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Second Regular Session

Sixty-first General Assembly

LLS NO. 98­0683.01 BJA SENATE BILL 98­147

STATE OF COLORADO

BY SENATOR Powers;

also REPRESENTATIVE McElhany.

REENGROSSED

BUSINESS AFFAIRS & LABOR

A BILL FOR AN ACT

CONCERNING THE ESTABLISHMENT OF A PROCESS THAT A BUILDER AND HOMEOWNER FOLLOW BEFORE THE HOMEOWNER FILES A CIVIL ACTION AGAINST THE BUILDER TO RECOVER FOR DAMAGES TO THE HOMEOWNER'S RESIDENCE.

Bill Summary

(Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments that may be subsequently adopted.)

Requires a homeowner to notify a builder in writing of any complaint or disagreement the homeowner has against the builder relating to a construction matter before filing any civil action to recover damages. Requires the builder to provide the homeowner with a written repair plan, a written offer to otherwise settle the complaint or disagreement, or a written notice that the builder will not make any repairs or otherwise offer to settle the homeowner's complaint within a specified time period.

Requires the homeowner to provide the builder and the builder's contractors or other agents reasonable access to the residence so that the builder can inspect, repair, and conduct tests necessary to verify the homeowner's complaint. Requires the homeowner to provide the builder and the builder's contractors or other agents reasonable access to carry out the repairs specified in a written repair plan if the parties have agreed to such plan.

Provides that contracts between homeowners and builders that provide different remedies are not affected by this act.

Be it enacted by the General Assembly of the State of Colorado:

SECTION 1.  Article 20 of title 13, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW PART to read:

PART 8

RIGHT TO REMEDY RESIDENTIAL

CONSTRUCTION MATTERS

13­20­801.  Legislative declaration. (1)  THE GENERAL ASSEMBLY HEREBY FINDS, DETERMINES, AND DECLARES THAT:

(a)  A HOMEOWNER OF A NEW RESIDENCE THAT WAS CONSTRUCTED, SOLD, OR REPAIRED BY A BUILDER OR A HOMEOWNER OF AN EXISTING RESIDENCE THAT WAS REPAIRED OR OTHERWISE ALTERED BY A BUILDER MAY HAVE LEGITIMATE COMPLAINTS OR DISAGREEMENTS RELATING TO THE CONSTRUCTION, REPAIR, OR OTHER ALTERATION OF THE HOMEOWNER'S RESIDENCE;

(b)  A BUILDER WHO CONSTRUCTS, SELLS, OR REPAIRS A NEW RESIDENCE OR A BUILDER WHO REPAIRS OR OTHERWISE ALTERS AN EXISTING RESIDENCE IS NOT ALWAYS GIVEN AN OPPORTUNITY TO ADDRESS OR CORRECT THE HOMEOWNER'S CONCERNS RELATED TO THE CONSTRUCTION, REPAIR, OR OTHER ALTERATION OF THE RESIDENCE BEFORE THE HOMEOWNER TAKES LEGAL ACTION AGAINST THE BUILDER; AND

(c)  A HOMEOWNER OF A RESIDENCE AND THE BUILDER WHO CONSTRUCTED, SOLD, REPAIRED, OR OTHERWISE ALTERED THAT HOMEOWNER'S RESIDENCE SHOULD BE GIVEN EVERY OPPORTUNITY TO RESOLVE THE HOMEOWNER'S COMPLAINTS OR DISAGREEMENTS RELATING TO THE CONSTRUCTION, REPAIR, OR OTHER ALTERATION OF THE RESIDENCE BEFORE RESORTING TO THE LEGAL SYSTEM.

