June 15, 2023 / Law Alert

2023 Florida construction defect law changes: A practical analysis

On April 14, 2023, Florida amended the statute of limitations and statute of repose for construction defects. In light of increased construction activity in Florida due to an active real estate market and due to repairs and reconstruction flowing from Hurricane Ian, many of our Florida construction clients have asked what is the practical effect of the changes to the law on potential claims.

Overview of statute
The prior version of Section 95.11(3)(c), Florida Statutes, set forth a 4-year statute of limitations for construction claims and a 10-year statute of repose. The running of the statute of limitations could be tolled in the case of latent (hidden) defects, meaning that the four years would not begin to run until the owner discovered—or reasonably should have discovered—the defect. The statute contains an exception allowing an owner to file an otherwise barred claim if such claim is filed in response to another’s lawsuit. The statute further provides that warranty repairs do not delay either statute from running.   

Overview of changes
Statute of limitations and statute of repose triggering event change:
The new law changes when the time to file the claim begins to run for purposes of the statute of limitations and statute of repose. The date of actual possession by the owner is no longer a triggering event. Neither is the date of completion or termination of the design or construction contract. Rather, the amendment provides that the triggering event for the statute of limitations and statute of repose begins to run on the earliest of the following dates: the issuance of a temporary certificate of occupancy, certificate of occupancy or certificate of completion, or the date of abandonment of construction, if construction is not completed.

Statute of repose shortened:
Although the 4-year statute of limitations remains, the statute of repose was shortened from 10 years to 7 years. A statute of repose is like a statute of limitations in that it cuts off legal rights if they are not acted on by a specified deadline. But unlike statutes of limitations, a statute of repose is an absolute bar on claims after a specified time measured from a discrete event, without regards as to when a defect was or should’ve been discovered.

Each building considered separate: 
For the design, planning or construction of multiple buildings, such as townhomes and condominiums, the amended statute clarifies that each building must be considered its own improvement for purposes of determining the limitations period.

Model homes: 
For buildings used as model homes, the time begins to run from the date of recording of a deed first transferring the model home to another party.

When do the changes apply? 
The amendments apply to any action commenced on or after April 14, 2023, regardless of when the cause of action accrued, except that a 1-year grace period was built into the statute to file by July 1, 2024 if the amended timelines would now bar the claim.

To help illustrate the application of these changes for our Florida clients, we pose the following hypothetical:

Acme Builders built a Florida home for Harry and Irma Kane. A certificate of occupancy was issued on June 1, 2016. After some punch-out work was done over the summer of 2016, the contract was completed on Aug. 15, 2016. The Kanes moved into the home on Sept. 1, 2016. On Sept. 28, 2022, Hurricane Ian hit Florida. After the hurricane, the Kanes did not notice any damage to their home, other than some debris on the roof and needing to replace some trees and repair landscaping around the home. After the Kanes enjoyed the warm, dry Florida winter, the spring of 2023 brought some rains. On April 15, 2023, the Kanes noticed a darkened spot on the master bedroom ceiling. Over the next several weeks, they noticed the darkened area become larger and more moist, and it even started dripping. On June 2, 2023, the Kanes filed suit against Acme Builders alleging a defective roof.

Under the new Florida law, is the Kane’s action barred?

Under Florida’s 4-year statute of limitations, the Kanes’ suit would be barred unless the defect in the home was hidden or concealed and was not discoverable by reasonable and customary inspection. A jury will have to decide what the Kanes knew, when they knew it, and whether they should have noticed a defect sooner.

However, even if the Kanes could establish they reasonably first discovered the problem in the summer of 2023, Florida’s shortened statute of repose would cut off the claim. The new 7-year time period acts as an absolute bar to a claim, regardless of when the problem was discovered. The Kanes’ claim would have survived under Florida’s previous 10-year version.   

Note, however, that because the statute’s amendment cut off a claim that would have been viable under the previous statute of repose, the Kanes could take advantage of the 1-year grace period provided by the statute and file by July 1, 2024. After then, however, the grace period expires and the statute’s new timelines will control all claims in Florida.  

For more information or if you have questions about the application of these amendments to any potential claims or defense, please contact Javier Pacheco or any member of Porter Wright’s Construction Practice Group.