A Bill for an Act
Page 1, Line 101Concerning protections for homeowners that relate to
Page 1, Line 102improvements to real property.
Bill Summary
(Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.)
In an action against a construction professional, section 2 of the bill requires the construction professional to provide the claimant or the claimant's legal representative with:
- Copies of all plans, specifications, soils reports, and available engineering calculations;
- Any maintenance and preventive maintenance recommendations;
- The name, last-known address, and scope of work of each construction professional that performed work or services; and
- Copies of all insurance policies held by the construction professional during the appropriate time.
- Prohibits group lawsuits against a construction professional; or
- Imposes different or additional requirements than the statutory requirements to bring or join a legal action.
The construction professional may charge reasonable copying costs for the documents. Failure to provide the identifying information of the other construction professionals bars the construction professional from designating the unidentified construction professionals as nonparties at fault in any subsequent action.
Section 3 requires a court to award prejudgement interest of 8% to a prevailing claimant who alleges defects in a residential property construction.
Section 5 voids a provision in a real estate contract that:
Section 6 changes the time when a claim of relief arises, for the purposes of the statute of limitation and repose, to include both the discovery of the physical manifestation and the cause of the defect.
Current law authorizes, subject to the requirements of the common interest community's (community) declarations, a community to engage in certain actions, such as instituting, defending, or intervening in litigation or administrative proceedings on matters affecting the community. Section 7 exempts an association's authority to institute, defend, or intervene in litigation proceedings concerning construction defects from the requirement that the action be subject to the declaration.
Section 8 requires the department of regulatory agencies to include in its "SMART Act" report information concerning construction liability insurance and the basis for rates.
Page 2, Line 1Be it enacted by the General Assembly of the State of Colorado:
Page 2, Line 2SECTION 1. Legislative declaration. (1) The general assembly finds that:
Page 2, Line 3(a) Homeownership is the nexus of the American dream, and the
Page 2, Line 4purchase of a home represents one of the most significant investments an individual can make;
Page 2, Line 5(b) Buying a home is the biggest source of wealth building that most people can make in their lifetime;
Page 3, Line 1(c) Homeowners should expect their new homes to be built correctly;
Page 3, Line 2(d) If a home is built with construction defects, builders should be responsible for correctly fixing the defects;
Page 3, Line 3(e) Colorado has some of the weakest protections in the country for homeowners facing construction defects;
Page 3, Line 4(f) Homeowners facing construction defects lack rights that Colorado consumers have for other purchases;
Page 3, Line 5(g) Colorado law disincentivizes timely repairs by builders and
Page 3, Line 6allows builders to run out the clock on the short window that homeowners have for legal action and to drag out claims that move forward;
Page 3, Line 7(h) Construction defects arising from the negligence of builders
Page 3, Line 8can result in costly repairs and diminished home property values and can cause undue financial hardship for homeowners and their families;
Page 3, Line 9(i) Repairs of construction defects should happen as quickly as possible;
Page 3, Line 10(j) Builders and developers are not required to carry construction
Page 3, Line 11liability insurance in Colorado, making it difficult for homeowners to hold them accountable for repairs; and
Page 3, Line 12(k) Builders and developers often put up barriers that go beyond what is required by law for homeowners to take legal action.
Page 3, Line 13(2) The general assembly declares that this act:
Page 3, Line 14(a) Seeks to protect the wealth building and equity that homeownership provides to Colorado families;
Page 3, Line 15(b) Is intended to align homeowners' consumer rights with the
Page 3, Line 16rights afforded consumers of other items purchased;
Page 4, Line 1(c) Promotes timely repairs of construction defects by builders; and
Page 4, Line 2(d) Ensures that Colorado law sets the requirements for homeowners to bring legal action for construction defects.
