First Regular Session
Seventy-fifth General Assembly
STATE OF COLORADO
INTRODUCED
LLS NO. 25-0299.01 Jery Payne x2157
HOUSE BILL 25-1261
House Committees Senate Committees
Transportation, Housing & Local Government
A BILL FOR AN ACT
C
ONCERNING PROTECTIONS FOR HOMEOWNERS THAT RELATE TO101
IMPROVEMENTS TO REAL PROPERTY .102
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov
.)
In an action against a construction professional, section 2 of the
bill requires the construction professional to provide the claimant or the
claimant's legal representative with:
! Copies of all plans, specifications, soils reports, and
available engineering calculations;
! Any maintenance and preventive maintenance
HOUSE SPONSORSHIP
Bacon, Garcia, Mabrey, Titone, Velasco, Zokaie
SENATE SPONSORSHIP
Rodriguez and Winter F., Cutter, Gonzales J., Sullivan
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law. recommendations;
! The name, last-known address, and scope of work of each
construction professional that performed work or services;
and
! Copies of all insurance policies held by the construction
professional during the appropriate time.
The construction professional may charge reasonable copying costs for
the documents. Failure to provide the identifying information of the other
construction professionals bars the construction professional from
designating the unidentified construction professionals as nonparties at
fault in any subsequent action.
Section 3 requires a court to award prejudgement interest of 8%
to a prevailing claimant who alleges defects in a residential property
construction.
Section 5 voids a provision in a real estate contract that:
! Prohibits group lawsuits against a construction
professional; or
! Imposes different or additional requirements than the
statutory requirements to bring or join a legal action.
Section 6 changes the time when a claim of relief arises, for the
purposes of the statute of limitation and repose, to include both the
discovery of the physical manifestation and the cause of the defect.
Current law authorizes, subject to the requirements of the common
interest community's (community) declarations, a community to engage
in certain actions, such as instituting, defending, or intervening in
litigation or administrative proceedings on matters affecting the
community. Section 7 exempts an association's authority to institute,
defend, or intervene in litigation proceedings concerning construction
defects from the requirement that the action be subject to the declaration.
Section 8 requires the department of regulatory agencies to include
in its "SMART Act" report information concerning construction liability
insurance and the basis for rates.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. Legislative declaration. (1) The general assembly2
finds that:3
(a) Homeownership is the nexus of the American dream, and the4
purchase of a home represents one of the most significant investments an5
individual can make;6
(b) Buying a home is the biggest source of wealth building that7
HB25-1261-2- most people can make in their lifetime;1
(c) Homeowners should expect their new homes to be built2
correctly;3
(d) If a home is built with construction defects, builders should be4
responsible for correctly fixing the defects;5
