13-20-803.5. Notice of claim process - duty to mitigate.

Statute text

(1) (a) No later than seventy-five days before filing an action against a construction professional, or no later than ninety days before filing the action in the case of a commercial property, a claimant shall send or deliver a written notice of claim to the construction professional by certified mail, return receipt requested, or by personal service.

(b) Before filing a claim pursuant to this subsection (1) for program claims, a claimant shall mitigate the damage caused by the alleged construction defect. A claimant satisfies the duty to mitigate by taking reasonable action to prevent further damage from the construction defect. A claimant must certify in the complaint that the claimant has satisfied the duty to mitigate.

(c) If the claimant and construction professional dispute whether the claimant has satisfied the duty to mitigate described in subsection (1)(b) of this section, the claimant may proceed with the action but does not recover any damages that the construction professional proves were caused by the claimant's unreasonable failure to mitigate.

(d) A claimant does not breach the duty to mitigate if the cost to mitigate is unreasonable under the circumstances or was beyond the claimant's financial ability to perform.

(2) Following the mailing or delivery of the notice of claim, at the written request of the construction professional, the claimant shall provide the construction professional and its contractors or other agents reasonable access to the claimant's property during normal working hours to inspect the property and the claimed defect. The inspection shall be completed within thirty days of service of the notice of claim.

(3) Except as provided in section 13-20-803.3 (9), within thirty days after the completion of the inspection process conducted pursuant to subsection (2) of this section, or within forty-five days after the completion of the inspection process in the case of a commercial property, a construction professional may send or deliver to the claimant, by certified mail, return receipt requested, or personal service, an offer to settle the claim by payment of a sum certain or by agreeing to remedy the claimed defect described in the notice of claim. A written offer to remedy the construction defect shall include a report of the scope of the inspection, the findings and results of the inspection, a description of the additional construction work necessary to remedy the defect described in the notice of claim and all damage to the improvement to real property caused by the defect, and a timetable for the completion of the remedial construction work.

(3.5) (a) By the earlier of when a construction professional, other than an architect or engineer, offers to settle a claim or sixty days after a construction professional receives actual notice of claim, the construction professional shall provide the claimant with the following documents and information, to the extent the documents and information are within the construction professional's possession, custody, or control:

(I) Copies of all plans, specifications, and soil reports related to the claim;

(II) Maintenance and preventive maintenance recommendations related to the claim;

(III) The name, last-known address, and scope of work of each construction professional who contracted to perform work or provide services and did perform work or provide services related to the claim;

(IV) All documents related to the third-party inspection of the property and the name and last-known address of the inspector who performed the third-party inspection; and

(V) Copies of each insurance policy purchased by the construction professional and related to the claim through the date of the notice of claim and from the earlier start date of:

(A) The date the construction of the alleged defect was substantially completed; or

(B) The date the construction professional substantially completed work on the alleged defect.

(b) A construction professional may charge reasonable copying costs for the documents described in subsections (3.5)(a)(I), (3.5)(a)(II), (3.5)(a)(IV), and (3.5)(a)(V) of this section.

(c) Failure to provide the identifying information required in subsection (3.5)(a)(III) of this section by the applicable deadline for designating a nonparty at fault bars the construction professional from designating the unidentified construction professional as a nonparty at fault under section 13-21-111.5 (3)(b) in a subsequent action. If the construction professional fails to provide the information required in subsection (3.5)(a)(I) of this section, the claimant need not comply with the certificate of review requirement in section 13-20-803.3 (2).

(3.7) (a) By the earlier of when a construction professional who is an architect or engineer offers to settle a claim or sixty days after a construction professional receives actual notice of claim, the architect or engineer shall provide the claimant with the following documents and information, to the extent the documents and information are within the architect's or engineer's possession, custody, or control:

(I) Copies of all approved construction documents and specifications, including addendums issued during construction, prepared by the architect, engineer, or consultants;

(II) The name, last-known address, and scope of work of each architect or engineer who performed work or provided services as a consultant related to the claim and on the claimant's property; and

(III) Copies of each insurance policy purchased by the architect or engineer and related to the claim through the date of the notice of claim and from the earlier start date of:

(A) The date the construction of the alleged defect was substantially completed; or

(B) The date the architects and engineers substantially completed work related to the alleged defect.

