A Bellwether of Construction Risk
What do those in insurance industry think of a bill to expand time for defects lawsuits?

by Julia Cardi

A bill to change construction defects law favorably for property owners has stayed parked on the Colorado Senate’s second readings calendar for several weeks. An overall expansion of property owners’ ability to bring defects claims, Senate Bill 138 has players in the construction industry worried about increased exposure to litigation raising costs of construction and making Colorado’s affordable housing crisis worse.

Sponsor Sen. Robert Rodriguez said there’s not currently a set date for when the full Senate will actually vote. He was coy about the likelihood the bill may get pulled and brought back in a later session.

“I haven’t spoken with all my colleagues to see [what] they’re O.K. with and not O.K. with,” he said. Rodriguez added targeting the small proportion of bad actors in the construction industry is a key concern among stakeholders.

Senate Bill 138 extends the time period after a construction project is completed that a property owner has to file a claim for construction defects, called the statute of repose, from six to 10 years. It also changes when the separate statute of limitations to file a claim starts running. Currently, a property owner has two years from when they discover a problem, or reasonably should have discovered it. The bill changes that trigger to start the two years running when a property owner discovers the source of the problem — in other words, knows it’s due to a construction defect and not normal wear and tear on the property.

Senate Bill 138 also clarifies both the statute of repose and statute of limitations are subject to statutory and equitable tolling.

Opinions about whether the bill will harm the construction industry have split with property owners and plaintiffs’ lawyers who represent them on one side, and those in the construction industry and defense attorneys on the other.

To read this and other complete articles featured in the March 9, 2020 print edition of Law Week Colorado, copies are available for purchase online.