March 29, 2013

Colorado Law on Construction Defects, Part I: Statute of Limitations and Statute of Repose

From the Ground Up: A Construction Law Bulletin

Colorado's Construction Defect Action Reform Act (CDARA) includes two key statutes that help avoid stale claims and bring certainty to the construction industry and related industries (e.g., the insurance industry):

  • The statute of limitations operates to bar claims when a period of time has passed after the claim has arisen or an injury has resulted.
  • The statute of repose imposes an absolute bar on claims after a set period of time, regardless of whether the claim has arisen or an injury has resulted.  

These statutes mitigate against stale construction defect claims through clear parameters around timing and expiration:

  • Length of statute of limitations: The statute of limitations for claims concerning construction defects is two years after the claimant knew or should have known about a "physical manifestation" of the alleged defect. (A different statute of limitations applies to claims based upon potential third-party liability.)
  • Length of statute of repose: The statute of repose imposes an absolute bar on claims after six to eight years (depending on when the claim arises) after substantial completion of the construction.
  • Tolling: Each of these statutes can be tolled (i.e., the clock will stop running) under certain circumstances. In order to make this determination, it is appropriate to retain legal counsel. Expiration: Once time expires on whichever statute is applicable to a claim against a construction professional, that claim is barred.
In April's bulletin, we will review the notice of claim process for construction defect claims.

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