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DENVER-The handwriting was on the wall early. With only about 4% of the precincts reporting, more than 300,000 people had voted and were shooting down Amendment 34, which would change the state constitution to make it easier to sue homebuilders for shoddy work by 76% to 24%. The trend continued throughout the night.

The Amendment was opposed by national and local homebuilders, commercial developers, economic development groups, NAIOP, BOMA, affordable housing groups and construction unions. The supporters mainly were principals from two local law firms that in the past had successfully sued builders for shoddy construction and defects.

Last year, legislators approved House Bill 1161, which made it more difficult to sue builders. It also removed treble damages, when a homeowner won a lawsuit. Builders supported the bill because they said the threat of treble damages was causing their general liability insurance to skyrocket. Insurance rates continued to rise this year, but builders contend that was because the threat of Amendment 34 passing.

Opponents of the amendment say that if it had passed, the construction industry would have come to a virtual halt, crippling the fragile economic recovery in the state. In addition, because it was such a vaguely written amendment, everyone who sells a home in the state–100,000 each year–would be faced with the threat of a lawsuit if they had made any home improvement. Supporters called those fears unfounded.

In addition, changing the state constitution often results in unintendedconsequences, says Evan Dreyer, spokesman for the group that opposed it. He notes that even as sales tax revenues increase in the state, legislators still must cut hundreds of millions of dollar from the budget because of the Tabor and Gallagher tax-limit measures approved by voters more than a decade ago.

“I can’t think of one good thing that would come of this,” CB Richard Ellis multifamily broker Steve Rahe told GlobeSt.com before the vote.

Opponents raised more than $3.5 million, while the proponents raised about $650,000, which included $150,000 or so to get the necessary votes on the ballot. Clay Vigoda, spokesman for the proponents, says that his foes simply out-spent them. But Dreyer says that once voters realized the flaws with the amendment, it failed on its own merits.

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