What Every Homeowner Should Know About Colorado’s Statutes of Limitations and Repose

April 2, 2012

The statutes of limitations and repose have profound effects on every new homeowner’s rights against a builder for construction defect claims.  In short, the statutes of limitations and repose state that if homeowners do not pursue their claims within a set amount of time, their claims are forever time-barred.  Despite this harsh reality, many new homeowners have never even heard of the statute of limitations or the statute of repose (it usually isn’t attached to the letter you receive from your builder congratulating you on the purchase of your new home).  That said, here are the basics every homeowner should know about the statute of limitations and repose:

1. What is the Statute of Repose?  Colorado’s statute of repose sets a 6-year maximum time limit on all construction defect claims against construction professionals, which includes general contractors, subcontractors, design professionals, inspectors and virtually anyone else involved in the day-to-day construction process.  With limited exceptions, homeowners are given 6 years from the date of “substantial completion of the improvement to real property” to bring claims against a construction professional.   C.R.S. § 13-80-104(1)(a).  If a homeowner discovers a defect in the 5th or 6th year, the statute of repose can be extended out for an additional 2 years or 8 years total.
2. When is substantial completion?  The “date of substantial completion of the improvement to real property” is heavily fact dependent and will vary on a case by case basis.  As a general concept, courts usually look to the date that the home became suitable for habitation.  In some instances, it is date that the certificate of occupancy was issued.  In the multi-family context, courts often apply the date that the final certificate of occupancy was issued for the final building or final unit in the community.
3. What is the Statute of Limitations?  Colorado’s statute of limitations is an additional time limitation that operates to bar “stale” construction defect claims.  It is designed to prevent homeowners from delaying and not pursuing their claims after they learn that a construction defect exists.  The statute of limitations requires all homeowners to bring construction defect claims against a construction professional within 2 years from the date the “claim for relief arises.”  C.R.S. § 13-80-104(1)(a).
4. When does the claim for relief arise?  “A claim for relief arises under this section at the time 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 in the improvement which ultimately causes the injury.”  § 13-80-104(b)(I).  Again, whether a homeowner discovered or should have discovered the physical manifestations of a construction defect is heavily fact dependent and will vary on a case by case basis.  Some examples of things that could be physical manifestations of construction defects are water leaks, cracking, ice damming, settling and/or heaving, and flooding.

Homeowners experiencing construction defects who may have potential statute of limitations and repose concerns are urged to contact an attorney who can investigate the issues and provide proper guidance.  Nevertheless, don’t delay!  It is never a pleasant conversation to explain to homeowners that they have real problems with home, but they will have to bite the bullet because their claims are time-barred.  This is the number one reason our office declines cases!