including information about alleged defects, potential cost increases, attorney fee arrangements, and risks such as property value decline and financing difficulties.

Unit owners have a 180-day voting period to approve or reject the proposed litigation; votes are obtained in writing and a quorum is not required, though certain votes are excluded (development parties, military personnel, banks, and uncontacted owners).

Developers and builders are prohibited from contacting unit owners during the voting period except to answer questions, and cannot threaten owners or offer incentives to vote no; violations result in deemed consent from affected owners and potential court sanctions.

Legislation becomes effective September 1, 2017, subject to voter approval if a referendum petition is filed within 90 days of final adjournment; applies only to construction defect actions with causes of action accruing after the effective date.