Understanding the Colorado Homeowner Protection Act (HPA) and Its Impact on Construction Defect Actions
The Colorado Homeowner Protection Act (HPA) is a critical piece of legislation designed to safeguard the rights and remedies of residential property owners in the state, particularly in the context of construction defect actions. Passed in 2007, the HPA works in conjunction with the Colorado Construction Defect Action Reform Act (CDARA) to ensure that homeowners retain their full legal rights without being subject to contractual waivers or limitations that would otherwise restrict these rights.
The Intersection of the HPA and CDARA
CDARA was enacted to streamline the process of resolving construction defect disputes, providing a framework within which claims must be handled. However, before the HPA, there was a growing concern that builders and contractors were including clauses in contracts that effectively limited homeowners' ability to seek redress for construction defects. These clauses often waived certain rights or imposed restrictive conditions that made it difficult for homeowners to pursue legitimate claims.
The HPA addresses this issue head-on by voiding any contractual provisions that attempt to waive or limit the legal rights, remedies, or damages available to homeowners under CDARA. This legislative protection ensures that residential property owners are not disadvantaged by unfair contractual terms that could prevent them from seeking the compensation they deserve.
Key Provisions of the HPA
Void Contractual Waivers: Under the HPA, any express waiver of, or limitation on, the legal rights, remedies, or damages provided by CDARA to claimants asserting claims arising out of residential property is void as against public policy. This includes any attempts to limit the ability to enforce such legal rights, remedies, or damages within the time provided by applicable statutes of limitation or repose. In other words, if a residential property owner is involved, any contractual provision that limits liability for construction defects would be considered void.
Case Example: In Heights Healthcare Co., LLC v. BCER Eng'g, Inc., 2023 COA 44, the Colorado Court of Appeals reaffirmed that contractual provisions limiting liability for construction defects in residential properties are unenforceable. This case serves as a reminder that the HPA’s protections are robust and will be upheld in court.
Protection Against Financial Burden Shifting: The HPA does not preclude construction professionals from reallocating financial risks among themselves, provided that such reallocation does not shift the financial burden to the residential homeowner. This means that while construction professionals can contractually determine which party among them will bear the financial risk of construction defects, they cannot include provisions that would completely disclaim liability for damages that a homeowner would otherwise be entitled to under CDARA.
Case Example: InTaylor Morrison of Colo. v. Aztec Consultants, Inc., 2012 Colo. Dist. LEXIS 1955, the court addressed the issue of financial risk allocation among construction professionals. The ruling made it clear that while such reallocations are permissible, they cannot undermine the rights of homeowners as protected under the HPA and CDARA.
Preservation of Homeowner Rights: The primary purpose of the HPA is to ensure that residential property owners' rights and remedies under CDARA are preserved by invalidating any contractual provisions that attempt to waive or limit these rights. This protection is specifically aimed at preventing homeowners from bearing the financial risks associated with construction defects, which should remain with the construction professionals.
Case Example: In S. Conejos Sch. Dist. RE-10 v. Wold Architects Inc., 2023 COA 85, the court emphasized that the HPA's protections are intended to prevent any contractual terms that could potentially deprive homeowners of their full legal rights in the event of a construction defect.
Conclusion
The Colorado Homeowner Protection Act serves as a powerful tool for residential property owners, ensuring that their rights and remedies in construction defect actions are fully protected. By invalidating contractual provisions that attempt to limit these rights, the HPA shifts the financial risk of construction defects back to the construction professionals where it belongs. Homeowners in Colorado can rest assured that their legal rights under CDARA will not be compromised by unfair contract terms, thanks to the robust protections provided by the HPA.
This legislative framework not only strengthens the position of homeowners but also promotes accountability and responsibility within the construction industry, ensuring that professionals are held to the highest standards of care and quality.
The information provided on this website is for general informational purposes only and should not be construed as legal advice or legal opinion. You should not act or refrain from acting on the basis of any information provided on this website without seeking legal advice from an attorney.