On May 9, 2025, Governor Jared Polis signed House Bill 25-1272, known as the “Colorado American Dream Act,” into law. The legislation, which takes effect January 1, 2026, aims to address the state’s well-documented shortage of for-sale multifamily housing, particularly condominiums and townhomes, by creating a voluntary program for developers and builders who agree to enhanced quality assurance measures and pre-litigation procedures. In exchange, participants were promised certain procedural and substantive protections in construction defect litigation.

Despite its well-intentioned goals, H.B. 25-1272 falls short of delivering meaningful legal protections to builders. While touted as a reform, the Act ultimately introduces more procedural burden and disclosure obligations than it does risk reduction. The law appears to offer insulation from meritless claims, but closer inspection reveals that its protections are largely illusory and, in some cases, may increase the risk and cost of litigation for participants.