*Special thank you to SDV Law Clerk Iliriana Fteja for contributing to this article.
A new bill (SB 2022-736) was recently introduced to the Florida Senate. The proposed amendments to the statutes of limitations and repose could significantly impact construction defect claims by effectively creating additional exposure to contractors and insurance carriers.
The proposed bill requires all actions founded on the design, planning, or construction of an improvement to real property to be commenced within four years after the time to commence an action begins. Under the proposed amendment, the time to commence an action runs from 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 of the contract or termination of the contract between the professional engineer, registered architect, or licensed contractor and their employer. This provision would effectively alter the time to commence an action to whichever triggering event is earliest instead of the latest triggering event per the previous statute.
The proposed bill would introduce a new subsection 12 to §95.11 for any “Action Relating to an Improvement to Real Property.” But first, the proposed changes separate improvements into four categories:
“Category 1 improvement” relates to detached single-family homes or standalone building structures intended for use by either a single business or owner that does not exceed three stories in height and any related improvements.
“Category 2 improvement” relates to a single-family dwelling unit that does not exceed three stories in height and which is constructed in a series, or a commercial or non-residential building not exceeding three stories in height, and any related improvements to such dwellings.
“Category 3 improvement” includes commercial or residential buildings or structures of four or more stories in height and related improvements to such buildings or structures.
“Category 4 improvement” is wide encompassing, covering any improvement that does not fall under Categories 1-3.
Second, the proposed amendments would eliminate the current ten-year statute of repose for latent claims. An action that involves a latent defect may be commenced within four years after the facts giving rise to the cause of action are, or should have been, discovered with the exercise of due diligence, as opposed to time running from when the defect is discovered, or should have been discovered, with the exercise of due diligence.
However, the repose period would vary depending on the Category improvement. The proposed amendment includes a provision implying that an action may not be commenced more than five years after the time for commencing an action begins to run for a Category 1 improvement, seven years for a Category 2 improvement, and ten years for a Category 3 or 4 improvement. This creates a similar 10-year repose period as previously, but only for Category 3 or 4 improvements.
Under the proposed amendment, “completion of the contract” is considered the later of either the date of final performance of all the contracted services, or the date that final payment for such services becomes due, disregarding the date the final payment is made.
If the proposed bill is enacted as law, the amendments to the statutes of limitations and repose will apply to any action commenced on or after July 1, 2022, regardless of when the cause of action accrued. However, any action that would not have been barred prior to the amendments made by the Senate bill may commence before July 1, 2023.
For more information, contact Kelly A. Johnson at KJohnson@sdvlaw.com.