Can I Sue My Contractor for Doing Unpermitted Work?

Far too often, Colorado homeowners experience this scenario: the contractor hired to add value to their home is now the reason they can’t sell it under Colorado law.  Too many Colorado contractors operate without getting proper permits, deliver substandard work, and make out like bandits at the expense of trusting homeowners. 

If you’re wondering how to sue a contractor for unpermitted work in Colorado, you’ve come to the right place. Our real estate litigation attorneys can work with you to determine what course of action will get you the best outcome for your situation.

In the context of Colorado regulations, unpermitted work generally refers to construction, installation, or alterations without getting the required permits or violating applicable codes. A building permit is a local government’s permission to construct or expand, renovate, or remodel an existing building. Permits ensure that construction projects follow all relevant regulations concerning building standards, including local building codes, land use, and environmental protection regulations.

Local Officials Could Halt the Work

Someone from the city ordinance office might be tipped off or drive by while construction is in progress, ask for permits, and shut the whole project down until permits are obtained. If the contractor was responsible for getting permits, this is a clear breach of contract, and you may be able to sue if no other resolution can be arranged.

The Work Fails Property Inspection at Resale

Sometimes, homeowners don’t know anything is wrong with their property until they put it on the market and it fails a home inspection. Code violations can lead to:

1. an indefinite stay in the house,

2. costly repairs to bring it up to code, or

3. selling the home at a considerable loss.

Note: Local authorities could condemn the property if the code violations are severe enough.

Homeowner Responsibility for Unpermitted Renovations in Denver and Colorado Springs

In Colorado, homeowner liability ultimately makes you responsible for your home and the outcome of the work completed on it. You can be sued if the result of unpermitted work injures someone or damages their property. Therefore, you should speak with a real estate attorney about your circumstances and legal options if you believe a contractor performed unpermitted work on your home.

You generally can sue a contractor for:

• breach of contract,

• causing foreseeable harm, 

• violating a safety regulation,

• civil theft,

• fraud, or

• poor workmanship.

Negligence Claims

During your lawsuit, you and your legal team may discover that the contractor wasn’t licensed or failed to get necessary permits. This information can strengthen your case by demonstrating that the contractor was careless. Permit rules exist to protect the public. If the contractor ignores them and causes damage, you may be able to file a negligence claim specifically based on those violations. 

Recovering Actual Damages 

Homeowners can seek compensation for actual damages, which generally include: 

• the reasonable cost to repair the defect, 

• the property’s fair market value without the defect, 

• or the cost to replace the property, whichever amount is less. 

In some cases, homeowners may also recover relocation expenses, loss of use, interest, and reasonable attorney fees, if allowed under Colorado law. C.R.S.§ 13-20-802.5

If the contractor's actions amount to a breach of contract, you may be entitled to damages that put you in the position you would have been in had the breach not occurred. That often means recovering the cost to fix defective work or finish incomplete work. 

However, the contractor might argue they substantially performed the contract—meaning any defects are minor. If a court agrees, your recovery could be limited to the cost of correcting those minor issues. (See Horton v. Bischof & Coffman Constr., LLC, 217 P.3d 1262, City of Westminster v. Centric-Jones Constructors, 100 P.3d 472.)

Negligence in Unpermitted Work Cases

When a claim involves negligence, damages may cover actual harm to your home or personal property, as well as loss of use caused by the contractor’s failure to meet building codes or industry standards. Negligence claims, however, are typically limited to cases where the contractor’s conduct caused real damages or created a risk to health or safety. (See A.C. Excavating v. Yacht Club II Homeowners Ass'n, 114 P.3d 862, C.R.S. § 13-20-804.)

Obtaining Three Times Your Actual Damages 

If your contractor’s actions amount to a violation of the Colorado Consumer Protection Act (CCPA), you may be eligible to recover up to three times your actual damages—also known as treble damages—as long as the violation can be proven and the award falls within the limits set by law. C.R.S. § 13-20-806.

If you had major work done on your home, you likely needed a permit. An industry rule of thumb is to obtain a permit any time the footprint of a space is altered in any way, including moving or changing:

• electrical wiring

• plumbing

• gas

• load-bearing walls

• the dimensions of the home or space

Major changes to a home's footprint can affect nearby homes and the utility systems those properties rely on. 

Generally, the party doing the work assumes responsibility for obtaining the permits, but they are not necessarily required to do so. This is usually the head contractor or an agent, or a subcontractor working under them.

While homeowners can obtain permits for their own properties, most leave that to the professionals. In fact, most contractors add the cost of obtaining permits to the overall project bill. Unfortunately, though, not all contractors pull permits.

What Does Your Contract Say About Permits?

Ideally, your contract states who should obtain permits. If it doesn’t, you’re in a bit of a gray area. However, you could make a case that the contractor did the work without a permit, as there is an implied professional obligation for the contractor to adhere to all building codes and permitting requirements.

