Soils Report Required for New Construction.
Colorado requires a developer to report the potential for expansive soil problems under certain circumstances. The statute requires a developer to provide the purchaser of a new residence with a “copy of a summary or report of the analysis and site recommendations” of the property at least 14 days before closing. In addition, for any site with potential expansive soil issues, the developer must provide “each buyer with a copy of a publication detailing the problems associated with such soils, the building methods to address these problems during construction, and suggestions for care and maintenance to address such problems.” Failure to provide the required materials subjects the developer to a civil penalty of $500.00.
Limitations on Construction Defects Claims.
Colorado construction claims generally are governed by a two year statute of limitations. This means a claim generally must be filed within two years after the claim for relief arises. A claim for relief arises when there is a “manifestation of a defect in the improvement [that] ultimately causes the injury” or is discoverable with the exercise of reasonable diligence. With some exceptions, the outside time limit for bringing a case against a construction professional is six years after the substantial completion of the improvement.
What is the Difference between Mediation and Arbitration?
Mediation and arbitration proceedings are both alternatives to litigation. Though both procedures employ a neutral third party, mediation is normally a non-binding procedure while arbitration is a binding procedure. Mediators do not judge the case but help facilitate a discussion and eventual resolution of the dispute. Arbitrators generally act similar to a judge and make decisions about evidence and give written opinions. Many Colorado courts are requiring mediation between parties prior to setting a case for trial.
Change In Colorado Adverse Possession Law
A land dispute between two neighbors in Boulder, Colorado made national headlines and prompted the state legislators to change Colorado’s adverse possession law. Under the new statute, a person claiming adverse possession must have a “good faith” belief that the person in possession of the property of the owner of record was the actual owner of the property and the belief was “reasonable” under the particular circumstances. Also included in the law is a provision that allows the judge to force adverse possessors to pay for the land awarded, and to compensate the original owners for back property taxes and interest.
Colorado Adopts Foreclosure Hotline
In response to recommendations from the Colorado Bar Association, Colorado has established a foreclosure hotline to assist homeowners facing foreclosure. The toll free number is 1-877-601-4673 and connects callers with local HUD approved housing counseling agencies to assist with working out a positive resolution to their mortgage delinquency or foreclosure.
IRS Allows Single Member Limited Liability Companies
A popular form of limited liability company in Colorado is the single member entity. The IRS has authorized the creation of single member limited liability companies. The individual member of the LLC may elect to report the income and expenses of the LLC on Schedule C of his or her individual tax return.
Carbon Monoxide Alarms Now Required in Colorado
Effective July 1, 2009, Sellers of existing single-family homes and multi-family dwelling units that have a fuel-fired heater system or appliance, a fireplace, or an attached garage, are required to have an operational carbon monoxide alarm within 15 feet of the entrance to each bedroom.
Trust Fund Statute May be Used in Construction Disputes
In Colorado, funds paid to a contractor must be held in trust for the payment of all subcontractors, laborers, and material suppliers who have furnished materials, services, or labor to the improvements constructed on the property. In the event a contractor uses the money paid to him for other purposes, the contractor can be held liable for theft of trust funds.
Renewable Energy Legislation Impacts Homeowners Associations
As a result of rising energy costs and increased attention to alternative energy sources, the Colorado legislature has enacted legislation that invalidates restrictions, covenants, and guidelines that effectively preclude the use of renewable energy generation devices, and energy efficiency devices. Homeowners associations are, however, permitted to enact reasonable restrictions on the dimensions, placement, and external appearance of the device, provided that such restrictions do not significantly increase the cost of the device or significantly decrease its performance.
