Jacob Barsen | The Rodman Law Group
Colorado’s Construction Defection Action Reform Act (“CDARA”) dictates the process by which disputes between property owners and construction professionals are resolved. The process is efficient and simple for all sides and has provided additional protections and options to claimant property owners while also expediting such disputes to prevent court backlogs and continued long term damage caused by alleged defects. This process must be properly followed before a construction defect claim can be filed in a Colorado court.
Before commencing the process there are some key procedural details and timelines to keep in mind: the statute of limitations for these claims is two years from when the defect was first discovered or should have been discovered. Additionally, upon completion of the project, a claimant has a six-year statue of repose to file a CDARA claim in order to capture and provide relief for defects which manifest much later. However, if a defect is discovered in the fifth or sixth year after completion, an action must be brought within two years of that discovery. After these timelines run, a claim can no longer be filed no matter the extent or severity of damage caused by an alleged defect. Generally, the recoverable damages in a CDARA action include the reasonable cost of repairs, whether completed by the respondent construction professional or a third-party contract hired by the claimant.
A claimant begins the process by sending a Notice of Claims (the “Notice”) to the respondent, which must include all claims against them and details of the defects that are alleged in such claims. In order to properly capture the entirety of the claims, it is essential to hire an inspector or contractor to identify and review the potential defects and resulting damage, in order to have a comprehensive list of defects in the Notice. Once the Notice is sent to the respondent party it starts the clock for the respondent’s response deadline. For residential properties this Notice must be sent 75 days before the claimant may file a lawsuit, and for commercial properties, the Notice must be sent 90 days before the claimant may commence an action. The responding party has 30 days to respond to the Notice and inspect the property. Upon completion of the inspection, the respondent must send a written response and offer to the claimant within 30 days for residential properties, or 45 days for commercial properties. Offers generally come in the form of monetary damages for the defects, an offer to repair said defects, or a combination of the two.
The claimant, upon receiving an offer, has 15 days to respond to accept or reject the offer in writing. Written acceptance should include a proposed schedule, scope of work, and if the respondent will repair the defects themselves, which the parties can then work together to adjust and revise as necessary. If the offer from respondent is rejected or the response deadline runs out, then the Notice of Claim process is considered complete and claimant may choose to move forward with other dispute resolution options such as mediation, arbitration, or litigation, depending on the dispute resolution provision in any contract signed with the relevant construction professional.
The respondent’s failure to submit a written response or claimants’ rejection of the response notes the end of the CDARA process and its requirements. The claimant would then be able to file a formal lawsuit or initiate arbitration against the respondent. Respondent’s failure could result in loss of certain liability protections and most notably opens the respondent up to potential treble damages under the Colorado Consumer Protection Act, capped at $250,000.1
When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 801.641.8304, or email experts@adviseandconsult.net.