Construction Litigation

The construction component of my legal practice involves representing both homeowners and construction professionals.

I generally represent homeowners who are in a dispute with a construction professional they hired, or have realized the work performed at their home is defective and was performed below the applicable standard of care.

My representation with construction professionals often involves analyzing their existing contracts and the adequacy of their existing insurance coverage.  Far too often I have seen contractors with an insurance exclusion that denies them coverage for common issues with their particular trade.  I also help contractors collect outstanding invoices, either from other contractors who hired them as subs or from the property owners who benefited from the work performed by filing mechanic’s liens.

Construction Litigation

F.A.Q.

What is the notice of claim process?

Colorado has a series of statutes that are applicable to construction defect actions.  They are known as the Construction Defect Action Reform Act or CDARA (CRS §§ 13-20-801, et seq.).

CDARA’s Notice of Claim process requires a residential claimant to provide written notice to a construction professional at least 75 days prior to filing suit for an alleged construction defect.  The Notice of Claim should identify the location and type of defect and be sent certified mail or personally served.  The construction professional then has 30 days from receipt of claimant’s Notice of Claim to request and complete an inspection of claimant’s property.  The construction professional then has another 30 days to make an offer of settlement.  If the offer of repair is not accepted or there is no response to the notice, the claimant may bring a construction defect action against the construction professional.

I think there are several things that can be done to help avoid problems when hiring a contractor for most residential construction projects.  First, speak with several contractors and get multiple bids for the same project.  The lowest bid may not be the right bid, but it will give you the opportunity to discuss how to approach the project from several points of view and get a better sense of what the project should cost.  I would also ask each contractor for several referrals from past projects and make the time to actually call the referral and discuss the work that was performed.  It also wise to discuss what licenses the contractor holds and in what jurisdictions, and follow up with who issued those licenses to make sure they are still valid.

Too many contractors simply provide a homeowner with a bid that contains the work to be performed and the amount to be paid.  This is insufficient.  At a minimum, there should be a written understanding of not just how much the job is going to cost, but when payment is to be made as well.  A third up front, a third halfway through completion, and a third upon completion is fairly common.  A draft schedule should be created as well.  Most contractors have several projects going on at the same time, which is fine, but a clear understanding as to the time spent at the project and when various stages of the project are to be completed could save a lot of grief down the road.  You should also discuss whether or not permits will be pulled and who will pay for them.  Permit requirements vary, but a good rule of thumb is if the project requires more than carpet or paint, a permit is probably required.  I also like to find out whether my contractor can provide me with proof of general liability insurance.

The theory behind mechanics’ liens (CRS §§ 38-22-101, et seq.).is that when real property, with consent of the owner, is improved by one supplying materials or labor and that person is not paid for the improvement, he or she could assert a lien on the property equal to the value of that improvement.  Thus, for example, if a subcontractor installs $50,000 worth a plumbing materials and labor to a house and is not paid for it, a lien could be filed for that amount.  Ultimately, if the lien is not satisfied, the lien can be foreclosed upon like a mortgage, the house sold, and the subcontractor paid from the proceeds.

Generally, if one provides materials, labor and materials, or is a principal contractor, the mechanics’ lien needs to be recorded with the county clerk and recorder office 4 months from the date labor or materials was last provided.  If just labor was provided, the deadline is shortened to 2 months.  Labor or materials provided that are trivial (like punch-list items), or correcting one’s own work, will not extend the deadline.

At least 10 days prior to recording a mechanics’ lien, a Statement of Intent to Lien must be served on the property owner and general contractor by personal service or certified mail.

Within 6 months from the date the project was completed or all materials and labor were provided, a lawsuit must be filed to foreclose on the lien and a lis pendens must be recorded as well.

Tell Michael About Your Case

Contact The Knauf Law Office now to get a Free Case Evaluation!