Amendment Adds Clarity to Florida's Construction Statutes of Limitations and Repose
On June 14, 2017, Florida’s Governor signed into law House Bill 377, which seeks to provide clarity to when Florida’s construction statutes of limitations and repose begin to run. The existing version of the statute, § 95.11(3)(c), Florida Statutes, provides that both the limitations period and the repose period begin to run when the later of certain specified events occurs:
- Actual possession by the owner; or
- The date of issuance of a certificate of occupancy; or
- The 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 his or her employer, or
- Regarding the 4-year limitations period only, if the defect is latent, when the defect is discovered or should have been discovered with the exercise of due diligence.
Unfortunately, the current version of the statute does provide a definition of “completion” of the contract. In 2015, Florida’s Fifth District Court of Appeal held in Cypress Fairway Condo. v. Bergeron Const. Co. Inc., 116 So. 3d 706 (Fla. 5th DCA 2015) that a contract is completed within the meaning of the statute, not when the work is completed, but when the final payment due under the contract is made. As a result, some owners began inserting language into contracts with the effect of extending the time for making final payment, and finding other ways to delay making final payment. The result was that limitations period as well as repose periods could be unilaterally extended almost indefinitely, which defeats the purpose of the statute, to place limits on the duration of potential liability for construction defects.
By amending the statute, the Florida Legislature has sought to prevent the purpose of the statute from being circumvented in this way, by providing a definition for when a contract is “completed.” The amended version of the statute provides that:
Completion of the contract means the later of the date of final performance of all the contracted services or the date that final payment for such services becomes due without regard to the date final payment is made.
While not a perfect solution, the amendment is certainly a significant improvement that should make it easier for litigants and their legal counsel to determine when a particular claim for construction defects is barred by the statute of limitations, or extinguished by the statute of repose.
The amendment will take effect July 1, 2017, and will apply to causes of action that accrue after that date.