Page 4, Line 3SECTION 2. In Colorado Revised Statutes, 13-20-803.5, add (3.5) as follows:
Page 4, Line 413-20-803.5. Notice of claim process. (3.5) (a) Within the
Page 4, Line 5earlier of sixty days after a construction professional
Page 4, Line 6actually receives a notice of claim or after a construction
Page 4, Line 7professional offers to settle a claim, the construction
Page 4, Line 8professional shall provide the claimant or the claimant's legal representative with the following:
Page 4, Line 9(I) Copies of all plans, specifications, soils reports, and
Page 4, Line 10available engineering calculations related to the claimant's property;
Page 4, Line 11(II) Any maintenance and preventive maintenance recommendations for the property;
Page 4, Line 12(III) The name, last-known address, and scope of work of
Page 4, Line 13each construction professional that performed work or services on the claimant's property; and
Page 4, Line 14(IV) Copies of all insurance policies held by the construction professional from the earlier start date of:
Page 4, Line 15(A) The date construction of the improvement to real
Page 4, Line 16property was substantially complete through the date of the notice of claim; or
Page 4, Line 17(B) The date the construction professional substantially
Page 4, Line 18completed its work on the improvement to real property through the date of the notice of claim.
Page 5, Line 1(b) The construction professional may charge reasonable
Page 5, Line 2copying costs for the documents described in subsections(3.5)(a)(I), (3.5)(a)(II), and (3.5)(a)(IV) of this section.
Page 5, Line 3(c) Failure to provide the identifying information
Page 5, Line 4required in subsection (3.5)(a)(III) of this section bars the
Page 5, Line 5construction professional from designating the unidentified
Page 5, Line 6construction professionals as nonparties at fault under section 13-21-111.5 (3)(b) in any subsequent action.
Page 5, Line 7SECTION 3. In Colorado Revised Statutes, 13-20-806, add (8) as follows:
Page 5, Line 813-20-806. Limitation of damages. (8) (a) With regard to
Page 5, Line 9claims arising from alleged defects in residential property
Page 5, Line 10construction, a court shall award prejudgment interest to a
Page 5, Line 11claimant who prevails with the claim. The amount of the awarded prejudgement interest is:
Page 5, Line 12(I) Added to the amount of the actual damages at a rate of eight percent per year; and
Page 5, Line 13(II) Compounded annually beginning on the date of the
Page 5, Line 14mailing of the claimant's first notice of claim sent in accordance with section 13-20-803.5.
Page 5, Line 15(b) Notwithstanding subsection (8)(a) of this section, prejudgment interest does not accrue:
Page 5, Line 16(I) After the date a statutory settlement offer is made
Page 5, Line 17pursuant to section 13-20-803.5 (3) if the statutory settlement offer exceeds the amount of the judgment; or
Page 5, Line 18(II) On the part of any actual damages awarded for
Page 6, Line 1amounts actually spent before judgment and for which interest under section 5-12-102 (1)(b) is awarded.
Page 6, Line 2(c) Postjudgment interest accrues on the judgment as provided by law.
Page 6, Line 3SECTION 4. In Colorado Revised Statutes, 38-33.3-303.5, amend (1)(d)(I)(A) as follows:
Page 6, Line 438-33.3-303.5. Construction defect actions - disclosure -
Page 6, Line 5approval by unit owners - definitions - exemptions. (1) (d) Approval
Page 6, Line 6by unit owners - procedures. (I) (A) Notwithstanding any provision of
Page 6, Line 7law or any requirement in the governing documents, the executive board
Page 6, Line 8
mayonlyPage 6, Line 9if authorized within the voting period by owners of units to which a
Page 6, Line 10majority of votes in the association are allocated.
SuchPage 6, Line 11not required for an association to proceed with a construction defect
Page 6, Line 12action if the alleged construction defect pertains to a facility that is
Page 6, Line 13intended and used for nonresidential purposes and if the cost to repair the
Page 6, Line 14alleged defect does not exceed fifty thousand dollars.
SuchPage 6, Line 15is not required for an association to proceed with a construction defect
Page 6, Line 16action when the association is the contracting party for the performance of labor or purchase of services or materials.
Page 6, Line 17SECTION 5. In Colorado Revised Statutes, add 13-20-809 as follows:
Page 6, Line 1813-20-809. Void provisions concerning actions - definition.
Page 6, Line 19(1) As used in this section, unless the context otherwise
Page 6, Line 20requires, "declaration" has the meaning set forth in section 38-33.3-103 (13).
