Article
Courtesy of
By Bilzin Sumberg
Published May 21, 2023
On April 13, 2023, governor Ron DeSantis signed
Senate Bill 360 (“SB 360”) into law,
which drastically reduces the time limit for property owners to file suit
against builders and construction professionals for construction defects and
imposes a more stringent standard for bringing a claim under the Florida
Building Code. The statute now clearly identifies the triggering event for
when the clock begins ticking on the statute of repose, rather than leaving
it to courts to identify (and disagree upon) it. We examine here the history
of Florida’s construction statute of repose, and how this new, bright-line
law will affect Florida’s construction and real estate industries.
Statutes of Limitation and Repose
In Florida, plaintiffs must bring construction defect claims within the time
limits prescribed by the statute of limitations and statute of repose, which
are both governed by §95.11(3)(c), Fla. Stat. While there may typically be
exceptions to the statutes of limitations, the statute of repose is the
absolute last date on which a property owner can sue a builder or
construction professional. Failure to file suit before the running of the
statute of repose constitutes a waiver of such claims.
Changes to Time Limits and Triggering Events
Without question, SB 360’s most impactful change is the reduction of the
statute of repose from 10 years to seven. By substantially shortening the
statute of repose, SB 360 reinforces the Florida Legislature’s intent of
eliminating stale construction defect claims.
Florida’s four-year statute of limitations for construction defect claims
remains the same under the new bill, with the important exception that the
date from which the clock begins to run is the earlier, as opposed to the
later, of the triggering events
Before the legislature enacted SB 360, the statute of limitations and
statute of repose began running on the later of: (i) the date of actual
possession by the owner; (ii) the date of the issuance of a certificate of
occupancy (CO); (iii) the date of abandonment of construction if not
completed; or (iv) the date of completion or termination of the contract.
Despite the Florida Legislature’s intent of providing finality and certainty
to potential defendants, the previous version of by §95.11(3)(c) did
anything but. Certain of the statutes’ triggering events invited creative
pleading capitalizing on the ambiguities as to when the “completion or
termination” of the contract occurred. For example, in Cypress Fairway
Condo. v. Bergeron Constr. Co., Inc., 2015 WL 2129473 (Fla. 5th DCA, May 8,
2015), the court grappled with whether a contract was “completed” on the
date that the contractor submitted its final application for payment, or the
date that the owner actually made that final payment. Although the contested
period was only three days, the difference in those days was jurisdictional
for the plaintiff. There, the court determined that a contract is “complete”
when final payment is made. This ambiguity was not limited to the date of
“completion or termination.” Sabal Chase Homeowners Association, Inc. v.
Walt Disney World Co., 726 So.2d 796 (Fla. 3d DCA 1999) involved a community
of multiple townhomes and condominiums. Under the then-applicable 15-year
statute of repose, the court determined that the statute of repose ran
according to the date on which the last certificate of occupancy was issued
in the community. In Harrell v. Ryland Group, 277 So.3d 292 (Fla. 1st DCA
2019), the statute of repose ran, not according to the date of the issuance
of the certificate of occupancy, but rather, the date on which the
homeowners took possession of the home as reflected on a warranty deed. And,
just recently, after SB 360 passed, the Second District Court of Appeal
issued its opinion in Westpark Pres. Homeowners Ass’n v. Pulte Home Corp.,
No. 2D21-2084 (Fla. 2d DCA May 10, 2023), in which the court found that the
statute of repose ran on the date of the issuance of the last certificate of
occupancy for a development, and not on the date on which individual
homeowners took possession of their homes from the developer by warranty
deed.
The new iteration of §95.11(3)(c) eliminates the case-by-case factual
investigation of potential dates. Under the revised version of §95.11(3)(c),
the statutes begin to run on the earlier of (i) the date of issuance of a
temporary certificate of occupancy (TCO), a CO, or a certificate of
completion (CC); or (ii) the date of abandonment if construction is not
completed. This change provides a tangible point in time from which to
measure the limitations or repose period where a CC, TCO, or CC is issued.
Accordingly, owners, design professionals, and contractors, alike will know
exactly when the time for filing suit will expire.
Ostensibly, the bill benefits potential defendants by reducing the time of
their exposure to liability. Florida law requires insurance carriers to
offer coverage to contractors for liability arising out of current or
completed operations for a period sufficient to protect against liability
arising out of an action brought within the time limits provided in
§95.11(3)(c). §627.441(2), Fla. Stat. (2022). Put otherwise, the longer the
statute of repose, the longer the period that a contractor, and its
insurance carrier, remain “on the hook.” Contractors, in turn, pass these
increased costs on to developers and property owners.
While opponents of the bill argued that SB 360 would leave property owners
more vulnerable to contractors who performed shoddy work, given the
inextricable link between the costs of commercial general liability policies
and the length of the period of repose, enacting SB 360 could result in a
“win-win” for builders and developers by combatting rising construction and
insurance costs.
New Requirement for Materiality for §553 Claim
Finally, SB 360 enacts a heightened standard for claims brought pursuant to
Chapter 553, Fla. Stat., otherwise known as the Florida Building Code.
Florida law now limits recovery to only “material violations” of the Florida
Building Code, defined as a “violation that exists within a completed
building, structure, or facility which may reasonably result, or has
resulted, in physical harm to a person or significant damage to the
performance of a building or its systems.” §553.84, Fla. Stat. (2023). This
requirement of “materiality” appears to curtail owners’ ability to sue
builders and other construction professionals. What constitutes “significant
damage” will likely produce the next wave of Florida construction defects
jurisprudence.
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