Construction Defects

Buying or building a home in Colorado is, for most people, the single largest investment they will ever make. When that investment is undermined by water intrusion, foundation movement, a roof that should not be failing, or work that simply does not match the contract, the consequences are rarely small. We represent Colorado homeowners — never builders, developers, or insurance companies — in construction defect cases governed by the Colorado Construction Defect Action Reform Act (CDARA).

Construction defect claims in Colorado are heavily regulated. There is a mandatory pre-suit notice and inspection process, a two-year statute of limitations, a six-to-eight-year statute of repose, statutory limits on the damages a homeowner can recover, and a separate track for enhanced damages under the Colorado Consumer Protection Act. This page walks through how those rules work in practice. If you are early in a project and trying to avoid problems before they start, our guide to protecting your investment and preventing defects covers the steps homeowners can take up front.

Understanding Construction Defects

What Is a Construction Defect?

A construction defect is a condition that does not meet generally accepted standards of reasonableness in the construction industry. Those standards are typically set by the construction contract and by local building codes, which in Colorado largely follow the International Building Code. The common types of defects we see fall into two broad categories: patent defects (visible on inspection) and latent defects (hidden, often for years, until they cause damage).

Patent Defects

Patent defects are readily apparent to a trained building professional during a site inspection — no intrusive or destructive testing required. Common examples include:

• Large cracks in a basement foundation

• A prematurely aging or improperly installed roof

• Visibly faulty plumbing or electrical work

• Code violations identifiable on inspection

Latent Defects

Latent defects exist at the time of construction but are not detectable without intrusive testing. They can take years to manifest and often cause significant structural damage before anyone realizes what is happening. Common examples include:

• Building subsidence (foundation sinking or settling)

• Ineffective waterproofing behind cladding or below grade

• Under-strength structural components such as joists, I-beams, and roof trusses

Common Construction Defects in Colorado

Some defect patterns are tied to local geology and climate. The ones we see most often in Colorado include:

Expansive Soils

Much of the Front Range sits on expansive soils — clay that swells and shrinks with changes in moisture content. Colorado's expansive soil is one of the most common drivers of foundation damage in the state. When a builder fails to properly account for it through soil testing, foundation design, drainage, and appropriate slab construction, the result is often subsidence, cracked foundations, slab movement, cracked stucco and drywall, and a cascade of related structural problems.

Roofing

Improperly sealed penetrations and transitions, and roofs without adequate slope, allow water to pool and eventually find its way into the structure. By the time interior staining shows up, the damage to sheathing, framing, and insulation is usually well underway.

Windows and Doors

Failing to properly flash and seal around window and door jambs and trim is one of the most common sources of water intrusion in new construction. It also lets in drafts and pests, and contributes to long-term envelope failure.

Balconies and Decks

Design or installation flaws on exterior features — particularly slope and waterproofing details where the feature meets the structure — can direct water back toward the building rather than away from it.

Grading and Drainage

Site grading should direct water away from the home and foundation. When it doesn't, the result is typically some combination of basement leaks, rot, mold, and foundation movement.

Colorado Construction Defect Law

The Construction Defect Action Reform Act (CDARA)

Construction defect litigation and arbitration in Colorado are governed by the Colorado Construction Defect Action Reform Act (CDARA), codified at C.R.S. § 13-20-801 and the surrounding statutes. CDARA has been in place for more than two decades and sets out the pre-suit process, the limits on certain claims, and the damages a homeowner can recover from a construction professional.

Who Is a “Construction Professional”?

CDARA applies to actions against a "construction professional" caused by a defect in the design or construction of an improvement to real property. The statute defines that term broadly — it covers architects, contractors, subcontractors, developers, builders, builder-vendors, engineers, and inspectors involved in the design, supervision, inspection, construction, or observation of the improvement. In practice, almost everyone involved on the construction side of a residential project is covered.

The Notice of Claim Process

Filing the Notice of Claim

Before suing a construction professional, a homeowner (usually through counsel) must serve a Notice of Claim (NOC). The NOC's purpose is to put the construction professional on reasonable notice of the alleged defects and give the parties a chance to resolve the dispute without litigation. CDARA requires the NOC to be served at least 75 days before suit for residential property — 95 days for commercial. If the builder ignores the notice, we cover the options in our article on what to do when a builder doesn't respond to a CDARA notice.

The Response Process

Within 30 days of receiving the NOC, the construction professional must be allowed a reasonable opportunity to inspect the property and the claimed defects. Within another 30 days after the inspection (45 days for commercial), the construction professional may offer a monetary settlement or an offer to repair.