(2)  THE GENERAL ASSEMBLY FURTHER FINDS AND DECLARES IT IS THE PURPOSE OF THIS PART 8 TO PROVIDE A HOMEOWNER OF A RESIDENCE AND THE BUILDER WHO CONSTRUCTED, REPAIRED, OR OTHERWISE ALTERED THE HOMEOWNER'S RESIDENCE A PERIOD OF TIME IN WHICH THE PARTIES CAN WORK TO RESOLVE ANY DISAGREEMENTS OR COMPLAINTS RELATING TO SUCH CONSTRUCTION, REPAIR, OR OTHER ALTERATION BEFORE THE HOMEOWNER FILES A LEGAL ACTION.

13­20­802.  Definitions.  AS USED IN THIS PART 8, UNLESS THE CONTEXT OTHERWISE REQUIRES:

(1) (a)  "BUILDER" MEANS A PERSON WHO CONTRACTS WITH A HOMEOWNER FOR:

(I)  THE CONSTRUCTION OR SALE OF A NEW RESIDENCE CONSTRUCTED BY THAT PERSON;

(II)  THE ADDITION TO OR ALTERATION OF AN EXISTING RESIDENCE BY THAT PERSON; OR

(III)  THE REPAIR OF A NEW OR EXISTING RESIDENCE BY THAT PERSON.

(b)  "BUILDER" DOES NOT INCLUDE A PERSON THAT SELLS HOME WARRANTY INSURANCE.

(2)  "CONSTRUCTION MATTER" MEANS A MATTER CONCERNING THE DESIGN, CONSTRUCTION, OR REPAIR OF A NEW RESIDENCE OR THE ALTERATION OF, ADDITION TO, OR REPAIR OF AN EXISTING RESIDENCE. "CONSTRUCTION MATTER" INCLUDES ANY PHYSICAL DAMAGE TO THE RESIDENCE OR THE REAL PROPERTY UNDERLYING THE RESIDENCE IF SUCH DAMAGE IS PROXIMATELY CAUSED BY THE CONSTRUCTION, ALTERATION OF, ADDITION TO, OR REPAIR OF THE RESIDENCE.

(3)  "HOMEOWNER" MEANS THE PERSON WHO CONTRACTS WITH A BUILDER FOR:

(a)  THE CONSTRUCTION OR SALE OF A NEW RESIDENCE CONSTRUCTED BY THE BUILDER;

(b)  THE ADDITION TO OR ALTERATION OF AN EXISTING RESIDENCE BY THE BUILDER; OR

(c)  THE REPAIR OF A NEW OR EXISTING RESIDENCE BY THE BUILDER.

(4)  "RESIDENCE" MEANS A SINGLE­FAMILY HOUSE, DUPLEX, TRIPLEX, QUADRAPLEX, OR A UNIT IN A MULTIUNIT RESIDENTIAL STRUCTURE IN WHICH THE TITLE TO EACH INDIVIDUAL UNIT IS TRANSFERRED TO THE OWNER UNDER A CONDOMINIUM OR COOPERATIVE SYSTEM.

13­20­803.  Notice ­ builder's right to remedy. (1)  AT LEAST FORTY­FIVE DAYS BEFORE FILING ANY CIVIL ACTION TO RECOVER DAMAGES FROM A BUILDER RELATING TO A CONSTRUCTION MATTER, THE HOMEOWNER SHALL NOTIFY THE BUILDER IN WRITING OF ANY COMPLAINT OR DISAGREEMENT THE HOMEOWNER HAS AGAINST THE BUILDER RELATING TO SUCH CONSTRUCTION MATTER. THE NOTICE SHALL DESCRIBE THE COMPLAINT OR DISAGREEMENT IN REASONABLE DETAIL. THE HOMEOWNER SHALL DELIVER THE NOTICE BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE BUILDER'S LAST­KNOWN ADDRESS.

