Colorado Association of REALTORS: Legislative Update

HB-1279 “Construction Defect Actions Notice Vote Approval” CAR Position – Support. The Legislative Policy Committee changed its position to support after significant amendments were made to the bill. This bi-partisan bill requires all homeowners and the developer to be notified that a construction defects lawsuit is being considered. In addition, it requires that a majority of the homeowners to approve a decision to pursue a lawsuit.

This bill is poised to be the first significant construction defects bill to pass the legislature in four years. While it does not address all the issues related to the problem, it is a start. One of the sponsors, Rep. Lori Saine (Dacono), met with a group including REALTOR® representatives last summer, and has made good on her promise to put forth a bill dealing with the issue.

Senate Concurrent Resolution 17-002 “Real Estate Transfer Tax For Affordable Housing” CAR Position – Oppose. SCR 17-002, is sponsored by Senator Kefalas (Ft. Collins) SCR 02 deletes the prohibition in TABOR on new or increased transfer tax rates on real property. The concurrent resolution imposes a tax upon the recording of each real property deed at the rate of 1/10 of one percent of the value of the real property as specified in the deed for the privilege of transferring the title to real property (tax).
SCR 02 has several flaws. First, the transfer tax hurts the very families that it is intended to help because such a tax is regressive. It disproportionately impacts low-to-moderate income earners – those that can least afford it, which creates a barrier to homeownership. Down payment costs – including closing costs – remain a significant barrier to homeownership, especially for low-to moderate-income households.
Second, real estate transfer taxes are not a reliable funding source. Real estate transfer taxes are extremely sensitive to market forces, making the frequency of transactions and value of property variable in relation to the strength of the economy, which makes real estate transfer taxes a poor revenue source to fund any government programs, let alone affordable housing.

HB-1309 “Documentary Fee to Fund Affordable Housing” CAR Position – Oppose. CAR lobbyist Jason Hopfer spoke against the bill in its first hearing in the Local Government Committee on April 26 and was the only witness to oppose it. He reiterated CAR’s concerns with a doc fee increase (see above). He also said the bill is unconstitutional because it increases a fee that is unrelated to a service and is thus a tax. Committee Chair Steve Lebsock (Adams County) encouraged CAR to reconsider its position and work with the sponsors on the bill. Committee Republicans voted no while Democrats voted yes, so the bill passed 7-6. Now it goes to the full House for 2nd reading.

HB-1358 “Concerning Transparency in the Fees to be Paid to the Parties Agents in a Real Estate Transaction” CAR Position – Oppose. The bill requires that, in any sale or lease of real estate, the amounts payable to anyone acting as a broker in the transaction (e.g., buyer’s agent, seller’s agent, transaction-broker) be disclosed in writing, either as part of the contract or otherwise, and accounted for. If the amount payable is allocated between the parties, the portion for which each party is responsible must be separately stated. Brokers are required to disclose their fees or the basis for calculating their fees on all marketing materials relating to any specific property, including on-line multiple listing services.

CAR’s LPC has taken positions on a number of significant bills in the last few weeks. There’s not enough room to go into details on all of them, so here’s a short list of the bills and positions:
SB-215 “Sunset Licensed Real Estate Brokers & Subdivision Developers” – Support. This bill made its way through both chambers and should be on its way to the Governor soon.
HB-1310 “Residential Landlord Application Screening Fee” – Oppose.
HB-1311 “Seller’s Disclosure Estimated Future Property Tax”– Neutral. Working for language changes. Builders try to give a rough estimate of taxes.
HB-1312 “Residential Lease Copy and Rent Receipt” – Oppose.
SB- SB-282 “Dedicate Reservoir Release Environmental Purposes” – Neutral. This bill, sponsored by Rep. Hugh McKean (Loveland) needs changes to make the bill palatable.

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