Colorado’s Construction Defect Reform Act: What Homeowners Should Know

Construction defects can be more than frustrating; they can cause property damage, financial loss, and even serious injury. Bowman Law represents homeowners and occupants recover compensation for construction-related damages under Colorado law. Whether you are dealing with a roofing defect, foundation issues, or a collapsed ceiling, it is important to understand how Colorado construction defect law works and what your legal options are.

What is the Construction Defect Law in Colorado?

Colorado’s construction defect law is governed primarily by the Construction Defect Action Reform Act (‘CDARA’). This law was first enacted in 2001 and has been amended several times to balance the interests of homeowners, builders, subcontractors, and insurers. It is designed to set clear standards for how construction defect disputes must be handled, particularly before litigation begins.

CDARA was created to provide a framework for resolving construction defect disputes fairly and efficiently. The legislature wanted to curb what it viewed as excessive litigation in the construction industry, while still protecting homeowners who suffer damages from defective construction.

Notice of Claim

Before a homeowner or homeowner association can file a lawsuit or arbitration for construction defects, CDARA requires a Notice of Claim (‘NOC’) to be served on the builder, developer, contractor, or design professional.

• The NOC must be in writing and describe the alleged defects in reasonable detail.
• Once received, the builder has the right to inspect the property within 30 days to evaluate the alleged defects.
• After inspection, the builder may make a written offer to repair or provide a monetary settlement offer within 30 days (or 45 days for larger projects).
• The homeowner can accept or reject the offer. If rejected, the homeowner may proceed with a lawsuit or arbitration.

This step is mandatory. Filing a defect lawsuit without first complying with the NOC process can result in dismissal of the claim.

Statute of Limitations

CDARA sets strict deadlines for bringing construction defect claims:

• Statute of Limitations: A claim must be brought within two years after the claimant discovers or should have discovered the defect. For example, if you discover damage/leaking following the installation of your new roof on January 1, 2025, your two-year statute of limitations for filing a claim would generally expire on January 1, 2027.
• Statute of Repose: Regardless of discovery, claims must be brought within six years of substantial completion of the improvement. If a defect is discovered in the fifth or sixth year, the period can be extended up to eight years. For example, if you are building a new home and the home was substantially completed (majority of the work was finished) on January 1, 2020, the statute of repose would expire on January 1, 2026, meaning any claims must be filed by that date, even if you have not discovered the defect yet. 

These deadlines are strictly enforced by Colorado courts, making timely action critical for homeowners.

These rules are strict — even serious defects can become barred if not acted upon on time. Contact Bowman Law to ensure your claim is preserved.

Contractor’s Liability for Defects

Contractors and builders in Colorado can be held liable for construction defects that result in:

• Property damage: foundation issues (cracks, settling, sinking, shifting), water intrusion (leaks, mold from faulty roofs or waterproofing), structural failures (framing errors, poor load-bearing calculations), mechanical/electrical/plumbing failures (faulty installations leading to leaks or fires), and substandard materials or poor workmanship causing damage.
• Bodily injury:  electrical fires, explosions from gas systems, structural collapses causing accidents, and structural failures that lead to injuries or death.
• Code violations: Building inspectors play a role in ensuring safety and compliance by reviewing construction plans, overseeing the building process, and confirming that the completed work meets local building codes. When violations are found, they can issue citations or halt progress until corrections are made.
• Financial losses related to repairs- including repairing or replacing defective components like faulty windows, flooring, roofing, the direct economic costs of related damage, such as fixing water damage, mold removal, and repairing structures like walls and floors, and the reduced property value when defects lower the home’s worth.

Liability may extend to general contractors, subcontractors, architects, and engineers. Colorado law specifically allows homeowners to pursue claims for both physical and economic harm caused by defective construction. See C.R.S. § 13-20-802.5 for legal definitions of responsible parties.

Damages Allowed Under CDARA

CDARA limits the damages a homeowner may recover in construction defect cases to:

• The reasonable cost of repair of the defect;
• Diminished value of the property (if repairs are not practical);
• Relocation costs (if the homeowner must vacate during repairs); and
• Other direct economic losses caused by the defect.

Non-economic damages, such as emotional distress or inconvenience, are not recoverable under CDARA.

Does Homeowner’s Insurance Cover Construction Defects?

