Construction Litigation, Real Estate

In Colorado, a construction defect lawsuit must be filed within a two-year statute of limitations from the moment the defect is discovered or should have been reasonably identified. Regardless of discovery, the statute of repose creates an absolute deadline of six years from the substantial completion of the improvement to the property. This deadline can be extended to eight years if the defect appears in the fifth or sixth year of the original window. These timelines can be paused, or "tolled," by initiating a formal Notice of Claim process or pursuing certain warranty claims. Finally, specific exceptions exist for third-party indemnity claims, which must be brought within 90 days of a settlement or final judgment.

Under Colorado's Construction Defect Action Reform Act (CDARA), you generally must complete the statutory notice-of-claim process before filing suit against a construction professional: the claimant must send a written notice of claim at least 75 days before filing (90 days for commercial property), and a suit filed without compliance is stayed (postponed) until compliance occurs. C.R.S. 13-20-803.5 Once the builder receives the notice, they may inspect the property and, after the inspection, may make a timely written offer to settle or remedy the claimed defect. If the builder doesn't make an offer, the property owner rejects the offer, or the builder fails to comply with an accepted offer, the claimant may then file an action. Melssen v. Auto-Owners Ins. Co., 2012 COA 102, Smith v. Exec. Custom Homes, Inc., 230 P.3d 1186. The homeowner is not required to accept an offer to remedy. C.R.S. 13-20-803.5

Colorado has legal protections for a property owner whose contractor charges significantly more than the initial estimate. Generally, contractors must notify a homeowner of cost increases if the contract specifies this obligation. The Colorado Consumer Protection Act (CCPA) prohibits a contractor from making false representations about the price of services or from failing to explain why additional or more expensive materials are needed. Homeowners who've been wrongfully overcharged may be able to seek damages for breach of contract, assert consumer protection claims, or seek restitution.