In early March, 2017 the Colorado Court of Appeals determined a key AIA Contract Provision was void and unenforceable in a residential project.
In Broomfield Senior Living v. R.G. Brinkmann , the Court of Appeals considered whether Section 13.7.1 of the AIA Form A101-1997 Contract was enforceable against the ownership of a senior living project.
Section 13.7.1 of the AIA contract generally states that any defect claims against the general contractor must be filed within a specified date from substantial completion of the project.
The A101 contract is a popular agreement used by owners and general contractors in construction. In this instance, it was entered into between a national general contracting firm and a national company that builds and operates senior living centers.
Brinkmann argued that the AIA’s statute-of-limitations provision (using “substantial completion” as the starting point) reflected the parties’ intent to deviate from Colorado’s 2 year statute of limitation. The appellate court concluded that such deviation was in violation of the express purpose of the Homeowners Protection Act (“HPA”). The decision pivoted on the determination that the senior living community was “residential” in nature. By declaring the project to be “residential,” the Colorado Court of Appeals nullified the concept that commercially-sophisticated parties can consent to modify the statute-of-limitations by adopting long-standing AIA contract language.
Commercial contractor should be aware that Section 13.7.1, which is found in several AIA contract forms, won’t be enforced in any Colorado project involving the construction of “residential” living units.