New Law Brings Relief to Developers, Contractors Facing Untimely Construction Defect Suits

One of the most significant changes in years to the Florida laws governing construction defect litigation will take effect on July 1, and for some of the state’s real estate developers and general contractors the changes are going to bring meaningful relief.  The new law will provide one year for developers and contractors to file claims against design professionals, subcontractors and suppliers when they are hit with defect lawsuits just prior to the expiration of the 10-year deadline for latent defect litigation.

The new amendments to Section 95.11(3)(c) of the Florida Statutes are intended to correct what many believe to be an unfair byproduct of the state’s 10-year statute of repose, which functions as a final deadline for the filing of construction defect suits.  It provides that actions for latent construction defects must commence within 10 years of the last 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 their employer.

Florida-legislature-300x169Prior to the new law, developers or general contractors that are sued in the days, weeks or months prior to the expiration of the 10-year statute of repose would still be required to file any related pass-through claims against subcontractors, suppliers and design professionals before the 10-year expiration.  Although in some instances the relation-back doctrine may provide relief to parties seeking to assert pass through claims after the expiration of the statute of limitations, the new law makes it clear that parties that are hit with a defect suit have an entire year to file all pass through claims regardless of the 10-year deadline.  In addition, the law is retroactive in that it allows those who are already facing litigation prior to July 1 of this year to take until July 1, 2019 to file any related claims.

The goal behind this legislation is to provide enough time for developers and contractors to investigate a claim, identify any subcontractors, suppliers and others that may be responsible for the alleged defects, and file any related claims as appropriate.  Construction defect litigation often involves several parties, including specialty subcontractors responsible for such elements as doors, windows, roofs, mechanical, electrical and plumbing systems.  In some cases, additional parties responsible for the latent defects are not revealed until after investigation and discovery have taken place, but the current language of the statute of repose could make these subsequent counterclaims, cross-claims and third-party claims time barred.

Real estate development and construction are among the leading drivers of the Florida economy, and the changes under this new law to the state’s statute of repose for construction defect litigation will help to bring added fairness and predictability for those in the industry.