First Regular Session
Sixty-second General Assembly
LLS NO. 99-0420.01 Duane Gall SENATE BILL 99-036
STATE OF COLORADO
BY SENATOR Arnold;
also REPRESENTATIVE Mitchell.
BUSINESS AFFAIRS & LABOR
A BILL FOR AN ACT
101 CONCERNING RESIDENTIAL CONSTRUCTION IN AREAS WITH EXPANSIVE
102 SOILS.
Bill Summary
(Note: This summary applies to this bill as introduced and does
not necessarily reflect any amendments that may be subsequently
adopted.)
In existing provisions requiring homebuilders to provide potential
buyers with a soils analysis, requires disclosure of potential expansive
soil conditions both at the time of the contract and at closing. Specifies
the language of the disclosure and requires the engineer's report to be
accompanied by a one-page, "plain English" summary that includes the
options recommended by the engineer for construction of the foundation
and other structural elements and the degree of risk associated with each
option.
Requires the one-page summary to be recorded along with the
deed to the property. Increases the penalty for failure to provide all
required disclosures from $500 to $1,500 and applies the penalty in cases
of failure to record the one-page summary.
Requires a developer or builder to construct the foundation and
other structural elements of a new residence in accordance with the
engineer's recommendations as contained in the soils report. If the
engineer has recommended more than one option based on the degree of
risk the builder and buyer are willing to accept, requires the developer or
builder to disclose which of the options has been chosen and the degree
of risk associated with that option.
Creates a presumption that a developer or builder who complies
with all of the above requirements has not acted in a willful and wanton
fashion, thus creating a conditional exemption from an award of
exemplary (punitive) damages and potential liability under the
[ ] denotes HOUSE amendment. { } denotes SENATE amendment.
Capital letters indicate new material to be added to existing statute.
Dashes through the words indicate material to be deleted from existing statute.
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treble-damages provisions of the consumer protection act. States that the
presumption applies only to claims for structural damage resulting from
expansive soils.
1 Be it enacted by the General Assembly of the State of Colorado:
2 SECTION 1. 6-6.5-101, Colorado Revised Statutes, is amended
3 to read:
4 6-6.5-101. Disclosure to purchaser - penalty. (1) (a) At least
5 fourteen days prior to closing the sale of any new residence for human
6 habitation, every developer or builder or their representatives A
7 REPRESENTATIVE OF THE DEVELOPER OR BUILDER shall provide the
8 purchaser EACH BUYER with a copy of a summary report of the A SOILS
9 analysis PREPARED BY AN ENGINEER LICENSED UNDER SECTION 12-25-115,
10 C.R.S., and the site recommendations BASED UPON SUCH ANALYSIS. THE
11 DEVELOPER OR BUILDER SHALL KEEP THE ORIGINAL SOILS ANALYSIS
12 AVAILABLE FOR INSPECTION BY THE BUYER AT REASONABLE TIMES AND
13 UPON REASONABLE NOTICE.
14 (b) For sites in which significant potential for expansive soils is
15 recognized:
16 (I) The builder or his DEVELOPER, BUILDER, OR representative
17 shall supply each buyer with a copy of a publication detailing the
18 problems associated with such soils, the building methods to address
19 these problems during construction, and suggestions for care and
20 maintenance to address such problems; AND
21 (II) UPON EXECUTION OF THE CONTRACT OF PURCHASE AND SALE
22 AND AGAIN UPON CLOSING THE SALE, THE DEVELOPER, BUILDER, OR
23 REPRESENTATIVE SHALL SUPPLY EACH BUYER WITH THE FOLLOWING
24 DISCLOSURE STATEMENT, CONSPICUOUSLY PRINTED IN AT LEAST
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1 TEN-POINT, BOLD-FACED TYPE:
