What Are Typical Construction Disputes In Colorado?

Posted April 14, 2023 in Uncategorized

Rarely is there a construction project in Colorado where a dispute does not arise. Disagreements are one thing, but when those disagreements pose a risk to the project itself, that’s another thing entirely. Thousands if not millions of dollars could be at stake. Delay, increased costs, and damage to the reputation of the parties involved is also at stake.

At Volpe Law, our construction lawyers handle a wide variety of legal matters involving development and construction. We help our clients understand the different types of construction disputes so that, together, we can first help prevent them from occurring, and if they do occur, we will seek to resolve the dispute quickly and efficiently. Contact us at 303-268-2867 today to schedule a consultation.

TYPES OF CONSTRUCTION DISPUTES IN COLORADO

Whether it is a multi-million-dollar commercial project, a public project, a residential project, or a home remodel, disputes can happen. When they do, you want to be prepared. Here is a brief outline of common types of construction disputes you might anticipate.

DESIGN AND PLANNING DISPUTES

Design and planning disputes typically arise when there is a disagreement between the owner, architect, and contractor regarding the design and planning of a construction project.

Examples include:

• Disagreements over project specifications, drawings, and blueprints
• Design errors or omissions
• Changes in design or scope of work
• Disputes over project timelines and deadlines

CONTRACTUAL DISPUTES

Contractual disputes occur when the parties disagree over the performance and/or interpretation of the terms and conditions of a construction contract. These disagreements involve anything from the wording of the terms, the implementation of the terms, the interpretation of the implementation of the terms, and more.

Examples include:

• Breach of contract
• Non-payment or delayed payment
• Scope changes, change orders, or project delays
• Disputes over warranty or guarantee provisions

CONSTRUCTION DEFECT DISPUTES

Construction defect disputes arise when there is a dispute over the quality of the construction work performed or the materials used in the project. In Colorado, this most often involves actual damage to property, although other injuries may be present.

Examples include:

• Building code violations causing damages
• Water intrusion or mold issues
• Structural and foundation issues
• Improper drainage systems and soils testing
• Defective or faulty workmanship
• Bodily Injury or Wrongful Death
• risk of bodily injury or threats to health and safety of occupants of residential property
• Loss of use of real or personal property[i]

PAYMENT AND MECHANICS’ LIEN DISPUTES

Payment disputes are common in construction projects, particularly when there are delays or issues with the work performed. These disputes can arise between contractors, subcontractors, and suppliers.

Examples include:

• Non-payment or delayed payment
• Trust Fund Statute and accounting issues
• Disagreements over the amount owed
• Disputes over change orders or extra work
• Mechanics’ Lien claims

SCHEDULING DISPUTES

Scheduling disputes typically arise when there are delays or changes to the construction schedule. Since the beginning of the COVID-19 pandemic, these types of disputes have risen in number considering supply chain issues for construction materials.

These disputes could also be caused by other factors, such as:

• Unforeseen conditions or events
• Changes in project scope or design
• Disputes over the allocation of resources
• Contractor or subcontractor performance issues

LEGAL OPTIONS TO ADDRESS CONSTRUCTION DISPUTES IN COLORADO

Many construction disputes are resolved without legal intervention, but other disputes require legal assistance. To resolve the dispute, you may want to try direct negotiations, mediation, arbitration, or litigation. However, be sure to review the dispute resolution or “ADR” section of any binding contracts on the project.

Direct negotiations are the cheapest option with the most immediate impact. Often, direct negotiations are initially attempted, and if successful, the construction project can move ahead. If it is unsuccessful, at least the parties know what the issues are and they can move forward.

Mediation involves an impartial intermediary. The parties voluntarily agree to meet and work through the disagreement with the assistance of the mediator. This process does not involve testimony or evidence but it may coincide with a lawsuit. Many courts will require mediation after a lawsuit is filed as part of the process. Either way, whether you enter into mediation via a lawsuit, it is important to have an attorney as your advocate and advise you throughout it.

Arbitration is common in construction disputes. Many contracts require arbitration. This process is similar to a trial but is often cheaper and faster, though the latter is not always the case. At least one arbitrator hears and decides the case. Typically, the decision is permanent and unappealable.

Litigation involves filing a complaint in state or federal court, and if not settled prior to trial, the case will go to trial. The decision of the court can be presented for appellate review.

POTENTIAL CONSTRUCTION DISPUTE REMEDIES

Resolving construction disputes in Colorado ends with at least one remedy. This remedy will hopefully address the full extent of the problem. It may help clarify misunderstandings, or it may place a harmed party in a better position. Monetary compensation, injunctive relief, or specific performance may be used to remedy construction disputes.

Monetary compensation, if awarded, covers the damages suffered by the party. Types of damages vary somewhat depending on whether you are the contractor or the owner. Contractors often suffer damages related to delays, disruption, inefficiencies, losses of productivity, and the costs to hire new workers. Owners suffer damages related to defective construction, incomplete work, delays, and liquidated damages.

Sometimes monetary compensation is not enough. A court may order a party to fulfill obligations, referred to as specific performance. Though this remedy is not used as much, it is common where either the subject of the contract is unique (for example, unique skills are required and cannot be easily replaced or found), or the true value of damages is difficult to calculate.

Injunctive relief can be used to preserve the status quo while litigation is pending.

Keep in mind that most construction disputes are complex and nuanced. Other remedies may be considered depending on your dispute’s unique facts and circumstances. However, the law may limit available remedies.[ii] That’s why it is always best to speak to a construction attorney to ensure you are properly proving your case and obtaining the right remedy.

CONTACT A CONSTRUCTION LAWYER IN COLORADO TODAY

Construction disputes can be costly, time-consuming, and damaging to the parties involved. Understanding the different types of construction disputes can help prevent them from occurring and ensure that they are resolved quickly and fairly. It is important to have a clear and detailed construction contract and to communicate effectively with all parties involved in the project to avoid disputes.

At Volpe Law, our experienced construction lawyers will advocate for your rights and advise you accordingly. Fill out the online form or contact us at 303-268-2867 to schedule a consultation.

[i] See C.R.S. 13-20-804.

[ii] See, e.g., C.R.S. 13-20-806.

DISCLAIMER

The information contained on this website is provided for informational purposes only. It is not legal advice and should not be construed as providing legal advice on any subject matter.  Laws frequently change and therefore this content is not necessarily up to date, nor comprehensive. Contact us or another attorney with any legal questions specific to your matter. You may request a consultation by calling us as 303-268-2867 or completing a consultation request form.