{"id":2497,"date":"2014-01-02T06:44:10","date_gmt":"2014-01-02T13:44:10","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=2497"},"modified":"2013-12-30T16:44:36","modified_gmt":"2013-12-30T23:44:36","slug":"short-summary-colorado-construction-defect-action-reform-act","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/short-summary-colorado-construction-defect-action-reform-act\/","title":{"rendered":"A Short Summary of the Colorado Construction Defect Action Reform Act"},"content":{"rendered":"

Anne K. McMichael, Esq.<\/p>\n

For 12 years, the Construction Defect Action Reform Act (C.R.S. \u00a7 13-20-801, et. Seq.) or \u201cCDARA\u201d, has governed how construction defect litigation and arbitration actions are conducted in Colorado.\u00a0 While portions of this act are reasonably straightforward, several of the sections are subject to ongoing debate as to how these concepts should be applied to achieve fair and unbiased results.\u00a0 The purpose of this article is to provide a summary of how CDARA is applied to construction defect claims.<\/p>\n

What is the Construction Defect Action Reform Act?<\/p>\n

In 2001, after significant lobbying by Colorado\u2019s insurance and construction industry, the Colorado General Assembly passed CDARA in an attempt to regulate all claims and litigation in which a party is claiming construction defects.\u00a0 Amended in 2003, CDARA was created with the intention of curbing frivolous lawsuits involving the construction industry and limiting the liability of all construction professionals.<\/p>\n

Colorado\u2019s CDARA governs all actions (including arbitration) brought against a \u201cconstruction professional\u201d that asserts a claim \u201ccaused by a defect in the design or construction of an improvement to real property.\u201d\u00a0 A \u201cconstruction professional\u201d is defined as \u201can architect, contractor, subcontractor, developer, builder, builder vendor, engineer, or inspector performing or furnishing the design, supervision, inspection, construction, or observation of the construction of any improvement to real property\u201d.\u00a0 As evidenced by this definition, CDARA is applicable to almost everyone involved in the construction process.<\/p>\n

The Notice of Claim Process<\/p>\n

In accordance with CDARA, any party claiming construction or design defects must provide a pre-litigation Notice of Claim Process (\u201cNOC\u201d). The purpose of the NOC is to provide the construction professional with a notice, 75 days prior to filing litigation (or 90 days prior in the case of commercial property), describing the construction and\/or design defects.\u00a0 30 days after receiving the NOC, the construction professional must be allowed to physically inspect the claimed defects.\u00a0 After the conclusion of the 30-day inspection period, the construction professional is provided an additional 30 day (or 45 days in the case of commercial property) to tender an offer to settle the claim through corrective work or payment.\u00a0 This optional offer must be accepted by the party claiming the construction and\/or design defects within 15 days.\u00a0 If settlement is not achieved, the claiming party may initiate litigation against the construction professional.<\/p>\n

Should a party claiming construction and\/or design defects fail to comply with CDARA\u2019s NOC process, the case will be stayed until this process is completed.\u00a0 If a construction professional fails to: (1) provide an offer, (2) fulfill any settlement agreement, or (3) the claiming party rejects a settlement offer that is below the cost to correct the alleged defects, CDARA denies the construction professional from several of the liability protections afforded under the law.<\/p>\n

The purpose of the NOC process is to provide an opportunity to settle or mediate a construction defect claim in a prompt and cost-effective manner, avoiding litigation.\u00a0 The NOC process also allows the investigation and evaluation of the alleged defects (usually through the involvement of an expert).\u00a0 This investigation provides all parties involved with a better understanding of the alleged defects in order to determine a reasonable settlement.<\/p>\n

Limiting Damages Related to Construction Defects<\/p>\n

Under CDARA, a party claiming damages related to construction and\/or design defects may not recover more than \u201cactual damages\u201d unless there is a violation of the Colorado Consumer Protection Act.\u00a0 \u201cActual damages\u201d is defined as \u201cthe lesser of the: (1) fair market value of the real property without the alleged construction defect; (2) replacement cost of the real property; or (3) reasonable cost to repair the alleged construction defect, together with \u2018relocation costs.\u2019\u201d\u00a0 CDARA also requires that the party claiming construction defects file an initial list of alleged defects in any arbitration or litigation.\u00a0 This list may be amended if additional defects are discovered. CDARA also limits the type of negligence claims that may be asserted by a party.\u00a0 Finally, CDARA allows parties making construction defect claims additional time to file an action under the relevant statute of limitations to recover damages if the NOC process was completed.<\/p>\n

Conclusion<\/p>\n

While this summary may depict CDARA as fairly uncomplicated, this body of law and how to interpret and apply it to construction defect cases is a constant source of debate amongst construction defect litigators.\u00a0 Colorado\u2019s construction defect law is continually evolving to address the interests of the homeowners, builders, designers and manufacturers alike.\u00a0 This ever-changing legislation serves as an indicator to construction litigators in Colorado that this body of law will not become static anytime in the near future.<\/p>\n

via A Short Summary of the Colorado Construction Defect Action Reform Act | Primerus<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Anne K. McMichael, Esq. For 12 years, the Construction Defect Action Reform Act (C.R.S. \u00a7 13-20-801, et. Seq.) or \u201cCDARA\u201d, has governed how construction defect litigation and arbitration actions are conducted in Colorado.\u00a0 While portions of this act are reasonably straightforward, several of the sections are subject to ongoing debate as to how these concepts… Continue reading A Short Summary of the Colorado Construction Defect Action Reform Act<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[14,4],"tags":[120,12,19],"class_list":["post-2497","post","type-post","status-publish","format-standard","hentry","category-construction-2","category-construction-defects","tag-colorado","tag-construction","tag-construction-defects-2","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nA Short Summary of the Colorado Construction Defect Action Reform Act - Advise & Consult, Inc.<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/short-summary-colorado-construction-defect-action-reform-act\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"A Short Summary of the Colorado Construction Defect Action Reform Act - Advise & Consult, Inc.\" \/>\n<meta property=\"og:description\" content=\"Anne K. McMichael, Esq. For 12 years, the Construction Defect Action Reform Act (C.R.S. \u00a7 13-20-801, et. 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