Page 6, Line 21(2) A provision in a contract to sell real estate in a declaration or in a governing document is void if:
Page 7, Line 1(a) The provision limits a property owner's right to bring
Page 7, Line 2or join an action with one or more claimants against a construction professional; or
Page 7, Line 3(b) The provision imposes different or additional
Page 7, Line 4requirements than the requirements in this part 8 or section 38-33.3-303.5 that are necessary to bring or join an action.
Page 7, Line 5SECTION 6. In Colorado Revised Statutes, 13-80-104, amend (1)(b)(I) as follows:
Page 7, Line 613-80-104. Limitation of actions against architects,
Page 7, Line 7contractors, builders or builder vendors, engineers, inspectors, and
Page 7, Line 8others. (1) (b) (I) Except as otherwise provided in
subparagraph (II) ofPage 7, Line 9
this paragraph (b)Page 7, Line 10relief arises under this section at the time the claimant or the claimant's
Page 7, Line 11predecessor in interest discovers or in the exercise of reasonable diligence
Page 7, Line 12should have discovered both of the following concerning the defect in the improvement that ultimately causes the injury:
Page 7, Line 13(A) The physical manifestations of
ain the improvement which ultimately causes the injury.Page 7, Line 14(B) The cause of the defect.
Page 7, Line 15SECTION 7. In Colorado Revised Statutes, 38-33.3-302, amend (1)(d) as follows:
Page 7, Line 1638-33.3-302. Powers of unit owners' association. (1) Except as
Page 7, Line 17provided in subsections (2) and (3) of this section, and subject to the
Page 7, Line 18provisions of the declaration, the association, without specific authorization in the declaration, may:
Page 7, Line 19(d) Institute, defend, or intervene in litigation or administrative
Page 8, Line 1proceedings in its own name on behalf of itself or two or more unit
Page 8, Line 2owners on matters affecting the common interest community. With
Page 8, Line 3regard to instituting, defending, or intervening in litigation
Page 8, Line 4proceedings concerning construction defects, the association is not subject to the provisions of the declaration.
Page 8, Line 5SECTION 8. In Colorado Revised Statutes, add 24-34-113 as follows:
Page 8, Line 624-34-113. SMART Act reporting on homeowner's insurance.
Page 8, Line 7(1) Beginning January 1, 2026, and in January every year
Page 8, Line 8thereafter, the department of regulatory agencies shall
Page 8, Line 9include, as part of its presentation during its "SMART Act" hearing required by section 2-7-203, information concerning:
Page 8, Line 10(a) The requirements of the type and terms of insurance
Page 8, Line 11that a construction professional is required to carry to cover professional services;
Page 8, Line 12(b) A detailed listing of the insurers that offer
Page 8, Line 13residential construction liability insurance policies to
Page 8, Line 14construction professionals, including residential property developers, to cover professional services;
Page 8, Line 15(c) The rates that insurers, as defined in section 10-1-102
Page 8, Line 16(13), charge to construction professionals to cover professional services;
Page 8, Line 17(d) A detailed analysis of the basis of the rates, described
Page 8, Line 18in subsection (1)(c) of this section, including the risk factors, classifications, and coverage descriptions used to set the rates;
Page 8, Line 19(e) The terms of coverage in each insurer's construction
Page 8, Line 20liability policies;
Page 9, Line 1(f) The limitations on or exclusions from coverage that
Page 9, Line 2exist in each insurer's construction liability policies for construction projects, including multifamily projects; and
Page 9, Line 3(g) A description of the role of the division of insurance over residential construction liability insurance.
Page 9, Line 4SECTION 9. Act subject to petition - effective date -
Page 9, Line 5applicability. (1) This act takes effect at 12:01 a.m. on the day following
Page 9, Line 6the expiration of the ninety-day period after final adjournment of the
Page 9, Line 7general assembly; except that, if a referendum petition is filed pursuant
Page 9, Line 8to section 1 (3) of article V of the state constitution against this act or an
Page 9, Line 9item, section, or part of this act within such period, then the act, item,
Page 9, Line 10section, or part will not take effect unless approved by the people at the
Page 9, Line 11general election to be held in November 2026 and, in such case, will take
Page 9, Line 12effect on the date of the official declaration of the vote thereon by the governor.
Page 9, Line 13(2) This act applies to causes of action arising on or after the applicable effective date of this act.