(e) Colorado has some of the weakest protections in the country6
for homeowners facing construction defects;7
(f) Homeowners facing construction defects lack rights that8
Colorado consumers have for other purchases;9
(g) Colorado law disincentivizes timely repairs by builders and10
allows builders to run out the clock on the short window that homeowners11
have for legal action and to drag out claims that move forward;12
(h) Construction defects arising from the negligence of builders13
can result in costly repairs and diminished home property values and can14
cause undue financial hardship for homeowners and their families;15
(i) Repairs of construction defects should happen as quickly as16
possible;17
(j) Builders and developers are not required to carry construction18
liability insurance in Colorado, making it difficult for homeowners to19
hold them accountable for repairs; and20
(k) Builders and developers often put up barriers that go beyond21
what is required by law for homeowners to take legal action.22
(2) The general assembly declares that this act:23
(a) Seeks to protect the wealth building and equity that24
homeownership provides to Colorado families;25
(b) Is intended to align homeowners' consumer rights with the26
rights afforded consumers of other items purchased;27
HB25-1261
-3- (c) Promotes timely repairs of construction defects by builders;1
and2
(d) Ensures that Colorado law sets the requirements for3
homeowners to bring legal action for construction defects.4
SECTION 2. In Colorado Revised Statutes, 13-20-803.5, add5
(3.5) as follows:6
13-20-803.5. Notice of claim process. (3.5) (a) W
ITHIN THE7
EARLIER OF SIXTY DAYS AFTER A CONSTRUCTION PROFESSIONAL8
ACTUALLY RECEIVES A NOTICE OF CLAIM OR AFTER A CONSTRUCTION9
PROFESSIONAL OFFERS TO SETTLE A CLAIM , THE CONSTRUCTION10
PROFESSIONAL SHALL PROVIDE THE CLAIMANT OR THE CLAIMANT 'S LEGAL11
REPRESENTATIVE WITH THE FOLLOWING :12
(I) C
OPIES OF ALL PLANS, SPECIFICATIONS, SOILS REPORTS, AND13
AVAILABLE ENGINEERING CALCULATIONS RELATED TO THE CLAIMANT 'S14
PROPERTY;15
(II) A
NY MAINTENANCE AND PREVENTIVE MAINTENANCE16
RECOMMENDATIONS FOR THE PROPERTY ;17
(III) T
HE NAME, LAST-KNOWN ADDRESS, AND SCOPE OF WORK OF18
EACH CONSTRUCTION PROFESSIONAL THAT PERFORMED WORK OR SERVICES19
ON THE CLAIMANT'S PROPERTY; AND20
(IV) C
OPIES OF ALL INSURANCE POLICIES HELD BY THE21
CONSTRUCTION PROFESSIONAL FROM THE EARLIER START DATE OF :22
(A) T
HE DATE CONSTRUCTION OF THE IMPROVEMENT TO REAL23
PROPERTY WAS SUBSTANTIALLY COMPLETE THROUGH THE DATE OF THE24
NOTICE OF CLAIM; OR25
(B) T
HE DATE THE CONSTRUCTION PROFESSIONAL SUBSTANTIALLY26
COMPLETED ITS WORK ON THE IMPROVEMENT TO REAL PROPERTY27
HB25-1261
-4- THROUGH THE DATE OF THE NOTICE OF CLAIM .1
(b) T
HE CONSTRUCTION PROFESSIONAL MAY CHARGE REAS ONABLE2
COPYING COSTS FOR THE DOCUMENTS DESCRIBED IN SUBSECTIONS3
(3.5)(a)(I), (3.5)(a)(II),
AND (3.5)(a)(IV) OF THIS SECTION.4
(c) F
AILURE TO PROVIDE THE IDENTIFYING INFORMATION5
REQUIRED IN SUBSECTION (3.5)(a)(III) OF THIS SECTION BARS THE6
CONSTRUCTION PROFESSIONAL FROM DESIGNATING THE UNIDENTIFIED7
CONSTRUCTION PROFESSIONALS AS NONPARTIES AT FAULT UNDER SECTION8
13-21-111.5 (3)(b)
IN ANY SUBSEQUENT ACTION.9
SECTION 3. In Colorado Revised Statutes, 13-20-806, add (8)10
as follows:11
13-20-806. Limitation of damages. (8) (a) W
ITH REGARD TO12
