The court concluded that the homeowners’ association brought the claims after the expiration of the 10 year statute of repose applicable to construction defects. The decision turned, at least in part, on the fact that the general contractor was also the owner of the townhomes at the time the certificates of occupancy were issued.
Westpark Preserve Homeowners Association, Inc. v. Pulte Home Corporation, arises from a lawsuit between a homeowners’ association and a general contractor over claims relating to allegedly defective construction. The general contractor built a townhome development on land it owned, with the last sale of the one of the townhomes occurring in June 2009. The homeowners’ association filed its lawsuit in February 2019. In response, the general contractor sought summary judgment, arguing that Florida’s 10-year statute of repose barred the claims because it was the owner of each townhouse when the certificates of occupancy were issued, and that the last certificate of occupancy was issued in January 2009. The trial court agreed, and granted summary judgment in favor of the general contract. The association appealed.
The appellate court affirmed the ruling, and in doing so, provided a thorough analysis of Florida’s statute of repose applicable to claims for construction defects. The court began by noting that a statute of repose “establishes an absolute bar to the filing of any claim after the expiration of the repose period” and providing the applicable language from Florida’s statute of repose applicable to construction defect claims:
action founded on the design, planning, or construction of an improvement to real property . . . must be commenced within 10 years after 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 completion of the contract or termination of the contract between the professional engineer, registered architect, or licensed contractor and his or her employer, whichever date is latest.
(emphasis in opinion)
In granting summary judgment, the trial court found that the time period for the statute of repose began when the certificates of occupancy were issued. The association argued that this was incorrect because latest date under the statute is triggered by possession by the owner, and that the owner should be considered the purchaser of the unit from the general contractor.
The appellate court disagreed with the association’s argument, recognizing that at the time of the issuance of the certificate of occupancy, the general contractor was the owner of the townhome, with all rights to possess or sell the town home. The court reasoned that if it accepted the association’s interpretation of the statute of repose, it would effectively add language allowing an action to be commenced within 10 years after the date the property is sold. The appellate court also concluded that if it accepted the association’s definition, it would undermine the statute of repose’s purpose of protecting contractors, architects, and engineers from stale claims.
Based on these conclusions, the appellate court determined that the latest applicable date that the statute of repose could have started running was the date the last certificate of occupancy was issued, meaning the lawsuit against the general contractor was filed about 30 days too late and was barred by the statute of repose.
There are a few key takeaways from this decision for contractors. First, contractors should always be wary of claims that are made years after a project’s completion and should look to see if they are barred by either a statute of repose or statute of limitations.
Second, the critical fact here was that the general contractor was the owner of the property on which it was building. If the general contractor did not own the property, but was building the project for a developer, then the latest applicable date might have been when the last unit was sold, which would have made the lawsuit timely in this case. Contractors should be mindful to structure development projects and their underlying corporate and ownership structures with an eye towards triggering statutes of limitation and repose as early as possible.
Finally, earlier this year, Florida’s legislature shortened the statute of repose from 10 years to seven years, increasing protections for contractors.