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Residential Construction Defect Law Update

October 9, 2018

C.R.S. 38-33.3-303.5

 

Effective August 8, 2017 changes occurred to the Colorado common Interest Ownership Act regarding Construction defect actions. The following is a summary of the changes. If your community has a potential construction defect claim you need to follow these requirement. With the complexities of these charges and requirements under the Colorado Construction Defect Action Reform Act ("CDARA") we recommend any community with a potential construction defect clam to get professional advice.

 

Before the executive board, pursuant to section 38-33.3-302 (1)(d), institutes a construction defect action, the executive board shall comply with this section. "Construction defect action” refers to any civil action or arbitration proceeding brought against a construction professional to assert a claim.

Written Notice

  • Mailing:

    • The executive board shall mail or deliver written notice of the anticipated commencement of the construction defect action to each unit owner and to the address of each construction professional against whom a construction defect action is proposed.

    • The notice sent to the construction professional MUST be sent at least five business days before the mailing of the notice to the unit owners.

    • The association shall provide a copy of the verified owner mailing list to each construction professional who is sent a notice.

    • If the association commences a construction defect action against any construction professional, the association shall file its verified owner mailing list and records of votes.

  • The notice must call a meeting of the unit owners, which must be held no less than ten days and no more than fifteen days after the mailing date of the notice, to consider whether to bring a construction defect action. A failure to hold the meeting within this time period voids the subsequent vote.

  • The notice must also contain a description of the nature of the construction defect action, the relief sought, and multiple disclosures as found under section 13-20-803.5 of the "Construction Defect Action Reform Act".

Meeting

  • The construction professional against whom the construction defect action is proposed will be invited to attend and will have an opportunity to address the unit owners.The presentation at the meeting by the construction professional may, include an offer to remedy any defect.

  • The conclusion of the meeting initiates the voting period. The voting period shall end ninety days after the mailing date of the meeting notice or when the association determines that the construction defect action is either approved or disapproved, whichever occurs first.

Approval

  • The executive board may initiate the construction defect action only if authorized within the voting period by owners of units to which a majority of votes in the association are allocated.

  • Approval is not required if

  • the alleged construction defect pertains to a facility that is intended and used for nonresidential purposes.

  • if the cost to repair the alleged defect does not exceed 50 K.

  • the association is the contracting party.

  • An owner's vote shall be submitted only once and the association shall maintain a record of all votes until the conclusion of the construction defect action.

These requiremtns do not apply if the construction defect peratins to a facility that is intended and used for nonresidential purposes and if reparation costs exceed fifty thousand dollars. Additionally, the requirements do not apply if the association is the contracting party for labor performened, or materials/services purchased. 

Any further questions can be directed to the office of Goodman and Wallace.

 

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