CLAIMS ARISING FROM ALLEGED DEFECTS IN RESIDENTIAL PROPERTY13
CONSTRUCTION, A COURT SHALL AWARD PREJUDGMENT INTEREST TO A14
CLAIMANT WHO PREVAILS WITH THE CLAIM . THE AMOUNT OF THE15
AWARDED PREJUDGEMENT INTEREST IS :16
(I) A
DDED TO THE AMOUNT OF THE ACTUAL DAMAGES AT A RATE17
OF EIGHT PERCENT PER YEAR; AND18
(II) C
OMPOUNDED ANNUALLY BEGINNING ON THE DATE OF THE19
MAILING OF THE CLAIMANT 'S FIRST NOTICE OF CLAIM SENT IN20
ACCORDANCE WITH SECTION 13-20-803.5.21
(b) N
OTWITHSTANDING SUBSECTION (8)(a) OF THIS SECTION,22
PREJUDGMENT INTEREST DOES NOT ACCRUE :23
(I) A
FTER THE DATE A STATUTORY SETTLEMENT OFFER IS MADE24
PURSUANT TO SECTION 13-20-803.5 (3) IF THE STATUTORY SETTLEMENT25
OFFER EXCEEDS THE AMOUNT OF THE JUDGMENT ; OR26
(II) O
N THE PART OF ANY ACTUAL DAMAGES AWARDED FOR27
HB25-1261
-5- AMOUNTS ACTUALLY SPENT BEFORE JUDGMENT AND FOR WHICH INTEREST1
UNDER SECTION 5-12-102 (1)(b) IS AWARDED.2
(c) P
OSTJUDGMENT INTEREST ACCRUES ON THE JUDGMENT AS3
PROVIDED BY LAW.4
SECTION 4. In Colorado Revised Statutes, 38-33.3-303.5,5
amend (1)(d)(I)(A) as follows:6
38-33.3-303.5. Construction defect actions - disclosure -7
approval by unit owners - definitions - exemptions. (1) (d) Approval8
by unit owners - procedures. (I) (A) Notwithstanding any provision of9
law or any requirement in the governing documents, the executive board10
may
SHALL HAVE THE RIGHT TO initiate the construction defect action only11
if authorized within the voting period by owners of units to which a12
majority of votes in the association are allocated. Such THE approval is13
not required for an association to proceed with a construction defect14
action if the alleged construction defect pertains to a facility that is15
intended and used for nonresidential purposes and if the cost to repair the16
alleged defect does not exceed fifty thousand dollars. Such THE approval17
is not required for an association to proceed with a construction defect18
action when the association is the contracting party for the performance19
of labor or purchase of services or materials.20
SECTION 5. In Colorado Revised Statutes, add 13-20-809 as21
follows:22
13-20-809. Void provisions concerning actions - definition.23
(1) A
S USED IN THIS SECTION, UNLESS THE CONTEXT OTHERWISE24
REQUIRES, "DECLARATION" HAS THE MEANING SET FORTH IN SECTION25
38-33.3-103
(13).26
(2) A
PROVISION IN A CONTRACT TO SELL REAL ESTATE IN A27
HB25-1261
-6- DECLARATION OR IN A GOVERNING DOCUMENT IS VOID IF :1
(a) T
HE PROVISION LIMITS A PROPERTY OWNER 'S RIGHT TO BRING2
OR JOIN AN ACTION WITH ONE OR MORE CLAIMANTS AGAINST A3
CONSTRUCTION PROFESSIONAL ; OR4
(b) T
HE PROVISION IMPOSES DIFFERENT OR ADDITIONAL5
REQUIREMENTS THAN THE REQUIREMENTS IN THIS PART 8 OR SECTION6
38-33.3-303.5
THAT ARE NECESSARY TO BRING OR JOIN AN ACTION .7
SECTION 6. In Colorado Revised Statutes, 13-80-104, amend8
(1)(b)(I) as follows:9
13-80-104. Limitation of actions against architects,10
contractors, builders or builder vendors, engineers, inspectors, and11
others. (1) (b) (I) Except as otherwise provided in subparagraph (II) of
12
this paragraph (b) SUBSECTION (1)(b)(II) OF THIS SECTION, a claim for13
relief arises under this section at the time the claimant or the claimant's14
predecessor in interest discovers or in the exercise of reasonable diligence15
