(1) (a) No later than
seventy-five days before filing an action against a construction professional, or no
later than ninety days before filing the action in the case of a commercial property,
a claimant shall send or deliver a written notice of claim to the construction
professional by certified mail, return receipt requested, or by personal service.
(b) Before filing a claim pursuant to this subsection (1) for program claims, a
claimant shall mitigate the damage caused by the alleged construction defect. A
claimant satisfies the duty to mitigate by taking reasonable action to prevent
further damage from the construction defect. A claimant must certify in the
complaint that the claimant has satisfied the duty to mitigate.
(c) If the claimant and construction professional dispute whether the
claimant has satisfied the duty to mitigate described in subsection (1)(b) of this
section, the claimant may proceed with the action but does not recover any
damages that the construction professional proves were caused by the claimant's
unreasonable failure to mitigate.
(d) A claimant does not breach the duty to mitigate if the cost to mitigate is
unreasonable under the circumstances or was beyond the claimant's financial
ability to perform.
(2) Following the mailing or delivery of the notice of claim, at the written
request of the construction professional, the claimant shall provide the
construction professional and its contractors or other agents reasonable access to
the claimant's property during normal working hours to inspect the property and
the claimed defect. The inspection shall be completed within thirty days of service
of the notice of claim.
(3) Except as provided in section 13-20-803.3 (9), within thirty days after the
completion of the inspection process conducted pursuant to subsection (2) of this
section, or within forty-five days after the completion of the inspection process in
the case of a commercial property, a construction professional may send or deliver
to the claimant, by certified mail, return receipt requested, or personal service, an
offer to settle the claim by payment of a sum certain or by agreeing to remedy the
claimed defect described in the notice of claim. A written offer to remedy the
construction defect shall include a report of the scope of the inspection, the
findings and results of the inspection, a description of the additional construction
work necessary to remedy the defect described in the notice of claim and all
damage to the improvement to real property caused by the defect, and a timetable
for the completion of the remedial construction work.
(3.5) (a) By the earlier of when a construction professional, other than an
architect or engineer, offers to settle a claim or sixty days after a construction
professional receives actual notice of claim, the construction professional shall
provide the claimant with the following documents and information, to the extent
the documents and information are within the construction professional's
possession, custody, or control:
(I) Copies of all plans, specifications, and soil reports related to the claim;
(II) Maintenance and preventive maintenance recommendations related to
the claim;
(III) The name, last-known address, and scope of work of each construction
professional who contracted to perform work or provide services and did perform
work or provide services related to the claim;
(IV) All documents related to the third-party inspection of the property and
the name and last-known address of the inspector who performed the third-party
inspection; and
(V) Copies of each insurance policy purchased by the construction
professional and related to the claim through the date of the notice of claim and
from the earlier start date of:
(A) The date the construction of the alleged defect was substantially
completed; or
(B) The date the construction professional substantially completed work on
the alleged defect.
(b) A construction professional may charge reasonable copying costs for the
documents described in subsections (3.5)(a)(I), (3.5)(a)(II), (3.5)(a)(IV), and (3.5)(a)(V)
of this section.
(c) Failure to provide the identifying information required in subsection
(3.5)(a)(III) of this section by the applicable deadline for designating a nonparty at
fault bars the construction professional from designating the unidentified
construction professional as a nonparty at fault under section 13-21-111.5 (3)(b) in a
subsequent action. If the construction professional fails to provide the information
required in subsection (3.5)(a)(I) of this section, the claimant need not comply with
the certificate of review requirement in section 13-20-803.3 (2).
(3.7) (a) By the earlier of when a construction professional who is an
architect or engineer offers to settle a claim or sixty days after a construction
professional receives actual notice of claim, the architect or engineer shall provide
the claimant with the following documents and information, to the extent the
documents and information are within the architect's or engineer's possession,
custody, or control:
(I) Copies of all approved construction documents and specifications,
including addendums issued during construction, prepared by the architect,
engineer, or consultants;
(II) The name, last-known address, and scope of work of each architect or
engineer who performed work or provided services as a consultant related to the
claim and on the claimant's property; and
(III) Copies of each insurance policy purchased by the architect or engineer
and related to the claim through the date of the notice of claim and from the earlier
start date of:
(A) The date the construction of the alleged defect was substantially
completed; or
(B) The date the architects and engineers substantially completed work
related to the alleged defect.
(b) An architect or engineer may charge reasonable copying costs for the
documents described in subsection (3.7)(a) of this section.
(4) Unless a claimant accepts an offer made pursuant to subsection (3) of
this section in writing within fifteen days of the delivery of the offer, the offer shall
be deemed to have been rejected.
(5) A claimant who accepts a construction professional's offer to remedy or
settle by payment of a sum certain a construction defect claim shall do so by
sending the construction professional a written notice of acceptance no later than
fifteen days after receipt of the offer. If an offer to settle is accepted, then the
monetary settlement shall be paid in accordance with the offer. If an offer to
remedy is accepted by the claimant, the remedial construction work shall be
completed in accordance with the timetable set forth in the offer unless the delay is
caused by events beyond the reasonable control of the construction professional.
(6) If no offer is made by the construction professional or if the claimant
rejects an offer, the claimant may bring an action against the construction
professional for the construction defect claim described in the notice of claim,
unless the parties have contractually agreed to a mediation procedure, in which
case the mediation procedure shall be satisfied prior to bringing an action.
(7) If an offer by a construction professional is made and accepted or if a
proposal made by a claimant is accepted, and if thereafter the construction
professional does not comply with the offer to remedy or settle a claim for a
construction defect or with the claimant's proposal, the claimant may file an action
against the construction professional for claims arising out of the defect or damage
described in the notice of claim without further notice.
(8) After the sending of a notice of claim, a claimant and a construction
professional may, by written mutual agreement, alter the procedure for the notice
of claim process described in this section.
(9) Any action commenced by a claimant who fails to comply with the
requirements of this section shall be stayed, which stay shall remain in effect until
the claimant has complied with the requirements of this section.
(10) A claimant may amend a notice of claim to include construction defects
discovered after the service of the original notice of claim. However, the claimant
must otherwise comply with the requirements of this section for the additional
claims.
(11) For purposes of this section, actual receipt by any means of a written
notice, offer, or response prepared pursuant to this section within the time
prescribed for delivery or service of the notice, offer, or response shall be deemed
to be sufficient delivery or service.
(12) Except as provided in this section and section 13-20-806, a claimant
shall not recover more than actual damages in an action.
(13) An insurer, as defined in section 10-1-102 (13), shall not cancel, deny, or
reduce coverage based on any claim for benefits covered by an existing liability
insurance policy issued to a construction professional based on the construction
professional making an offer to repair or settle a construction defect claim
pursuant to this section. Any settlement or repair agreement that affects coverage
is subject to insurer approval.