Colorado's construction industry is undergoing significant changes with the introduction of three new bills: HB24-1230, HB24-1014, and SB24-106. These pieces of legislation address various aspects of construction defect actions, alternative dispute resolution, and the role of unit owners' associations in legal matters. Let's delve into each bill to understand their implications.
HB24-1230: Protections for Real Property Owners
HB24-1230, which is "A Bill For An Act Concerning Protections for Property Owners With Respect To Improvements To Real Property," aims to provide for additional protections for homeowners facing construction defects in Colorado. The key points of the bill are:
Construction professionals who attempt to include waivers or limitations of homeowners' rights under the Construction Defect Action Reform Act or the Colorado Consumer Protection Act are void are are a violation of Colorado's Consumer Protection Act.
In addition to actual damages, a successful claimant is entitled to prejudgment interest on their claim at a rate of 6% from the date any remedial repairs are finished to the date the property is sold, and 8% thereafter.
Section 2 increases the statute of repose for construction defect claims from 6 to 10 years.
Section 3 voids waivers of class actions in a real estate contract with a construction professional.
Section 5 prohibits a homeowners' association's governing documents from altering any requirements of the Construction Defect Action Reform Act.
HB24-1014: Deceptive Trade Practice Significant Impact Standard
Under current law, to prove a private cause of action under the CCPA, a plaintiff must show: (1) that the defendant engaged in an unfair or deceptive trade practice; (2) that the challenged practice occurred in the course of the defendant’s business, vocation or occupation; (3) that it significantly impacts the public as actual or potential consumers of the defendant’s goods, services, or property; (4) that the plaintiff suffered injury in fact to a legally protected interest; and (5) that the challenged practice caused the plaintiff’s injury. Rhino Linings USA, 62 P.3d at 146-47 (citing Hall v. Walter, 969 P.2d 224 (Colo. 1998)).
HB24-1014 eliminates the Colorado Consumer Protection Act's requirement that a claimant must separately prove that a deceptive trade practice "significantly impacts the public." Instead, the bill establishes that evidence that a person has engaged in an unfair or deceptive trade practice constitutes a significant impact to the public.
SB24-106: Right to Remedy Construction Defects
SB24-106 addresses the role of unit owners' associations in legal matters concerning construction defects. Highlights include:
Right to Remedy: 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
Fiduciary Duty of Homeowners' Associations: When an association makes a claim or takes legal action on behalf of unit owners, it must act in the best interest of each individual owner. This underscores the importance of representing the collective interests of the community.
Conditions for Association Involvement: The bill specifies that for a construction defect matter to involve a unit owners' association, it must concern real estate owned by the association or all its members. Prior to bringing a claim, a homeowners' association must also obtain the written consent of at least two-thirds of the unit owners.
How These Bills Fit Within Colorado's Existing Framework
To appreciate what the proposed bills would change, it helps to look at the legal landscape they sit on top of. Colorado already has a detailed framework for construction defect claims, consumer protection enforcement, and the authority of homeowner associations to act on behalf of their members. The background below describes those existing rules without taking a position on whether or how any particular bill ultimately becomes law.
Background: CDARA's Pre-Suit Process Today
Colorado's Construction Defect Action Reform Act (CDARA, C.R.S. §§ 13-20-801 to 13-20-808) already governs how residential construction defect disputes are initiated. Before filing suit, a homeowner generally has to serve a written notice of claim identifying the alleged defects and giving the construction professional an opportunity to inspect, test, and respond with an offer to repair, settle, or deny. The statute also addresses the recovery of attorney fees, the treatment of class actions, and limits on certain damages. Any new legislation in this area necessarily interacts with this existing pre-suit framework, either by adjusting the procedural steps, expanding the categories of recoverable damages, or constraining the kinds of contract terms that can shorten or eliminate a homeowner's rights.
Background: The CCPA's 'Significant Public Impact' Standard
Under the Colorado Consumer Protection Act (CCPA, C.R.S. § 6-1-101 et seq.), a private plaintiff bringing a deceptive trade practices claim has long had to prove, among other things, that the challenged practice 'significantly impacts the public.' That requirement has often functioned as a gatekeeper: a plaintiff with a strong individual claim may still lose if the court concludes the defendant's conduct was too isolated to meet the public-impact threshold. Any legislative change that redefines or eliminates that element would shift the balance of risk between consumers and businesses across many industries, not just construction — which is why the CCPA's structure draws broad attention whenever it is on the table.
Background: HOA Standing and Authority Today
A homeowners' association generally has authority to pursue construction defect claims on behalf of the community when the alleged defects involve common elements or affect multiple units, subject to procedural requirements and any conditions in the governing documents. Decisions to file suit typically implicate fiduciary duties to the membership, notice and voting requirements, and considerations about how settlement proceeds are allocated. Proposed legislation that creates explicit 'right-to-remedy' opportunities for construction professionals, or that imposes new procedural conditions on association-led claims, modifies this existing structure rather than writing on a blank slate.
Practical Takeaways Regardless of Legislative Outcome
Whether any of these bills becomes law in its current form, is amended, or stalls, the underlying interests of property owners and construction professionals do not change. The steps outlined below are prudent under the existing framework and would remain prudent under most plausible legislative outcomes.
What Property Owners Should Be Doing Now
If you are a Colorado property owner with concerns about construction quality, the most valuable steps are typically those that preserve options. That means documenting symptoms (photographs, written timelines, communications with the builder), reviewing the original purchase or construction contract for warranty, notice, arbitration, and limitation-of-liability provisions, and consulting counsel before any deadlines run or evidence is altered by ordinary repairs. Acting early generally preserves both the technical proof and the legal claims; waiting tends to narrow both.
What Construction Professionals Should Be Watching
Construction professionals — including builders, developers, general contractors, and subcontractors — have their own reasons to track this legislation. Form contracts, indemnity language, warranty provisions, and arbitration clauses that comply with today's rules may need to be revisited if new limits on waivers or class-action language are enacted. Insurance program review and an audit of common subcontract flow-down provisions are useful steps even before any bill is signed, because they reduce exposure under the existing framework and prepare for changes that may follow.
In conclusion, these three bills represent a significant overhaul in Colorado construction defect law. Stay tuned for further developments as these bills progress through the legislative process. If you have any questions or concerns, please contact a Colorado construction defect lawyer today. Additionally, you can contact your local state legislator to voice your opinions on these bills.
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