December 22, 2025
In the early 2000s, condominium development in Omaha was booming. I represented one developer that converted a former downtown apartment building into 50 condominium units that were all sold one year. But that boom came to a screeching halt with the Great Recession, and condo development never bounced back.
Why was that?
This limited condominium development since the Great Recession had little to do with the economy. It was caused by the influx of construction defect litigation. This was simply litigation commenced by condominium owners and condominium associations, often with minor construction defect complaints, where the attorneys’ fees and other legal costs were excessive. These were much like class-action lawsuits. Instead of facing one lawsuit brought by one owner of one house, a developer was faced with lawsuits brought by 50 or so condominium owners. As a result, developers became wary about spending money on quality projects.
But changes to the Nebraska condominium law made in 2020 fixed this problem. Here’s what the new law does for real estate developers and why we may see condo development become more popular in the coming years:
Statute of Limitations.
The first change is to the statute of limitations for claims made by condominium owners against the condominium developer. Before, there was a 4-year statute of limitations. That’s been reduced to 2 years. And the “tolling” period was amended so that any lawsuit must in all events be commenced within 1 year from the date of discovery of the alleged defect. This tolling period was previously 2 years.
And don’t forget, when selling a condo unit, the developer and buyer can agree to reduce the statute of limitations to 1 year. Previously, the parties could only agree to reduce this period to 2 years.
More importantly, the “statute of repose” has been reduced from 10 years to 5 years. The statute of repose describes the final date a lawsuit can be brought, regardless of when the alleged defect is discovered. As a result, no lawsuit of any kind may be brought 5 years after construction is complete.
Pre-litigation notice and cure period.
Before commencing litigation against a developer, the condominium owner must provide written notice of the claim to the developer, and the developer has 3 months to cure the alleged defect. If the defect can’t be cured within 3 months, the cure period will be extended as long as the developer is diligently proceeding with repairs. Any litigation commenced without strict compliance with these requirements will be dismissed. A developer can now cure a legitimate construction defect without the expense of litigation.
Limit on a condominium association’s ability to commence litigation against a Developer.
Changes to the law restrict the ability of the condominium association to file suit a developer for construction defects. The statute has been revised to say that the Condominium Declaration may not provide the condominium association with the power to file suit. This litigation may only be filed by the unit owners themselves. This avoids the situation where you have 1 strong-willed owner that can make the whole condominium association file suit. No longer is the developer faced with these class action type of lawsuits brought by all of the owners.
Limit on Developer liability for litigation expense.
Under the old law, the condominium developer was liable to the condominium association for litigation expenses, including reasonable attorney’s fees. We all understand there’s no such thing as “reasonable attorney’s fees”. This liability has been removed by the new law.
So what comes next?
As a result of these changes, we’ve arrived at what I think is a renaissance of condominium development in Omaha. The law has changed to make condominium development more profitable and less risky. The housing shortage in Omaha, especially starter homes, cries out for new condominiums. There’s an untapped market for condominiums in Omaha that shouldn’t be ignored.
Omaha Is An Untapped Market for Condominium Development
Condominium development in Omaha really should be booming right now. Lots of new apartments are being built in downtown Omaha and there’s a real need for additional housing all over the metro. Additionally, recent amendments to the Nebraska condominium law, which are very beneficial to condominium developers, are going to help create this additional housing.In the early 2000s, condominium development in Omaha was booming. I represented one developer that converted a former downtown apartment building into 50 condominium units that were all sold one year. But that boom came to a screeching halt with the Great Recession, and condo development never bounced back.
Why was that?
This limited condominium development since the Great Recession had little to do with the economy. It was caused by the influx of construction defect litigation. This was simply litigation commenced by condominium owners and condominium associations, often with minor construction defect complaints, where the attorneys’ fees and other legal costs were excessive. These were much like class-action lawsuits. Instead of facing one lawsuit brought by one owner of one house, a developer was faced with lawsuits brought by 50 or so condominium owners. As a result, developers became wary about spending money on quality projects.
But changes to the Nebraska condominium law made in 2020 fixed this problem. Here’s what the new law does for real estate developers and why we may see condo development become more popular in the coming years:
Statute of Limitations.
The first change is to the statute of limitations for claims made by condominium owners against the condominium developer. Before, there was a 4-year statute of limitations. That’s been reduced to 2 years. And the “tolling” period was amended so that any lawsuit must in all events be commenced within 1 year from the date of discovery of the alleged defect. This tolling period was previously 2 years.
And don’t forget, when selling a condo unit, the developer and buyer can agree to reduce the statute of limitations to 1 year. Previously, the parties could only agree to reduce this period to 2 years.
More importantly, the “statute of repose” has been reduced from 10 years to 5 years. The statute of repose describes the final date a lawsuit can be brought, regardless of when the alleged defect is discovered. As a result, no lawsuit of any kind may be brought 5 years after construction is complete.
Pre-litigation notice and cure period.
Before commencing litigation against a developer, the condominium owner must provide written notice of the claim to the developer, and the developer has 3 months to cure the alleged defect. If the defect can’t be cured within 3 months, the cure period will be extended as long as the developer is diligently proceeding with repairs. Any litigation commenced without strict compliance with these requirements will be dismissed. A developer can now cure a legitimate construction defect without the expense of litigation.
Limit on a condominium association’s ability to commence litigation against a Developer.
Changes to the law restrict the ability of the condominium association to file suit a developer for construction defects. The statute has been revised to say that the Condominium Declaration may not provide the condominium association with the power to file suit. This litigation may only be filed by the unit owners themselves. This avoids the situation where you have 1 strong-willed owner that can make the whole condominium association file suit. No longer is the developer faced with these class action type of lawsuits brought by all of the owners.
Limit on Developer liability for litigation expense.
Under the old law, the condominium developer was liable to the condominium association for litigation expenses, including reasonable attorney’s fees. We all understand there’s no such thing as “reasonable attorney’s fees”. This liability has been removed by the new law.
So what comes next?
As a result of these changes, we’ve arrived at what I think is a renaissance of condominium development in Omaha. The law has changed to make condominium development more profitable and less risky. The housing shortage in Omaha, especially starter homes, cries out for new condominiums. There’s an untapped market for condominiums in Omaha that shouldn’t be ignored.
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