Dive Brief:

• Colorado condominium builders lost their bid to overturn the state’s construction defects law in the state Legislature last month, but they have scored a win with the Colorado Court of Appeals.

• The day after the Legislature adjourned for the season, the court ruled that a homeowner’s association was in the wrong when it changed its bylaws to allow itself to sue the builder instead of arbitrating the dispute out of court.

• The judges said the association—which removed arbitration as the resolution method for construction-defects disputes after two-thirds of the building’s unit owners voted to do so—needed the consent of the builder to make the change.

Dive Insight:

Colorado condo developers may be able to turn to the courts for future builder-friendly rulings now that the precedent has been set. And despite the Legislature’s decisive objection to repealing the defects law, local governments around the state have been adopting ordinances to require condo associations to mediate their disputes directly with their builders before being allowed to sue.

The reason: Developers reportedly are reluctant to build in the state because frequent construction-defects lawsuits have driven their insurance premiums up.