should have discovered
BOTH OF THE FOLLOWING CONCERNING THE16
DEFECT IN THE IMPROVEMENT THAT ULTIMATELY CAUSES THE INJURY :17
(A) The physical manifestations of a
THE defect; in the18
improvement which ultimately causes the injury. AND19
(B) T
HE CAUSE OF THE DEFECT.20
SECTION 7. In Colorado Revised Statutes, 38-33.3-302, amend21
(1)(d) as follows:22
38-33.3-302. Powers of unit owners' association. (1) Except as23
provided in subsections (2) and (3) of this section, and subject to the24
provisions of the declaration, the association, without specific25
authorization in the declaration, may:26
(d) Institute, defend, or intervene in litigation or administrative27
HB25-1261
-7- proceedings in its own name on behalf of itself or two or more unit1
owners on matters affecting the common interest community. W
ITH2
REGARD TO INSTITUTING, DEFENDING, OR INTERVENING IN LITIGATION3
PROCEEDINGS CONCERNING CONSTRUCTION DEFECTS , THE ASSOCIATION IS4
NOT SUBJECT TO THE PROVISIONS OF THE DECLARATION .5
SECTION 8. In Colorado Revised Statutes, add 24-34-113 as6
follows:7
24-34-113. SMART Act reporting on homeowner's insurance.8
(1) B
EGINNING JANUARY 1, 2026, AND IN JANUARY EVERY YEAR9
THEREAFTER, THE DEPARTMENT OF REGULATORY AGENCIES SHALL10
INCLUDE, AS PART OF ITS PRESENTATION DURING ITS "SMART ACT"11
HEARING REQUIRED BY SECTION 2-7-203, INFORMATION CONCERNING:12
(a) T
HE REQUIREMENTS OF THE TYPE AND TERMS OF INSURANCE13
THAT A CONSTRUCTION PROFESSIONAL IS REQUIRED TO CARRY TO COVER14
PROFESSIONAL SERVICES;15
(b) A
DETAILED LISTING OF THE INSURERS THAT OFFER16
RESIDENTIAL CONSTRUCTION LIABILITY INSURANCE POLICIES TO17
CONSTRUCTION PROFESSIONALS , INCLUDING RESIDENTIAL PROPERTY18
DEVELOPERS, TO COVER PROFESSIONAL SERVICES;19
(c) T
HE RATES THAT INSURERS, AS DEFINED IN SECTION 10-1-10220
(13),
CHARGE TO CONSTRUCTION PROFESSIONALS TO COVER PROFESSIONAL21
SERVICES;22
(d) A
DETAILED ANALYSIS OF THE BASIS OF THE RATES, DESCRIBED23
IN SUBSECTION (1)(c) OF THIS SECTION, INCLUDING THE RISK FACTORS,24
CLASSIFICATIONS, AND COVERAGE DESCRIPTIONS USED TO SET THE RATES ;25
(e) T
HE TERMS OF COVERAGE IN EACH INSURER 'S CONSTRUCTION26
LIABILITY POLICIES;27
HB25-1261
-8- (f) THE LIMITATIONS ON OR EXCLUSIONS FROM COVERAGE THAT1
EXIST IN EACH INSURER 'S CONSTRUCTION LIABILITY POLICIES FOR2
CONSTRUCTION PROJECTS, INCLUDING MULTIFAMILY PROJECTS; AND3
(g) A
DESCRIPTION OF THE ROLE OF THE DIVISION OF INSURANCE4
OVER RESIDENTIAL CONSTRUCTION LIABILITY INSURANCE .5
SECTION 9. Act subject to petition - effective date -6
applicability. (1) This act takes effect at 12:01 a.m. on the day following7
the expiration of the ninety-day period after final adjournment of the8
general assembly; except that, if a referendum petition is filed pursuant9
to section 1 (3) of article V of the state constitution against this act or an10
item, section, or part of this act within such period, then the act, item,11
section, or part will not take effect unless approved by the people at the12
general election to be held in November 2026 and, in such case, will take13
effect on the date of the official declaration of the vote thereon by the14
governor.15
(2) This act applies to causes of action arising on or after the16
applicable effective date of this act.17
HB25-1261
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