SB185 addresses when the “economic loss rule” applies to claims involving residential construction defects. The bill states that Colorado policy is to recognize that construction professionals owe an independent tort duty to build residential homes in a non-defective and reasonable manner, and that this duty applies equally to both original home purchasers and later buyers. In effect, the bill is aimed at clarifying that homeowners may pursue certain tort claims against construction professionals even when contractual relationships are absent or when the claim is brought by a subsequent purchaser.
The bill specifically responds to the Colorado Court of Appeals decision in Appleby v. Dossey Sudik Structural Engineers LLC and declares that the decision does not reflect Colorado public policy. It adds a new subsection to the damages limitation statute, section 13-20-806, to guide courts in applying the economic loss rule in residential construction cases. The measure would become effective after the referendum period unless challenged by petition, in which case it would go to the 2026 general election.
Impact
SB185 would amend Colorado Revised Statutes section 13-20-806 to codify a rule that construction professionals owe the same independent duties to original and subsequent residential purchasers for purposes of the economic loss rule. This would likely expand or preserve the ability of homeowners to bring negligence-based claims for construction defects against builders, engineers, and other construction professionals, and it would limit the extent to which defendants can rely on the economic loss rule to bar tort claims. The bill affects residential construction litigation, construction professionals, homeowners, and future court interpretation of defect claims.
Sentiment
The bill appears to have received mixed but meaningful support, advancing through the Senate and House Judiciary committees and passing Senate third reading, though not unanimously. The recorded votes show committee and floor approval with some opposition, suggesting the measure was generally favored by supporters of homeowner remedies and construction-defect accountability, but not without concern from those wary of expanding tort exposure for the construction industry. No committee transcripts were provided, so the sentiment can be inferred mainly from the vote margins and the bill’s targeted policy response.
Contention
The main point of contention is whether Colorado should broaden or clarify tort liability for construction professionals in residential defect cases, especially where the economic loss rule might otherwise limit claims. Supporters likely view the bill as correcting an appellate decision and ensuring homeowners have a meaningful remedy for defective construction, including later purchasers. Opponents are likely concerned that the bill increases litigation risk, liability, and costs for builders, engineers, and other construction professionals by weakening a defense that can bar purely economic claims.