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By: S. Jake Carroll
While the statute of limitations may limit a contractor’s exposure to claims for repair or replacement of defective construction work, many states have also enacted so-called “Statutes of Repose” designed to lay to rest any actions arising from the design or construction of a building or structure after the passage of the prescribed period of time.
Florida’s statute of repose, Section 95.11(3)(c), provides that the absolute latest date that an engineer, architect, or contractor can be liable for his or her work or services, is 10 years after “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 … whichever date is latest.”
But the “date of completion” of the contract was held by at least one Florida Courts to mean the date the owner made final payment. See Cypress Fairway Condominium v. Bergeron Construction, 164 So. 3d 706 (Fla. 5th DCA 2015). This interpretation was cause for concern given the recent rise in litigation brought by condo associations and building owners who could postpone final payment with the hopes of extending the 10-year period.
In light of these concerns, Governor Scott signed House of Representatives Bill 377 which clarifies “completion of the contract” to mean the later of “the date of final performance of all the contracted services” or “the date that final payment for such services becomes due,” regardless of the date final payment is made. This new definition will prevent a customer’s delay in making final payment from extending a contractor’s potential exposure for construction defects, and was effective July 1, 2017.
The new law gives builders more say and certainty on when a statutory window of liability for completed projects begins to run. However, even with these changes, builders and contractors should still review their construction contracts for specific provisions regarding completion and payment.
If you have any questions or would like more information, please contact S. Jake Carroll at [email protected].