New Law Shortens Timeframe for Construction Defect Lawsuits

If you’re a contractor, you know that construction defect lawsuits can be time-consuming and often frustrating. Those conditions can be compounded when a claim is filed many years after you finish a project. So you may be interested to learn that in April, Florida Governor Ron DeSantis signed a law that reduces the timeframe and updates property owners’ requirements. While this specific instance only applies to Florida, it may have implications for other states going forward.

What the law calls for

Florida Sen. Travis Hutson introduced Senate Bill 360 to streamline the legal process for construction projects. If a property owner discovers a construction defect and chooses to file a suit, the law shortens the statute of repose from 10 years to seven years. The law reads as follows:

"… the action must be commenced within 7 years after the date the authority having jurisdiction issues a temporary certificate of occupancy, a certificate of occupancy, a certificate of completion or the date of abandonment of construction if not completed, whichever date is earliest."

Those details differ from the prior law, which allowed 10 years, did not include a temporary certificate of occupancy (and referred to actual possession instead) and used the latest date, not the earliest.

In addition, the new law notes requirements for projects with multiple buildings—such as condominiums or apartment complexes. For these, each individual dwelling must have its own statute of limitations rather than one for the entire project.  

The law also looks at the term “material defect.” It defines it as “a Florida Building Code 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.” If a builder fails to rectify a material defect, the penalty for defective construction remains in line with earlier legislation. It includes a fine of $500 to $5,000 for a builder that does not fix a material violation within a given time.

How the law impacts builders and property owners 

Rep. John Snyder introduced the companion bill in the Florida House of Representatives. He noted that the legislation addresses rising construction costs and the high construction demand that Florida is experiencing.

Contractors may be relieved by the shortened statute of limitations, giving them more breathing room after completing a project. However, property owners will be under increased pressure to take note of defects and act on them quickly. 

Revising the statute of limitations is related to a broader effort to enact tort reform in the state. In March, Gov. DeSantis signed House Bill 837, which makes it more cumbersome for citizens to file claims against their insurance companies.

Final advice for contractors

This new law offers greater protections for builders and should be seen as good news. It follows a trend of reducing the statute of limitations and statute of repose on construction defects. Regardless of the statute of limitations or repose in your state, make sure you keep and maintain documentation on project files so you can defend against potential claims. There is a tendency to purge documents after a few years, but we recommend maintaining documentation through the expiration of the statute of repose on projects.

The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.