Right to Remedy Construction Defects

In the "Construction Defect Action Reform Act" (act), Colorado law establishes procedures for bringing a lawsuit for a construction defect (claim). Section 2 Section 4 of the bill clarifies that a person that has had a claim brought on the person's behalf is also considered a claimant, and therefore, the act applies to the person for whom the claim is brought. Sections 3 and 6 create a right for a construction professional to remedy a claim made against the construction professional by doing remedial work or hiring another construction professional to perform the work. The following applies to the remedy:

• The construction professional must notify the claimant and diligently make sure the remedial work is performed; and
• Upon completion, the claimant is deemed to have settled and released the claim, and the claimant is limited to claims regarding improper performance of the remedial work.

To bring a claim or related action, section 4 section 2 requires a unit owners' association (association) to obtain the written consent of at least two-thirds 60% of the actual owners of the units in the common interest community. The consent must contain the currently required notices must be signed by each consenting owner, and must have certain attestations.

Under the act, a claimant is barred from seeking damages for failing to comply with building codes or industry standards unless the failure results in:

• Actual damage to real or personal property;
• Actual loss of the use of real or personal property;
• Bodily injury or wrongful death; or
• A risk of bodily injury or death to, or a threat to the life, health, or safety of, the occupants.

• The association and each claim are subject to each defense, limitation, claim procedure, and alternative dispute resolution procedure that each unit owner would be subject to if the unit owner had brought the claim; and
• The association has a fiduciary duty to act in the best interest of each unit owner.

(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)