Real Estate Construction Defects, Disputes, Breach of Contract & Negligence

Colorado’s housing market is hot. No wonder, Colorado is the second fastest-growing state in the U.S. and has the number one spot in the nation for the best economy (U.S. News and World Report). Housing inventory is at its lowest in decades.

 

Construction has taken over as the fastest-growing industry. Houses can’t be built fast enough to keep up with the influx of new homebuyers. The Millenials in particular, are buying most of the new homes as they move into the state. Millenials are generally first-time homebuyers with little experience in construction, realtors and brokers.  

 

When you decide to buy in a new development area, you’ll likely meet with someone representing the builder or developer. They will give you a stack of literature detailing what the new home will entail when construction is finished. You will probably be given a list of upgrades (at an extra cost) to choose from. Upgrades may include options such as having granite countertops instead of laminate, types of flooring, paint colors, appliances and light fixtures. There may even be size upgrades such as increasing an area like a deck. These upgrades will be part of the specifications. The specifications also provide the layout of the home, room sizes and materials.   

 

The next step is signing the contract the builder gives you. Before you sign, remember the contract will no doubt be written to favor and protect the builder, not you. Some builders may say the property was already inspected and will save you from paying those fees. Think about hiring your own licensed inspector and seriously consider hiring an experienced and qualified real estate attorney to review the contract before you sign. There are areas your attorney may add to the contract such as the contract is contingent upon a satisfactory completion of inspection and other modifications that may save you thousands of dollars later. Your home may be the biggest investment you make and the contract you’re signing is a binding contract.

 

Let’s say you didn’t have your own inspection done, and you didn’t hire a real estate attorney to review your contract. You find out the builder gave you a home that’s different or worse than what was promised in the contract. This would be a breach of the contract.   

 

What if you move into your new home and found flooding issues, a grading problem with the land, improper drainage, a foundation problem, a deck that isn’t the size you paid for, a construction defect or areas that need repairing. Do you have recourse?

 

Under Colorado law there is a three-year statute of limitations for breach of contract claims. There can be exceptions, especially if the homeowner had no way of discovering a construction defect within the three-year limitation. An example would be improperly installed windows that caused rot inside the walls. The homeowner couldn’t reasonably have known this would happen.

 

There may be negligent issues, which is an alternative legal theory to breach of contract. In this case, the builder complied with the contract, but due to a negligent construction defect, caused damage to the home. Examples would be faulty electrical wiring that caused a fire or a drainage issue destroying the foundation.

 

If you do see a problem with the construction, don’t wait. Colorado recently passed a Homeowner Protection Act.  Our Denver, Colorado real estate attorneys have vast experience with construction defects, breach of contract and disputes. We can efficiently review your issue to secure the best outcome for you.