Note: Unpermitted or unlicensed work can render contracts void and unenforceable, denying the contractor compensation for services provided. However, exceptions may apply if the unlicensed individual works under a licensed professional.

Building permits are issued at the local level, either by the city or the county where the work is to take place. The city usually has jurisdiction, except in unincorporated rural areas and much smaller towns, where the county issues permits.

For example, if you live in Denver, Boulder, or Castle Rock, the city will issue the appropriate building permits for the job. If you live in an unincorporated district in, say, Jefferson or Douglas County, then you’d go to your county’s building inspection office.

Note: Permit requirements vary from jurisdiction to jurisdiction, which can make obtaining the correct permit a bit tricky. However, most contractors are familiar with the permit requirements in the areas where they work.

If you’re unsure whether the work performed was conducted without a permit, the following steps can help: 

Review Building Permits: You can verify whether building permits were obtained for any construction, remodeling, or repair work on your property. Under Colorado law, it is unlawful to undertake such work without first obtaining a building permit from the relevant authority, such as a county building inspector. The plans for the work must conform to the applicable building code regulations, and the permit must be issued before the commencement of the work, C.R.S. 30-28-205.

Inspection Requirements: Certain types of work, such as electrical and plumbing installations, require inspections by state inspectors. For example, Electrical work in new construction, remodeling, or repair must be inspected by a state electrical inspector. The person performing the work must apply for a permit and pay the required fee before starting the work, C.R.S. 12-115-120.

Similarly, plumbing or gas piping installations in new construction or remodeling must be inspected by a state plumbing inspector. A permit must be obtained prior to the commencement of the work, C.R.S. 12-155-120.

You can check with the relevant state or local inspection authorities to confirm whether inspections were conducted for the work performed on their property.

Third-Party Inspections: Colorado law allows for third-party inspections during the construction process. These inspections are designed to ensure compliance with building codes and construction standards. The third-party inspector must be qualified and independent from the construction professional involved in the work. Homeowners can inquire whether such inspections were conducted and request documentation of the findings, C.R.S. 13-20-802.5.

Examine Notices and Documentation: When a building permit is issued, the issuing agency is required to send a written notice to the property owner. This notice includes information about the contractor and advises the owner of their rights and obligations under Colorado’s mechanics’ lien laws. Homeowners can review these notices to identify whether permits were issued and whether the contractor complied with legal requirements, C.R.S. 38-22-105.5.

Consult Local Authorities: Local governments, such as city or county building departments, are responsible for administering and enforcing building codes. Homeowners can contact these authorities to verify whether permits were issued and inspections were conducted for the work on their property. Local building departments may also maintain records of approved plans and specifications, C.R.S. 30-28-205, C.R.S. 24-32-3302.

By following these steps, you can identify whether construction or remodeling work was performed without the necessary permits or inspections, as required under Colorado law.

If your contractor failed to pull the necessary permits, you should consider taking the following steps:

Step 1 - Verify Permit Requirements: Determine whether the contractor was legally required to obtain permits for the work performed. Under Colorado law, contractors are generally required to obtain all necessary governmental licenses or permits to perform services as agreed with the consumer. Failure to do so may constitute a deceptive trade practice under  

 C.R.S. 6-1-105.

Step 2 - Contact Local Authorities: Notify the relevant local building department or authority about the contractor's failure to pull permits. Local jurisdictions often have specific requirements for building permits, and contractors are obligated to comply with these regulations. For example, C.R.S. 24-33.5-1206.1 requires contractors, such as fire suppression contractors, to obtain locally required permits and comply with local building codes C.R.S. 24-33.5-1206.1.

Step 3 - Document the Issue: Gather all relevant documentation, including the contract with the contractor, communications, and evidence of the work performed. This will be important if legal action becomes necessary.

Step 4 - File a Complaint: Consider filing a complaint with the Colorado Attorney General's Office or the local consumer protection agency. The failure to obtain required permits may be considered a violation of consumer protection laws under C.R.S. 6-1-105.

Step 5 - Withhold Payment: If the contractor has not been fully paid, the client may consider withholding payment until the issue is resolved. Under C.R.S. 38-26-107, funds may be withheld to ensure payment of claims or compliance with contractual obligations  C.R.S. 38-26-107.

Step 6 - Consult an Attorney: Seek legal advice to explore potential remedies, such as filing a lawsuit for breach of contract or pursuing claims under consumer protection statutes. An attorney can also assist in determining whether the contractor violated any licensing or permitting requirements under C.R.S. 30-11-125, which prohibits unlicensed contractors from engaging in business in certain areas  C.R.S. 30-11-125.

By taking these steps, you can address the contractor's failure to pull permits and protect your legal and financial interests.

You deserve to recover damages for unpermitted work in your home. From poor workmanship and unreasonable delays to unlicensed work and contractor breach of contract, our Colorado real estate litigation attorneys can help you recover damages from unpermitted construction. Call 303-688-0944 for your case assessment.