1 week Ago By Jonathan Bach
The Oregon House on Tuesday advanced a bill to shorten homeowners’ window to sue condominium developers for construction defects. Lawmakers backing House Bill 3746 say limiting developers’ exposure to lawsuits would encourage them to build more condos that provide an affordable step into homeownership. Opposing legislators said it would shift the cost burden for construction problems from builders onto owners and their dues-funded homeowner associations.
All things equal, condos are generally less expensive than single-family homes. Oregon’s housing crunch is intensifying pressure on lawmakers to find ways to boost homebuilding of all types. Where a similar bill to reform Oregon’s condo defect liability laws died in committee in 2019 , this bill passed 46-10, with four excused votes, and now heads to the Senate.
Rep. Pam Marsh, D-Ashland, acknowledged it was difficult to say how much new construction the new bill would unlock. But if Oregon wants more condo construction, Marsh said, lawmakers must attempt to lower the barriers inhibiting that construction.
“This is good public policy that could shake loose the condo market for more owners,” Marsh said on the House floor. The bill would shrink the window that owners could bring construction defect lawsuits to seven years, plus an additional year if the defect is discovered in the final year. That would be down from the current 10-year timeframe.
It would also establish a series of mandatory inspections. The changes should grant developers access to more competitive insurance markets with more affordable premiums, said Rep. Vikki Breese Iverson, R-Prineville.
That should in turn incentivize developers to build more of the desperately needed condos. “Condominiums, like all other types of housing, are an important component to the housing spectrum,” Breese Iverson said, calling HB 3746 “a significant piece of the puzzle we can use to effectively address our state’s housing crisis.” Rep.
Lesly Muñoz, D-Gervais, was among those who expressed reservations about whether the bill would deliver for current or prospective owners, saying it would just hold builders less liable for work poorly done. “It shifts the financial burden onto homeowners,” Muñoz said. One backer, real estate broker Bjorn Beer, testified that he was working on a private-sector partnership to convert Portland apartments into condos — one that would be supercharged by HB 3746 and allow the group to sell the converted units for less than $200,000 each.
“We have brought back the extinct species called the ‘starter home,’” Beer said in written testimony. -- Jonathan Bach covers housing and real estate. Reach him by email at jbach@oregonian.
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