(b) An architect or engineer may charge reasonable copying costs for the documents described in subsection (3.7)(a) of this section.

(4) Unless a claimant accepts an offer made pursuant to subsection (3) of this section in writing within fifteen days of the delivery of the offer, the offer shall be deemed to have been rejected.

(5) A claimant who accepts a construction professional's offer to remedy or settle by payment of a sum certain a construction defect claim shall do so by sending the construction professional a written notice of acceptance no later than fifteen days after receipt of the offer. If an offer to settle is accepted, then the monetary settlement shall be paid in accordance with the offer. If an offer to remedy is accepted by the claimant, the remedial construction work shall be completed in accordance with the timetable set forth in the offer unless the delay is caused by events beyond the reasonable control of the construction professional.

(6) If no offer is made by the construction professional or if the claimant rejects an offer, the claimant may bring an action against the construction professional for the construction defect claim described in the notice of claim, unless the parties have contractually agreed to a mediation procedure, in which case the mediation procedure shall be satisfied prior to bringing an action.

(7) If an offer by a construction professional is made and accepted or if a proposal made by a claimant is accepted, and if thereafter the construction professional does not comply with the offer to remedy or settle a claim for a construction defect or with the claimant's proposal, the claimant may file an action against the construction professional for claims arising out of the defect or damage described in the notice of claim without further notice.

(8) After the sending of a notice of claim, a claimant and a construction professional may, by written mutual agreement, alter the procedure for the notice of claim process described in this section.

(9) Any action commenced by a claimant who fails to comply with the requirements of this section shall be stayed, which stay shall remain in effect until the claimant has complied with the requirements of this section.

(10) A claimant may amend a notice of claim to include construction defects discovered after the service of the original notice of claim. However, the claimant must otherwise comply with the requirements of this section for the additional claims.

(11) For purposes of this section, actual receipt by any means of a written notice, offer, or response prepared pursuant to this section within the time prescribed for delivery or service of the notice, offer, or response shall be deemed to be sufficient delivery or service.

(12) Except as provided in this section and section 13-20-806, a claimant shall not recover more than actual damages in an action.

(13) An insurer, as defined in section 10-1-102 (13), shall not cancel, deny, or reduce coverage based on any claim for benefits covered by an existing liability insurance policy issued to a construction professional based on the construction professional making an offer to repair or settle a construction defect claim pursuant to this section. Any settlement or repair agreement that affects coverage is subject to insurer approval.

History

Source: L. 2003: Entire section added, p. 1363, 5, effective April 25. L. 2025: (1), (3), (7), and (12) amended and (3.5), (3.7), and (13) added, (HB 25-1272), ch. 183, p. 791, 4, effective August 6.

Annotations

Editor's note: Section 8(2) of chapter 183 (HB 25-1272), Session Laws of Colorado 2025, provides that the act changing this section applies to construction defect claims brought on or after August 6, 2025.

Annotations

Cross references: For the short title ("Colorado American Dream Act") and the legislative declaration in HB 25-1272, see section 1 of chapter 183, Session Laws of Colorado 2025.

Annotations

 

ANNOTATION

Annotations

Law reviews. For note, "Restore Colorado's Repair Doctrine for Construction-Defect Claims", see 83 U. Colo. L. Rev. 875 (2012).

As a matter of law, the notice of claim process outlined in the Construction Defect Action Reform Act constitutes an alternative dispute resolution proceeding. Melssen v. Auto-Owners Ins. Co., 2012 COA 102, 285 P.3d 328.

Plaintiff is not required to plead or prove that plaintiff complied with the notice process or that claim arose from a "construction defect". Act requires only that the plaintiff prove the elements of his or her common law negligence claim. Land-Wells v. Rain Way Sprinkler & Lands., 187 P.3d 1152 (Colo. App. 2008).

Subsection (9) contemplates the situation in which a plaintiff may file a claim in court before sending a notice of claim to a prospective defendant. Curry v. Zag Built LLC, 2018 COA 66, 433 P.3d 125.

A case commences for purposes of subsection (9) when the plaintiff files a complaint in court. Curry v. Zag Built LLC, 2018 COA 66, 433 P.3d 125.

The stay required by subsection (9) is mandatory. Curry v. Zag Built LLC, 2018 COA 66, 433 P.3d 125.