A claimant’s right to bring a cause of action based on a construction defect does not extend indefinitely. Builders, developers, contractors, and owners all must be aware of the time limitations for filing a lawsuit for construction related claims.
In cases involving the design, planning, or construction of an improvement to real property, the Statute of Limitations provides that a claimant has four years to bring a lawsuit after a project is completed or upon discovery of any latent (hidden) defects. § 95.11(3)(c), Fla. Stat.
In addition, there is a ten-year Statute of Repose to sue for latent defects, meaning that any action must be brought, at the very latest, within ten years from a specific set of events. Like the Statute of Limitations, the Statute of Repose defines the time when a lawsuit can be filed. The difference is that the Statute of Repose bars a suit after a specified period, which may end before the plaintiff has even discovered the defect.
The Statute of Repose requires an action “founded on the design, planning or construction of an improvement to real property” to be commenced within 10 years after the latest of the following four events:
- the date of actual possession by the owner,
- the date of the issuance of a certificate of occupancy,
- the date of abandonment of construction if not completed, or
- the date of completion or termination of the contract between the professional engineer, registered architect, or licensed contractor and his or her employer, whichever is latest.
Filing a Lawsuit Against Subcontractors
Where third-party claims are involved, there is naturally a gap in time between the filing of the plaintiff’s lawsuit against the general contractor and the general contractor’s third-party action against its subcontractors whose work may be implicated by the alleged defects. This situation does not generally create any problems with the ten-year Statute of Repose.
However, if the plaintiff’s complaint is filed near the end of the Statute of Repose, it can create a problem for the general contractor seeking to make claims against its subcontractors. For example, if the general contractor is served with a construction defect complaint on the day that the ten-year Statute of Repose expires, it will have no time to file third-party claims against its subcontractors.
Under the current version of the statute, the general contractor’s action could be time barred from taking action against those subcontractors since the ten-year Statute of Repose expired the day the lawsuit was served. There is simply no time to obtain the necessary files, review them, and file a lawsuit against the subcontractors.
This harsh result is unavoidable in this situation as Florida courts have consistently held that a claimant’s right to bring an action on that construction defect is deemed completely extinguished upon expiration of the repose period. Allan v. Conrad, Inc. v. Univ. of Central Florida, 961 So. 2d 1083 (Fla. 5th DCA 2007).
As a result, the general contractor would face exposure for the entire claim without any ability to bring potentially liable downstream contractors into the litigation. Fortunately, things will soon be changing.
The New Law
On March 23, 2018, section 95.11(3)(c), Florida Statutes, was amended relaxing the Statute of Repose for construction defect claims. The revisions to the Statute of Repose implemented this legislative session remedy this hypothetical situation.
Section 95.11(3)(c) will now provide the following addition language:
“[C]ounterclaims, cross-claims, and third-party claims that arise out of the conduct, transaction, or occurrence set out or attempted to be set out in a pleading may be commenced up to 1 year after the pleading to which such claims relate is served, even if such claims would otherwise be time barred.”
The amendment was passed by the Florida legislature and signed by the Governor on March 23, 2018. It will go into effect on July 1, 2018.