Construction Defect Bill Geared to Protect Colorado Builders

February 20, 2001

A bill designed to protect builders and subcontractors from excessive liability when their homes or commercial properties are found to have construction defects is being supported by insurers, homebuilders and the Colorado plaintiffs’ bar association.

H.B. 1166 – introduced in January – would create the Construction Fair Remedy Act to protect construction professionals (architects, engineers, builders, builder vendors, or contractors) as well as property owners. The bill’s amended provisions would:

Require a claimant to serve the construction professional with a notice of claim before filing suit;

Prohibit a claim unless a defect has resulted in actual damage to a building; Prohibit a claim unless there is some actual economic loss to the claimant;

Encourage the claimant and construction professional to explore alternative methods to resolve the problem before suit is filed;

Require a claimant who files a construction defect suit to file a certified list of construction defects with the court.

“Construction defect liability has caused horrible problems for builders and property owners in California and other states, where trial lawyers view construction defect litigation as a cash cow,” said Michael Harrold, Northwest regional manager for the National Association of Independent Insurers. “In some instances, there have been class actions lawsuits and multi-million dollar awards that have cast a pall on the entire housing industry. We don’t want to see this happen in Colorado.”

A hearing on the bill is expected sometime this week in the House Committee on Business Affairs and Labor.

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