Understanding Colorados Construction Defect Law (CDARA)

Construction projects—whether residential homes, condos, or commercial developments—require significant financial investment and trust. Unfortunately, defects can appear after the work is completed, leaving owners with costly repairs and uncertainty about who is responsible. Colorado has a unique set of laws governing these disputes, known as the Construction Defect Action Reform Act (CDARA).

If you are a homeowner, HOA, or business owner dealing with construction issues, understanding CDARA is crucial. This guide explains what the law covers, how it affects your rights, and why working with a skilled Denver construction defect lawyer can make the difference in protecting your investment.

What Is CDARA?

The Colorado Construction Defect Action Reform Act (CDARA) was first passed in 2001 and later amended to address concerns from both property owners and builders. Its purpose is to balance the rights of homeowners and HOAs with the need for builders, contractors, and developers to avoid frivolous lawsuits.

CDARA establishes:

• Pre-litigation notice requirements before filing a lawsuit.
• Timelines for when claims must be made.
• Limits on damages that can be recovered.
• Procedures for resolving disputes, often through mediation or arbitration before trial.

In short, CDARA sets the framework for how construction defect disputes are handled in Colorado courts.

What Counts as a Construction Defect?

Under Colorado law, a construction defect includes any deficiency in the design, construction, or remodeling of a property that results from:

• Failure to build according to accepted standards of care.
• Non-compliance with building codes or safety requirements.
• Use of defective materials that cause damage or risk of damage.
• Poor workmanship that leads to structural, water, or mechanical issues.

Examples include:

• Cracked foundations or settling floors.
• Roof leaks and water intrusion.
• Improper electrical or plumbing installation.
• Mold and toxic conditions from faulty construction.
• Structural instability or collapse risks.

For Denver homeowners, these issues are particularly pressing because of Colorado’s climate—heavy snow, freeze-thaw cycles, and summer hailstorms all magnify the consequences of poor construction.

Pre-Litigation Process Under CDARA

One of the most important features of CDARA is the notice of claim process. Before filing a lawsuit, a property owner must give the construction professional notice and a chance to inspect and potentially repair the alleged defects.

Steps in the CDARA Notice Process:

1. Notice of Claim Letter
• The homeowner or HOA must send written notice describing the defects.
• Builders are given at least 30 days (sometimes longer) to respond.
2. Inspection Opportunity
• The builder or contractor has the right to inspect the property to assess the claim.
3. Offer to Repair or Settle
• The builder can propose to fix the defect or offer compensation.
4. Decision by Owner
• The property owner can accept or reject the offer.
• If rejected, they may proceed with a lawsuit.

This process was designed to reduce litigation by encouraging resolution before court involvement. However, it often requires careful legal guidance to ensure deadlines and technical requirements are met.

Time Limits for Filing a Construction Defect Claim

Colorado law places strict time limits—known as statutes of limitation and repose—on when defect claims can be filed.

• Statute of Limitations: Generally, owners have two years from when the defect is discovered (or should have been discovered) to bring a claim.
• Statute of Repose: Regardless of when a defect is found, no claim can be filed more than six years after completion of the project (sometimes extended to eight years if the defect is discovered in the sixth year).

This means a homeowner who notices a leaking roof four years after construction may still sue—provided they file within two years of discovering the problem and within the six-to-eight-year window.

Missing these deadlines can bar a claim entirely, which is why consulting with a Denver construction defect lawyer as soon as issues arise is critical.

Damages Recoverable Under CDARA

Another key aspect of CDARA is how it limits damages. Homeowners and HOAs can recover for:

• Repair costs to fix the defect.
• Diminished value of the property caused by the defect.
• Relocation expenses if the property is uninhabitable.
• Interest, costs, and attorneys’ fees in certain cases.

However, CDARA does not allow for punitive damages (meant to punish the builder) unless fraud or willful misconduct can be proven. This makes documenting defects and building a solid case essential.

Impact on HOAs and Multi-Unit Housing

Denver has seen a boom in condo and townhome developments. CDARA plays a major role in how homeowners associations (HOAs) handle defect claims in these multi-family projects.

HOAs must often navigate:

• Board approval requirements before filing suit.
• Member notification obligations to keep residents informed.
• Complex damages calculations, since defects may affect common areas, not just individual units.

Because these cases involve large groups of homeowners, they tend to be high-stakes disputes with significant legal and financial consequences.

Mediation, Arbitration, and Litigation

Many construction contracts in Colorado include mandatory arbitration clauses, requiring disputes to be resolved outside of court. CDARA supports these clauses but ensures homeowners still have certain protections.

• Mediation: Encouraged as a cost-effective first step.
• Arbitration: Often binding, meaning the decision cannot be appealed.
• Litigation: If alternative methods fail, a lawsuit may still proceed.

Each option has pros and cons, which a knowledgeable construction defect attorney can explain in detail.

Why You Need a Denver Construction Defect Lawyer

CDARA is complex, and builders often have experienced legal teams defending their work. Trying to handle a claim alone can lead to missed deadlines, incomplete notices, or accepting inadequate repair offers.

A skilled Denver construction defect lawyer can:

• Evaluate whether your issue qualifies as a defect under Colorado law.
• Ensure compliance with CDARA’s strict notice and filing requirements.
• Coordinate inspections and expert evaluations.
• Negotiate with builders for repairs or compensation.
• Take your case to arbitration or court if necessary.

For HOAs, attorneys also provide guidance on board approvals, member communications, and collective recovery strategies.

Protecting Your Property Investment

For property owners, a home or building is often the most significant investment they will ever make. When construction defects threaten safety, comfort, or financial stability, Colorado’s CDARA process provides a pathway to seek relief.

The key is to act quickly and seek professional legal guidance. With Colorado’s short statutes of limitation and repose, waiting too long can eliminate your right to compensation.

Conclusion

The Colorado Construction Defect Action Reform Act (CDARA) governs how construction defect disputes are resolved across the state. While designed to balance the rights of property owners and builders, the law’s strict procedures and deadlines can be difficult to navigate.

If you suspect your home, condo, or commercial property suffers from construction defects, don’t wait. Speak with an experienced Denver construction defect lawyer to protect your rights, preserve your investment, and pursue the compensation you deserve.