In the competitive Greater Denver real estate market, a building is more than just a structure; it is a high-stakes investment subject to some of the most challenging environmental conditions in the country. Deficiencies in the design, materials, or workmanship of a construction project can lead to significant financial, operational, and safety issues. For property owners and developers in Denver, understanding the nuances of construction defect work is not just a matter of maintenance; it is a critical strategy for asset protection. Here’s what you need to know:
What is Considered a Construction Defect?
Construction defects are defined as any construction deficiency that can manifest and potentially lead to a building’s failure, either as a financial, operational, or safety failure.
What are Some of the More Typical Construction Defects We See?
Construction defects generally fall into three primary categories, each requiring a different level of technical intervention.
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- Functional (Systems) Defects: Functional Defects are actually the most common defect we see. When a building’s essential systems fail to perform, we categorize it as a ‘functional (systems) defect. This includes “building envelope” failures—such as improper flashing or waterproofing—that lead to toxic mold and water intrusion. It also covers faulty mechanical, electrical, or plumbing (MEP) systems that fail to meet occupancy standards.
- Structural Defects: Often the most severe, structural defects involve the skeleton or foundation of the building. In Colorado, foundation cracks can happen from expansive soils, shifting, or settlement. Of course, issues with load-bearing walls, roofing systems, or floor joists can compromise the entire integrity of the structure as well.
- Aesthetic (Latent) Defects: While often dismissed as “cosmetic,” aesthetic defects like cracking stucco, uneven flooring, or poor finishes can be indicators of deeper structural movement or poor craftsmanship that devalues the property.
What is the Construction Defect Action Reform Act (CDARA)?
In Colorado, the Construction Defect Action Reform Act (CDARA) governs how construction disputes are handled. Enacted in 2001, this cornerstone construction law in the state of Colorado has been amended in 2024 and 2025. Here is a direct link to the 2024/2025 PDF of the entire Courts and Court Procedure title. Full Title 13 PDF (Colorado.gov) You can scroll or search for “13-20-801” to find the start of CDARA, which begins on page 257 in this document.
What are some key aspects of the Construction Defect Action Reform Act (CDRA) that property owners and managers should understand?
Property owners must understand their “Right to Repair” statutes, which often require giving the original contractor notice and an opportunity to fix the issue before litigation can commence. Conversely, developers and contractors must be diligent in their documentation to defend against meritless claims. Here are some details to consider:
Construction Defect Action Reform Act (CDARA) – Timelines, Limitations vs. Repose
The CDARA has strict timelines on when you can file a claim and if you don’t adhere to the timeline, recovering damages can be nearly impossible. While the CDARA has been around since 2001, the timelines have undergone significant changes since 2024 and some rules like the “Colorado Dream Act” are effective as of January 1, 2026.
- Statute of Limitations is 2 years – The moment you discover or should have discovered the physical manifestation of a defect, you have two years from that point to initiate the process.
- Statute of Repose is 6 to 8 years – Regardless of when a construction defect is discovered, you generally cannot sue more than six years after the project’s substantial completion. There is something called an ‘Extension Rule’ which is that if a defect is discovered in the fifth or sixth year, the CDARA allows a 2-year extension, hence the possibility of the Statute of Repose limit reaching 8 years.
Construction Defect Action Reform Act (CDARA) – Notice of Claim (NOC) Process
In order to file a lawsuit for a construction defect, the CDARA mandates a process called “Right to Repair” that follows the below sequence of steps:
- Notice Sent – For Residential property, at least 75 days before filing suit. For commercial property, at least 90 days before filing suit. This is provided via certified letter describing the construction defects in ‘reasonable detail’.
- Inspection – For Residential property, contractor has 30 days to inspect. For commercial property, contractor has 45 days to inspect. Reasonable access to the property must be allowed in order for contractors and experts to investigate.
- The Offer – For Residential property, within 30 days of inspection. For commercial property, within 45 days of inspection. The contractor can offer to repair the defect, pay a monetary settlement, or deny the claim entirely. The acceptance or rejection of an offer is due 15 days after the offer is made.
How does a reconstruction contractor help with construction defect matters?
Reconstruction contractors fix the root cause of a construction defect, and don’t simply repair damage. Fixing the root cause of construction defects is often referred to as ‘reconstruction’.
Unlike general contractors who only focus on “new” builds, reconstruction contractors specialize in construction that solves the root cause of a construction defect and employs a process that fixes it permanently, documents everything, eliminates surprises, protects occupants, and reduces exposure. When a construction defect is identified, the right reconstruction contractor will fix the cause, not just the damage, and protect the long-term integrity of the building.