Real Estate Groups Mount Opposition to Amendment 34

The amendment is in reaction to House Bill 1161, which legislators adopted last year and made it more difficult to sue builders for construction defects. Scott Sullan, a local lawyer who is one of the main sponsors of Amendment 34, points to the disadvantages to commercial tenants as one of the main reasons the change to the Constitution is needed. He tells GlobeSt.com he is tired of tenants not being able to collect for lost revenue, if, for say, the roof of a store collapses under the weight of a heavy snow because of shoddy workmanship. The retailers, he says, will never be able to collect loss of revenue from the contractor, who will only need to repair the roof.

However, NAIOP, BOMA and all of the local chambers of commerce thatrepresent small businesses and economic development agencies oppose the amendment, as well as the local chapter of the National Association of Home Builders. Opponents say the 100,000 people who sell their home each year will be liable for the next eight years to unlimited damage for anything relating to construction or home repairs. Sullan says that is nothing but a scare tactic.

Sullan notes he is not trying to bring back treble damages for construction defects that were allowed before HB 1161. But opponents say if nothing else, it is dangerous to change the Constitution for a narrow type of law. There likely will be all sorts of unintended consequences from changing the Constitution, they argue. Opponents of Amendment 34 say that if there are problems with HB 1161, theyshould be addressed in the legislature. But Sullan says homebuildersand others in the real estate world can raise so much money and mount such strong lobbying efforts, that going to the legislature is futile.

A poll taken by the Rocky Mountain News shows Amendment 34 isleading by a slight margin. However, that bodes poorly for the Amendment, as the lead is not more than the margin of error. Also, more educated people tend to oppose it, and, typically, is a leading indicator of the direction a complicated ballot issues takes. And the opponents have not yet begun their multi-million-dollar advertising campaign. Sullan and one other lawyer--both of whose firms have made millions of dollars suing homebuilders--are mostly funding the initiative themselves and will raise a fraction of the amount.