Recent changes to Florida's statute of repose provide clarity for contractors

The Florida legislature has amended the construction statute of repose for a second time in two years. The new amendments, which took effect July 1, 2018, include a provision clarifying what is meant by “completion of the contract” and a provision extending the statute of repose one year in certain circumstances.

Pursuant to Fla. Stat. § 95.11(3)(c), Florida’s four-year statute of limitations and 10-year statute of repose, the time for commencing an action founded on the design, planning, or construction of an improvement to real property begins to run from the latest of the following dates:

1. Actual possession by the owner.
2. Issuance of a certificate of occupancy.
3. Abandonment of construction if not completed.
4. Completion of the contract or termination of the contract between the professional engineer, registered architect, or licensed contractor and is or her employer.

What does “completion of the contract” mean?

In 2017, the Florida legislature added language to the statute of repose to define “completion of the contract” as the later of the date of final performance of all the contracted services or the date that final payment becomes due. However, to clarify the meaning of “completion of the contract” in certain instances involving building permits, the legislature has added the following language:

With respect to actions founded on the design, planning, or construction of an improvement to real property, if such construction is performed pursuant to a duly issued building permit and if a local enforcement agency, state enforcement agency, or special inspector, as those terms are defined in s. 553.71, has issued a final certificate of occupancy or certificate of completion, then as to the construction which is within the scope of such building permit and certificate, the correction of defects to completed work or repair of completed work, whether performed under warranty or otherwise, does not extend the period of time within which an action must be commenced.

This means that repair or correction of completed work, including warranty work, performed after the issuance of a certificate of occupancy or certificate of completion, does not delay the start of the running of the statute of limitations or repose.

Extending the Statute of Repose in Some Instances

The recent amendments to the statute of repose also provide that the time period during which certain claims must be brought can be extended so long as at least one party has brought a claim within the 10 year period. Specifically, the new language provides that:

“* * * [C]ounterclaims, crossclaims, and third-party claims that arise out of the conduct, transaction, or occurrence set out or attempted to be set out in a pleading may be commenced up to 1 year after the pleading to which such claims relate is served, even if such claims would otherwise be time barred.”

This provision extends the time for defendants and third-parties in construction defect actions to assert their own claims against other responsible parties, providing relief in certain circumstances not previously available to litigants. In the past, if an owner sued a general contractor on the final day before the running of the previous statute of repose, that contractor could not bring claims against its subcontractors. By extending the time period by one year in this instance, the general contractor is afforded the time to properly investigate the claims and determine if there are other responsible parties that should be brought into the dispute.

If you have questions about this topic or any other construction law issues, please contact one of the attorneys below.