March 27, 2009
SB 246, Concerning the Award of Moratory Interest to Claimants in Residential Construction Defect Actions, and, in Connection therewith, Enacting the “Homeowner Protection Act of 2009,” was introduced March 13 and assigned to the Senate State, Veterans and Military Affairs Committee.
The bill would allow a plaintiff-homeowner to recover moratory interest (interest paid as damages for delay in performing an obligation) in residential construction defect cases from the time of the creation of the construction defect through the end of the statutory notice of claim process. The bill also establishes the statutory rate of the moratory interest (6 percent per year, compounded annually, from the later of either the date the construction defect was installed or the date the buyer closed on the property through the date of the mailing of the claimant’s first notice of the claim; and thereafter at a rate of 8 percent per year, compounded annually).
NAMIC has joined members of the business community, construction industry, real estate development community, Colorado Civil Justice League, and the Denver Metro Chamber of Commerce in opposing this bill as being legislation fraught with serious adverse unintended consequences for homebuyers, insurance consumers, the real estate market, and the small-business community.
Although NAMIC appreciates the importance of providing homeowners with meaningful protections against shoddy construction work and providing them with legal remedies that will adequately compensate them for their legitimate damages, NAMIC believes that SB 246 is rife with public policy problems that make the bill unsound and harmful to the state of Colorado.
Specifically, NAMIC has the following concerns with the bill:
NAMIC requests that its member companies writing commercial liability coverage policies in Colorado, contact members of the Senate State, Veterans and Military Affairs Committee to express their concerns with this bill and to ask them to VOTE "NO" on SB 246.
Senate State, Veterans and Military Affairs Committee Members: