The Third Division of the Colorado Court of Appeals recently interpreted the Homeowner Protection Act of 2007 (the “HPA”) in Heights Healthcare v. BCER, 2023 COA 44, decided on May 25, 2023. The Court held that a senior living community that is located on a parcel zoned “commercial” or “mixed use” constitutes “residential property” that is protected by the HPA, regardless of the zoning designation.

The claims in Heights Healthcare arose from a contract between BCER and Heights Healthcare for BCER to provide mechanical and electrical services relating to the installation of Packaged Terminal Air Conditioner units at the senior living community. The contract between the parties included a limitation of liability clause, limiting BCER’s liability to a total of $22,500 for the total cost of services rendered. After the installation, Heights Healthcare discovered that the air conditioner units were malfunctioning, causing too few of the eighty-four units to run and tripping the breaker—shutting down the entire system—when the outdoor temperature dropped too low. Following the discovery of the malfunction, Heights Healthcare filed suit against BCER for breach of contract under the Construction Defect Action Reform Act (“CDARA”).