(2)  WITHIN THIRTY DAYS AFTER RECEIVING THE HOMEOWNER'S WRITTEN NOTICE, THE BUILDER SHALL DELIVER TO THE HOMEOWNER BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED:

(a)  A WRITTEN REPAIR PLAN, INCLUDING A TIMELINE FOR COMPLETING THE NECESSARY REPAIRS;

(b)  A WRITTEN OFFER TO OTHERWISE SETTLE AND SATISFY THE HOMEOWNER'S COMPLAINT AGAINST OR DISAGREEMENT WITH THE BUILDER; OR

(c)  A WRITTEN NOTICE THAT THE BUILDER DISAGREES WITH THE HOMEOWNER AND WILL NOT MAKE ANY REPAIRS OR ANY OFFER TO OTHERWISE SETTLE THE HOMEOWNER'S COMPLAINT AGAINST OR DISAGREEMENT WITH THE BUILDER.

(3)  THE HOMEOWNER MAY REJECT A WRITTEN REPAIR PLAN OR WRITTEN OFFER TO OTHERWISE SETTLE AND SATISFY THE HOMEOWNER'S COMPLAINT AGAINST OR DISAGREEMENT WITH THE BUILDER IF THE HOMEOWNER BELIEVES THAT SUCH PLAN OR OFFER WILL NOT SETTLE AND SATISFY THE HOMEOWNER'S COMPLAINT OR DISAGREEMENT. IF THE HOMEOWNER REJECTS THE BUILDER'S WRITTEN PLAN OR WRITTEN OFFER, THE HOMEOWNER SHALL NOTIFY THE BUILDER IN WRITING BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE BUILDER'S LAST­KNOWN ADDRESS. NOTWITHSTANDING SUBSECTION (1) OF THIS SECTION, IF THE HOMEOWNER PROVIDES WRITTEN NOTIFICATION IN ACCORDANCE WITH THIS SUBSECTION (3), THE HOMEOWNER MAY FILE A CIVIL ACTION TO RECOVER DAMAGES FROM A BUILDER RELATING TO A CONSTRUCTION MATTER WITHOUT PROVIDING FURTHER NOTIFICATION OR OTHERWISE COMPLYING WITH SUBSECTION (1) OF THIS SECTION.

(4)  IF THE BUILDER DELIVERS TO THE HOMEOWNER A WRITTEN NOTICE BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE HOMEOWNER=S ADDRESS THAT THE BUILDER DISAGREES WITH THE HOMEOWNER AND WILL NOT MAKE ANY REPAIRS OR OFFER TO OTHERWISE SETTLE THE HOMEOWNER'S COMPLAINT AGAINST OR DISAGREEMENT WITH THE BUILDER, THE HOMEOWNER MAY FILE A CIVIL ACTION TO RECOVER DAMAGES FROM A BUILDER RELATING TO A CONSTRUCTION MATTER WITHOUT PROVIDING FURTHER NOTIFICATION OR OTHERWISE COMPLYING WITH SUBSECTION (1) OF THIS SECTION.

(5)  DURING THE THIRTY­DAY PERIOD AFTER THE BUILDER RECEIVES THE HOMEOWNER'S WRITTEN NOTIFICATION, THE HOMEOWNER SHALL PROVIDE THE BUILDER AND THE BUILDER'S CONTRACTORS OR OTHER AGENTS REASONABLE ACCESS TO THE RESIDENCE, DURING NORMAL WORKING HOURS, TO INSPECT, REPAIR, AND CONDUCT TESTS THAT THE BUILDER AND THE HOMEOWNER DETERMINE ARE NECESSARY TO VERIFY THE HOMEOWNER'S COMPLAINT AGAINST OR DISAGREEMENT WITH THE BUILDER. IF THE BUILDER PROVIDES THE HOMEOWNER WITH A WRITTEN PLAN FOR COMPLETING ANY NECESSARY REPAIRS AND THE BUILDER AND THE HOMEOWNER HAVE AGREED THAT THE WRITTEN REPAIR PLAN WILL SATISFY THE HOMEOWNER'S COMPLAINT AGAINST OR DISAGREEMENT WITH THE BUILDER, THE HOMEOWNER SHALL PROVIDE THE BUILDER AND THE BUILDER'S CONTRACTORS OR OTHER AGENTS REASONABLE ACCESS TO THE RESIDENCE, DURING NORMAL WORKING HOURS, TO CARRY OUT THE REPAIRS SPECIFIED IN THE WRITTEN REPAIR PLAN.

