July 8, 2016
On July 5, 2016, the Colorado Supreme Court announced it will consider the construction defects case of Forest City Stapleton, Inc., et al. v. Rogers. In this case the Colorado Court of Appeals, for the first time, imposed an implied warranty of “suitability” for new home construction in certain instances. The Colorado appellate court held that a master developer may be liable to a subsequent home purchaser under a so-called implied warranty of suitability. The decision is regarded as a step backward in construction defect reform progress. This opinion seemingly expands the potential scope of liability to developers and contractors. This comes at a time when condominium construction in the Denver metro area has all but disappeared under the pressure of exposure to construction defect litigation. The Supreme Court’s decision to review the Rogers case is an opportunity for a change in course on this key issue in the industry.

The Supreme Court will take on the following issues:

  1. Whether an implied warranty (meaning a warranty that springs into existence automatically, even though it is not contained in a contract) of “suitability” can exist between a developer and ultimate purchaser of the home, when the developer sold the vacant lot to a builder who in turn builds the dwelling and sells to the homeowner 
  2. Whether privity of contract (meaning a direct contractual relation) is required before a purchaser of a home can sue a developer for breach of the implied warranty of suitability

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