Any written offer to remedy the defects must include:

• A report describing the scope of the inspection

• The findings and results of that inspection

• A description of the additional work needed to remedy the defect

• A description of any related damage to the improvement

• A timetable for completion of the remedial work

Moving Forward After the NOC Process

If no offer is made — or the homeowner rejects the offer — the homeowner can then file suit on the defects described in the NOC. If the contract requires pre-suit mediation, that step must also be completed first. A failure to comply with the NOC process generally results in any lawsuit or arbitration being stayed until the process is completed.

Time Limits for Filing Claims

Statute of Limitations

Under C.R.S. § 13-80-104, a construction defect action must be filed within two years after the claim "arises." A claim "arises" when the claimant — or the claimant's predecessor in interest — discovers, or in the exercise of reasonable diligence should have discovered, the physical manifestations of a defect that ultimately causes the injury.

Statute of Repose

A statute of repose is a separate, outside deadline. Colorado's statute of repose for construction defect claims runs from substantial completion of the project, not from discovery. It is generally six years, but it can extend to eight: if the defect first manifests during the fifth or sixth year after substantial completion, the claim must be brought within two years of that manifestation.

When a defect was discovered, when substantial completion occurred, and which deadline controls are common points of dispute — and a frequent reason for early motion practice. These deadlines move quickly once a defect is identified, so the earlier we can evaluate them, the better.

Legal Requirements and Limitations

Initial List of Defects

After suit is filed, CDARA requires the claimant to file an initial list of alleged defects in the arbitration or litigation. C.R.S. § 13-20-803. The list can be amended if additional defects are discovered, but the NOC process must be completed for each newly added defect.

Limitations on Negligence Claims

CDARA limits a homeowner's ability to bring negligence claims. Under C.R.S. § 13-20-804, no negligence claim seeking damages for a construction defect may be asserted if the claim arises from a failure to construct in substantial compliance with an applicable building code or industry standard. A negligence claim may still be available where there is actual damage or loss of use of the property, bodily injury, a risk of bodily injury, or another safety hazard.

Recoverable Damages

Under C.R.S. § 13-20-802.5, a construction professional is generally not liable for more than "actual damages," defined as the lesser of:

• The fair market value of the real property without the alleged construction defect

• The replacement cost of the real property

• The reasonable cost to repair the defect, together with relocation costs and (for residential property) other direct economic costs related to loss of use, interest as provided by law, and costs of suit and reasonable attorney fees where awardable by contract or law

Colorado courts have also recognized that actual damages can include compensation for inconvenience, emotional stress, and impairment of the quality of life. See Hildebrand v. New Vista Homes, II, LLC.

Enhanced Damages Under the Colorado Consumer Protection Act

Where a construction professional's conduct also violates the Colorado Consumer Protection Act (CCPA), a homeowner may be entitled to enhanced damages — up to three times actual damages (treble damages) — if the homeowner proves bad-faith conduct by clear and convincing evidence.

To recover enhanced damages, the homeowner must establish a CCPA violation plus one of the following:

• The construction professional's monetary settlement offer is less than 80% of the actual damages awarded.

• The reasonable cost to complete the construction professional's offered repairs is less than 80% of the actual damages awarded.

• The construction professional fails to respond to the Notice of Claim or fails to substantially comply with the terms of its own settlement offer.

Enhanced damages under this provision are statutorily capped at $250,000.

How We Handle Construction Defect Cases

Construction defect work is detail-heavy. The cases that succeed tend to be the ones where the investigation is thorough, the experts are right for the defects at issue, and the CDARA timelines are tracked precisely from the first phone call.

In practice, our work on these matters typically includes:

• An initial evaluation of the defects, the relevant contracts, the chain of construction professionals, and the applicable deadlines.

• Coordination with engineers, building envelope consultants, and other experts to scope the defects before notice is served.

• Preparing and serving a Notice of Claim that frames the defects accurately and preserves your remedies.

• Handling the inspection and response process, evaluating any offer to repair or settle, and advising you on whether to accept, counter, or move to litigation.

• Litigating or arbitrating the case through resolution when no acceptable offer is made.

Special considerations apply when the responsible builder has filed for bankruptcy — we cover those in our article on pursuing claims when your builder files for bankruptcy.

Talk With Us

If you believe your home has construction defects, the earlier you understand your options the more flexibility you have. Consultations are free, confidential, and carry no obligation. Call us at (303) 276-2647 or schedule a consultation online.