Local Construction Defect Ordinances in Colorado

The Colorado Construction Defect Action Reform Act (“CDARA”) was first enacted in 1999, with various statutory modifications passed every few years.  See C.R.S. §§ 13-20-801, et seq.  Amendments to CDARA broadened the reach of the statute to matters of notice, insurance, waiver of warranties and damages.   CDARA now establishes a procedure to notify construction professionals of possible construction defects, and it provides for an inspection and opportunity to cure or settle defect issues.  Completion of the CDARA process is a condition precedent for initiation of construction defect litigation.

One of the more troubling developments in residential construction disputes in the past several years is the enactment of local construction defect ordinances in a number of Colorado home-rule cities including Denver (Ordinance No. 15-0811), Colorado Springs (Ordinance No. 15-93), and Aurora (Ordinance No. 2015-35), to name a few.   These ordinances sometimes imitate, but don’t faithfully replicate, the CDARA requirements resulting in a patchwork of local laws that sometimes contradict, and otherwise cannot be harmonized with CDARA.

There are very real unanswered questions as to the validity of these ordinances.  The ordinances present compelling legal issues as to constitutionality and preemption, and they create uncertainty as to the rights and obligations of the parties to a construction project.  Thus there are very real challenges for the legal practitioners and potential problems for builders, developers and property insurers.  So far this is uncharted territory as the courts have not yet addressed any of these issues.  The lesson is to beware.  It’s a procedural jungle out there.