Florida May Reduce Statute of Repose for Construction-Related Claims

by Amanda Baggett on Mar. 12, 2015

Real Estate Construction 

Summary: Overview of pending legislation to reduce Florida's Statute of Repose

On January 22, 2015, Representative Jay Fant introduced House Bill 501, a bill aimed at reducing the current statute of repose for construction-related claims from 10 years to 7 years. Florida’s statute of limitations and statute of repose for claims “founded on the design, planning, or construction of an improvement to real property” are found at Section 95.11(3)(c), Florida Statutes. If enacted into law, HB 501 will take effect on July 1, 2015.

The statute of repose differs from the statute of limitations. The statute of limitations establishes a time limit within which an action must be brought, measured from the time of accrual of the cause of action. In contrast, the statute of repose absolutely bars a claim after passage of the period of repose, regardless of the underlying circumstances. In other words, the statute of repose provides a substantive right to be free from liability after the expiration of the established period of time, regardless of when the cause of action accrued.

Under the current law, the statute of limitations for a construction defect claim expires 4 years after the date the defect is discovered or should have been discovered with the exercise of due diligence. The statute of repose, on the other hand, expires 10 years after the later of the following:

  1. the date of actual possession by the owner;
  2. the date of the issuance of a certificate of occupancy;
  3. the date of abandonment of construction if not completed; or
  4. the date of completion or termination of the contract between the professional engineer, registered architect, or licensed contractor and his or her employer.

Assume the following facts to understand the interplay of the 4-year statute of limitations and the 10-year statute of repose under the current law:

The certificate of occupancy for a building is issued on January 1, 2015 (the latest of the contemplated events under 95.11(3)(c)). The owner discovers a defect on January 1, 2023.

Under this example, the statute of repose will expire on January 1, 2025 (10 years after the certificate occupancy was issued). While the owner would ordinarily have 4 years from the date of discovery to bring a suit for the defect, the statute of repose requires the owner to bring the suit within 2 years (on or before January 1, 2025) or the suit will be barred.

A quick survey of other states reveals that statutes of repose vary greatly across the country – they range from 4 to 15 years. However, the proposed 7 year period in HB 501 appears to be in line with the southeast region: Alabama – 7; Georgia – 8; South Carolina – 8; North Carolina – 8; Tennessee – 4. No matter your position on whether Florida’s statute of repose should be changed, House Bill 501 is certainly one to watch.

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