Working in construction means you need to work through a complicated web of laws and regulations that affect every aspect of your projects. From breaking ground to final payment, Colorado’s construction laws shape how you operate your business and manage relationships with your clients, contractors, and suppliers.
Types of Construction Laws in Colorado
Several laws govern the construction industry in Colorado and they affect different aspects of your work. Whether you’re a general contractor, subcontractor, or property owner, these laws establish your rights and responsibilities throughout the construction process.
Colorado Construction Defect Law
The Construction Defect Action Reform Act (CDARA) has a huge impact on how construction projects operate in Colorado, and you’ll need to understand that before beginning any legal action.
Property owners must provide written notice of defects and give you a chance to inspect and repair the issues. This law was designed to reduce unnecessary litigation.
Colorado Construction Lien Law
Getting paid for your work is necessary when you’re a full-service general contractor, and construction lien laws are like a safety net. These laws give you the right to claim a lien against a property when you don’t receive payment, but timing is everything.
You’ll need to carefully track your deadlines because missing a notice requirement or filing deadline can completely invalidate your lien rights.
Colorado Construction Retainage Law
Money held back from payment can strain your income, which is why Colorado has specific rules about retainage. On public projects over $150,000, retainage is capped at 5% with no exceptions.
Private projects follow somewhat similar rules that protect contractors from excessive withholding, while still providing completion assurance to project owners.
Colorado Construction Warranty Law
Your warranty obligations depend on a lot of factors, including project type and contract terms. The law requires you to meet building codes and industry standards, and when defects are discovered, you have the right to inspect and attempt repairs.
Why It’s Important for Construction Professionals to Understand These Laws
When you understand the rules, you can structure your contracts better, protect your payment rights, and build stronger relationships with everyone involved in your projects. This can help you notice any possible issues before they become problems and give you confidence in making decisions about your business.
How to Avoid Any Legal Issues
Prevention beats damage control every time, and here’s what works:
- Write detailed contracts that spell out everyone’s responsibilities
- Keep a paper trail of all project communications and changes
- Stay on top of notice requirements and deadlines
- Document your work with photos and daily reports
- Address problems quickly when they come up
- Check your insurance coverage regularly
- Build solid relationships with your project partners
FAQs
How long is a contractor liable for work in Colorado?
You’re looking at a six-year statute of repose after substantial completion. But watch out, if defects show up in years 4-6, that period might stretch to eight years total.
What are the 5 elements of a construction contract?
Every good contract needs these basics — a clear scope of work, detailed payment terms, realistic timeline, procedures for changes, and a plan for handling disputes.
What is the construction trust statute in Colorado?
When you get paid for a project, that money is held in a trust for your subcontractors and suppliers. Using this money for other things isn’t just risky, but you could get in serious legal trouble.
Can you sue a construction company for taking too long?
Yes, you can sue if delays breach your contract or cause real damage. You should check carefully check your contract though because some delay provisions might limit what you can recover.
Final Thoughts
Construction laws can be overwhelming, but they are there to keep it fair for everyone involved in construction projects. Taking time to understand these laws now saves you headaches — and money — down the road.
Need help making sense of it all? Contact us today to work with our professional Project Development team.