2 WARNING NOTICE: EXPANSIVE SOILS
3 THE HOME YOU ARE BUYING IS IN AN AREA OF EXPANSIVE SOILS.
4 [NAME OF BUILDER] WILL CONSTRUCT YOUR HOME IN ACCORDANCE
5 WITH THE RECOMMENDATIONS OF A LICENSED ENGINEER WHO HAS
6 EXAMINED THE SOIL CONDITIONS ON YOUR HOME SITE SO AS TO
7 MINIMIZE THE POSSIBILITY OF STRUCTURAL DAMAGE FROM EXPANSIVE
8 SOILS. YOU WILL RECEIVE A COPY OF THE ENGINEER'S REPORT,
9 TOGETHER WITH A PUBLICATION DETAILING THE PROBLEMS
10 ASSOCIATED WITH EXPANSIVE SOILS, THE BUILDING METHODS TO
11 ADDRESS THESE PROBLEMS DURING CONSTRUCTION, AND SUGGESTIONS
12 FOR CARE AND MAINTENANCE TO ADDRESS SUCH PROBLEMS.
13 IF YOU SO DESIRE, YOU ARE ENTITLED TO EXAMINE THE
14 COMPLETE, ORIGINAL SOILS ANALYSIS ON WHICH THE ENGINEER'S
15 REPORT IS BASED.
16 [NAME OF BUILDER] CANNOT BE RESPONSIBLE FOR DAMAGE TO
17 YOUR HOME THAT OCCURS AFTER YOU MOVE IN AND THAT IS CAUSED
18 BY IMPROPER LANDSCAPING OR GRADING OR ANY OTHER PROBLEM NOT
19 THE FAULT OF [NAME OF BUILDER]. IF THERE IS ANY PART OF THIS
20 NOTICE OR THE ENGINEER'S REPORT THAT YOU DO NOT UNDERSTAND,
21 CONSULT AN ATTORNEY BEFORE CLOSING THE SALE.
22 (c) THE ENGINEER'S REPORT PROVIDED TO THE BUYER PURSUANT
23 TO PARAGRAPH (a) OF THIS SUBSECTION (1) SHALL BE PREFACED BY A
24 ONE-PAGE SUMMARY, WRITTEN IN PLAIN ENGLISH, THAT INCLUDES THE
25 ENGINEER'S RECOMMENDATIONS FOR CONSTRUCTION OF THE FOUNDATION
26 AND OTHER STRUCTURAL ELEMENTS. IF THE ENGINEER RECOMMENDS
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1 ALTERNATIVE OPTIONS FOR CONSTRUCTION BASED ON THE DEGREE OF RISK
2 THE BUILDER AND BUYER ARE WILLING TO ACCEPT, THE SUMMARY SHALL
3 REFER TO THOSE OPTIONS AND THE DEGREE OF RISK ASSOCIATED WITH
4 EACH OPTION. A COPY OF THIS ONE-PAGE SUMMARY SHALL BE ATTACHED
5 TO AND RECORDED WITH THE DEED TO THE SUBJECT PROPERTY.
6 (2) In addition to any other liability or penalty, any builder or
7 developer failing to provide the A report, or DISCLOSURE STATEMENT, OR
8 OTHER publication required by subsection (1) of this section OR FAILING
9 TO RECORD THE ONE-PAGE SUMMARY REFERRED TO IN PARAGRAPH (c) OF
10 SAID SUBSECTION (1) shall be subject to a civil penalty of ONE THOUSAND
11 five hundred dollars payable to the purchaser.
12 (3) The requirements of this section shall not apply to any
13 individual constructing a residential structure for his SUCH INDIVIDUAL'S
14 own residence.
15 SECTION 2. Article 6.5 of title 6, Colorado Revised Statutes, is
16 amended BY THE ADDITION OF A NEW SECTION to read:
17 6-6.5-102. Structure shall conform - limitation on liability.