Homeowners insurance generally does not cover construction defects. These policies are designed to protect against sudden and accidental events, such as fire, hail, or a burst pipe, rather than poor workmanship or faulty materials. Most insurance contracts include explicit exclusions for losses caused by defective design, construction, or workmanship. This means that if a roof leaks because it was improperly installed, the expense of repairing or replacing the defective work itself is not covered. In these cases, the responsibility falls on the builder, subcontractors, or developers, and claims are typically pursued under construction defect law, such as Colorado’s Construction Defect Action Reform Act (CDARA).

There is, however, an important distinction between the defect itself and the damage it may cause. While the cost of repairing defective construction is excluded, the resulting damage can sometimes be covered. For example, if defective plumbing was installed in a home, the policy would not pay to redo the plumbing. But if that plumbing later bursts and causes water damage to the floors, walls, or personal property, the resulting water damage may be covered. Insurers often refer to this as coverage for “resulting loss.”

It is also critical to distinguish between a homeowner’s personal insurance and the insurance carried by builders or subcontractors. Builders typically maintain commercial general liability (CGL) insurance, which can provide coverage when their defective work causes property damage. In a construction defect case, the homeowner’s recourse is usually to pursue claims against the builder under CDARA. Once that claim is made, the builder may then turn to its liability insurer for defense and indemnification.

In addition, many new homes come with express warranties from builders or developers, which can provide some direct relief for defective workmanship or materials. These warranties often cover general work for one year and structural components for longer periods. Homeowners should review these warranties closely, as they can supplement CDARA rights and claims.

To ensure you are compensated for poor workmanship or defects, contact an attorney to file a claim against the right parties.

What Is the Homeowner Protection Act in Colorado?

The Homeowner Protection Act of 2007 (‘HPA’) protects against unfair practices in the construction industry that limited homeowners’ rights to bring construction defect claims. Before the HPA was passed, many builders and developers inserted broad disclaimers and waivers into contracts and purchase agreements that stripped homeowners of important legal rights. For example, contracts often contained provisions waiving claims for negligence or limiting damages to repair costs only, regardless of the actual harm. The HPA was passed to ensure homeowners could not be forced to give up these protections in advance. It protects homeowners from being forced to accept subpar repairs or give up their rights unknowingly.

The central feature of the HPA is that it invalidates any clause in a contract that attempts to waive or limit a homeowner’s rights under CDARA or Colorado law.

• Builders cannot require homeowners to waive negligence claims.
• Contract terms that limit damages (for example, “repair only” clauses) are unenforceable.
• Waivers of statutes of limitation or repose are also prohibited.

This means that even if a contract says otherwise, a homeowner in Colorado retains the full rights provided by law to pursue defect claims against a builder or contractor.

The HPA specifically restricts contract provisions that:

• Require homeowners to accept only limited remedies.
• Limit the timeframe for bringing claims (shorter than what CDARA allows).
• Attempt to exclude certain types of damages recoverable under the law.

In effect, it prevents builders from writing contracts that shift all the risk of poor construction onto homeowners.

While CDARA sets out the process for construction defect claims (notice of claim, right to inspect and repair, timelines, and damages), the HPA ensures that builders cannot contractually undercut those protections. Together, they form the backbone of Colorado construction defect law.

Bowman Law Can Help with Construction Defect & Injury Claims

Our construction defect attorneys represent clients in claims involving:

• Building defect lawsuits (including design defect, material defect, subpar workmanship, and claims for improper installations)
• Structural collapses causing injury
• Mold or water damage from construction failures
• Slips, trips, and falls caused by unsafe conditions

If you believe you have a claim pursuant to CDARA, contact Bowman Law to:

• Investigate defects with help from building inspectors and engineers (including determining the right parties at fault for these defects)
• File timely Notices of Claim and legal actions that comply with CDARA
• Negotiate with builders or insurers on your behalf
• Litigate aggressively when parties refuse to take responsibility

When Should You Contact a Lawyer?

You should contact a lawyer if:

• You’ve discovered a serious construction issue
• Your roof is leaking, sagging, or unsafe
• You or a family member were injured due to a structural defect
• The builder has ignored your repair requests after poor workmanship was discovered
• You’re unsure if your insurance or warranty covers the damage

Know Your Rights, Protect Your Property

Colorado’s construction defect laws are complex, but they are designed to protect homeowners and injury victims. Whether you’re pursuing a roofing defect lawsuit, have suffered an injury due to unsafe construction, or are considering legal action under CDARA, you don’t have to do it alone.

Bowman Law, LLC fights for fair compensation and builder accountability. If you think you may have a claim, call 720-863-6904 for a free consultation.