(6)  IF THE SAME COMPLAINT OR DISAGREEMENT BY THE HOMEOWNER HAS BEEN SUBJECT TO THE REQUIREMENTS OF THIS SECTION MORE THAN THREE TIMES, THE HOMEOWNER MAY FILE A CIVIL ACTION TO RECOVER DAMAGES FROM A BUILDER RELATING TO A CONSTRUCTION MATTER WITHOUT PROVIDING FURTHER NOTIFICATION OR OTHERWISE COMPLYING WITH SUBSECTION (1) OF THIS SECTION.

(7)  THIS SECTION SHALL APPLY ONLY IF THE HOMEOWNER IS OR BECOMES THE OWNER OF THE RESIDENCE AND THE CONSTRUCTION, ADDITION, ALTERATION, OR REPAIR IS COMPLETE. 13­20­804.  Actions and contracts not affected.  THIS PART 8 SHALL NOT APPLY TO OR AFFECT ANY CONTRACT BETWEEN THE HOMEOWNER AND THE BUILDER THAT PROVIDES A REMEDY DIFFERENT THAN THIS PART 8. SO LONG AS THE HOMEOWNER HAS COMPLIED WITH THE PROCEDURES OF THIS PART 8 THEN THIS PART 8 SHALL NOT AFFECT OR IMPAIR THE CERTIFICATION OF ANY CLASS ACTION NOR SHALL THIS SECTION BE CONSIDERED BY A COURT IN ANY CIVIL ACTION IN DETERMINING WHETHER THE CERTIFICATION OF A CLASS ACTION IS PROPER. THE HOMEOWNER WILL HAVE 90 DAYS TO COMPLY WITH THIS SECTION BEFORE THEY CAN BE DECERTIFIED FROM ANY CLASS ACTION OR A CIVIL ACTION IN DETERMINING WHETHER THE CERTIFICATION OF A CLASS ACTION IS PROPER. IF AN OWNER FILES A CIVIL ACTION AND COUNSEL FAILS TO COMPLY WITH THE NOTICE REQUIREMENT OF THIS PART 8, THEN THE OWNER SHOULD BE GIVEN AN OPPORTUNITY TO SEND SUCH NOTICE UPON NOTIFICATION BY THE COURT WITHIN 90 DAYS OF SUCH NOTIFICATION AND THE CIVIL ACTION SHOULD BE STAYED PENDING COMPLIANCE WITH THIS SECTION.

13­20­805.  Statute of limitations.  NOTWITHSTANDING THE PROVISIONS IN ARTICLE 80 OF THIS TITLE OR ANY OTHER PROVISION OF LAW TO THE CONTRARY, IF THE TIME LIMITATIONS WITHIN WHICH A HOMEOWNER IS REQUIRED TO BRING A CIVIL ACTION OR CAUSE OF ACTION AGAINST A BUILDER CONCERNING A CONSTRUCTION MATTER WOULD OTHERWISE EXPIRE ON OR BEFORE SIXTY DAYS AFTER THE HOMEOWNER SENDS NOTICE TO THE BUILDER IN ACCORDANCE WITH SECTION 13­20­803 (1), SUCH TIME LIMITATIONS SHALL BE TOLLED FOR SIXTY DAYS, BEGINNING ON THE DATE THE HOMEOWNER SENT NOTICE TO THE BUILDER IN ACCORDANCE WITH SECTION 13­20­803 (1).

SECTION 2.  Effective date ­ applicability.  This act shall take effect upon passage and shall apply to civil actions that arise or are filed on or after said date.