18 (1) EVERY DEVELOPER OR BUILDER SUBJECT TO SECTION 6-6.5-101 SHALL
19 CONSTRUCT THE FOUNDATION AND OTHER STRUCTURAL ELEMENTS OF
20 EVERY NEW RESIDENCE IN ACCORDANCE WITH THE ENGINEER'S
21 RECOMMENDATIONS AS CONTAINED IN THE REPORT REQUIRED BY SECTION
22 6-6.5-101 (1) (a). IF THE ENGINEER RECOMMENDS MORE THAN ONE OPTION
23 FOR CONSTRUCTION BASED ON THE DEGREE OF RISK THE BUILDER AND
24 BUYER ARE WILLING TO ACCEPT, THE DEVELOPER OR BUILDER SHALL
25 CONSTRUCT THE FOUNDATION AND OTHER STRUCTURAL ELEMENTS IN
26 ACCORDANCE WITH ONE OF THOSE OPTIONS AND SHALL DISCLOSE TO THE
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1 BUYER THE OPTION SELECTED AND THE DEGREE OF RISK ASSOCIATED WITH
2 THAT OPTION.
3 (2) A DEVELOPER OR BUILDER WHO COMPLIES WITH ALL
4 REQUIREMENTS OF SUBSECTION (1) OF THIS SECTION AND OF SECTION
5 6-6.5-101 SHALL BE PRESUMED NOT TO HAVE ENGAGED IN WILLFUL AND
6 WANTON CONDUCT, AS DEFINED IN SECTION 13-21-102 (1) (b), C.R.S., OR
7 TO HAVE ENGAGED IN A DECEPTIVE TRADE PRACTICE, AS DEFINED IN
8 SECTION 6-1-105 (1), IN CONNECTION WITH STRUCTURAL DAMAGE
9 RESULTING FROM EXPANSIVE SOILS. THIS PRESUMPTION APPLIES ONLY TO
10 CLAIMS BASED ON STRUCTURAL DAMAGE RESULTING, WHOLLY OR IN PART,
11 FROM THE EFFECTS OF EXPANSIVE SOILS.
12 (3) (a) A PLEADING IN A CIVIL ACTION ALLEGING STRUCTURAL
13 DAMAGE TO A RESIDENCE RESULTING, WHOLLY OR IN PART, FROM THE
14 EFFECTS OF EXPANSIVE SOILS SHALL NOT ALLEGE WILLFUL AND WANTON
15 CONDUCT, AS DEFINED IN SECTION 13-21-102 (1) (b), C.R.S., OR A
16 DECEPTIVE TRADE PRACTICE, AS DEFINED IN SECTION 6-1-105 (1), ON THE
17 PART OF A DEVELOPER OR BUILDER EXCEPT AS PROVIDED IN THIS
18 SUBSECTION (3).
19 (b) AT ANY TIME AFTER FILING, A PARTY MAY MOVE TO AMEND A
20 PLEADING TO ALLEGE THE MATTERS DESCRIBED IN PARAGRAPH (a) OF THIS
21 SUBSECTION (3). SUCH A MOTION MAY BE ACCOMPANIED BY SUPPORTING
22 AFFIDAVITS AND DOCUMENTATION. THE PARTY OPPOSING SUCH A MOTION
23 MAY SUBMIT OPPOSING AFFIDAVITS AND DOCUMENTATION.
24 (c) THE COURT SHALL DENY A MOTION UNDER PARAGRAPH (b) OF
25 THIS SUBSECTION (3) IF THE COURT DETERMINES THAT EITHER:
26 (I) THE MOVING PARTY HAS FAILED TO SET FORTH SPECIFIC FACTS,
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1 SUPPORTED BY ADMISSIBLE EVIDENCE, SUFFICIENT TO OVERCOME THE
2 PRESUMPTION STATED IN SUBSECTION (2) OF THIS SECTION; OR
3 (II) THE SUPPORTING AND OPPOSING AFFIDAVITS AND
4 DOCUMENTATION, TAKEN TOGETHER, DEMONSTRATE THAT, AFTER
5 ADMISSION OF ALL THE ADMISSIBLE EVIDENCE, THE COURT WOULD BE
6 REQUIRED TO DIRECT A VERDICT AGAINST THE MOVING PARTY ON THE
7 ISSUES DESCRIBED IN PARAGRAPH (a) OF THIS SUBSECTION (3).
8 SECTION 3. Safety clause. The general assembly hereby finds,
9 determines, and declares that this act is necessary for the immediate
10 preservation of the public peace, health, and safety.