Remember July 1st

Architects, engineers, contractors, subcontractors, builder-vendors and inspectors should mark their calendars for July 1, 1981. This is the date on which lawsuits against them for defects and deficiencies in their work which were or should have been discovered prior to July 1, 1979, can no longer be commenced.

This deadline was established by the Colorado legislature by a 1979 amendment to the statute of limitations relating to claims against design professionals and construction people.

That amendment overruled two previous Colorado Supreme Court decisions which had held that the former statute of limitations pertaining to construction design and work did not apply to claims by owners against parties with whom they had contracted who were responsible for construction-related deficiencies. Under those Supreme Court interpretations, only claims of third parties for injuries to persons or property were limited by a shorter two-year statute of limitations applicable to construction-related claims. Under those decisions, all other claims were governed by the longer six-year statute of limitations.

The legislative change is an effort to limit the time for suit or other legal proceedings on all construction-related claims to two years after discovery of the problem, but not more than ten years after the substantial completion of the construction project.

Without that particular change and for that period of time before the 1979 amendment, there were two different limitation periods. For example, if bricks fell off a building injuring a passerby, he had two years after the accident within which to sue the party at fault. However, the building owner may have had six years within which to sue the party at fault for the damages to his building.

Under the amended statute, both the passerby and the building owner must commence suit within two years after the incident or discovery of the

1 Section 13-80-127, C.R.S 1973 (1979 Cum. Supp.)

2 Tamblyn v. Mickey & Fox, Inc., 195 Colo.354,578 P.2d 641 (1978); Duncan v. Schuster Graham Homes, Inc., 194 Colo.441,548 P.2d 637 (1978).

E-59 deficiency. However, if the building was substantially completed more than ten years before the incident, the time limit would have expired for both.

There are other features of the amended statute which should be carefully consulted when dealing with the limitations question. For instance, if the accident or discovery occurred in the tenth year after substantial completion, another year to sue is added.i Also, the shorter construction statute of limitations cannot be claimed by an owner or tenant of the property who may be sued for a construction-related injury.

Those who may seek to avoid claims because of the expiration of the statutory deadline are not guaranteed relief. Several courts have ruled that similar types of special statutes of limitations are unconstitutional. 2

Parties sued on construction-related claims should have their attorneys carefully research the applicable statute of limitations law.

1 Update note: Since this column was originally published, the Colorado legislature has amended the limitation provision to provide that a suit may not be brought more than six years after substantial completion of the improvement to the real property. If the cause of action arises in the fifth or sixth year after substantial completion, then suit must be brought within two years after the cause of action arises. § 13-80-104, C.R.S.

2 Colorado’s statute has been held constitutional but those of other states have not. See the preceding Brief entitled “Statutes of Limitations: Constitutional in Colorado.”

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