News & Resources

Florida Legislature Shortens Statute of Repose Trigger for Some Construction Defect Claims

October 3, 2017 | Category: Subro News and Cases

The Florida Legislature recently revised Florida's Statute of Repose (“SOR”) as it pertains to construction defect claims. The action was taken in response to Cypress Fairway Condominium v. Bergeron Construction Co., Inc., 164 So.3d 706 (Fla. 5th DCA May 8, 2015). Specifically, as it relates to claims founded on the design, planning, or construction of an improvement to real property, the SOR requires that an action must be commenced within 10 years after the latest of four specified events:

  • 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 the completion or termination of the contract between the professional engineer, registered architect, or licensed contractor and his or her employer. (Emphasis supplied)

The Cypress Court held the date of “completion of the contract” should be interpreted to mean the date on which final payment was made under the terms of the contract. This had the effect of potentially lengthening the SOR significantly, if the owner or other interested party didn’t make timely payment.
 
In an obvious attempt to reverse the holding in Cypress, the legislature passed, and Governor Rick Scott signed into law, a bill that states, as applied to the last of the four listed triggering events, the “date of the completion … of the contract,” the 10-year statute of repose commences when the work is completed or when final payment becomes due, whichever is latest. Both dates are without regard to the date final payment is made (as referenced in Cypress).

As the date of final payment is no longer a consideration, the legislative revision prevents owners from withholding or delaying payment as a means of extending the 10-year repose period. Thus, as to claims against engineers, architects and contractors accruing after July 1, 2017, subrogation plaintiffs relying on the last triggering event must now be aware that the 10-year repose period will commence from the date the insured’s work is completed or when final payment is due under the contract, whichever is later. The change has no effect on the first three potentially triggering events.