Proposed Florida Senate Bill 736 would eliminate the 10-year statute of repose for latent construction defects and make significant changes to Chapter 558, Florida Statutes, including awarding attorneys’ fees for rejecting settlement offers and requiring courts to appoint construction experts to inspect defects.
Proposed SB 736 is entitled an act relating to construction defect claims, and it modifies section 95.11, Florida Statutes, and significant portions of Chapter 558, Florida Statutes.
First, section 95.11(3)(c) is modified as follows:
An action founded on the design, planning, or construction of an improvement to real property, with the time running from 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; except that, when the action involves a latent defect, the time runs from the time the defect is discovered or should have been discovered with the exercise of due diligence. In any event, the action 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. However, counterclaims, cross-claims, 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. 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. 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.
In essence, this change eliminates the 10-year statute of repose for construction defect claims.
The changes to Chapter 558, Florida Statutes, are as follows:
While a contractor receiving notice under Chapter 558, Florida Statutes, has the ability to provide a proposed settlement offer, the revisions to the statute would require the claimant to reject the settlement offer in writing and provide reasons for rejecting the offer, including stating omissions or unreasonable conditions of the offer and a detailed explanation why the offer is unreasonable. Upon receipt of the explanation, the contractor then has 15 days to make a supplemental offer. Rejection of the supplemental offer must also include a detailed explanation of the rejection.
If the claimant rejects an offer to make repairs at no cost to the claimant, then the claimant is not entitled to recover attorneys’ fees in any subsequent action unless the claimant proves by a preponderance of the evidence that, at the time of the offer, additional repairs were necessary beyond those offered to remedy the defect.
Within 90 days of acceptance of an offer, the claimant must enter into a contract with appropriately licensed contractors to remedy the defects. The party paying (offeror or insurer) must make payments directly to the contractor and cannot require the insurer to make payments first. Repairs must be completed within 12 months absent an agreement of the parties.
In any civil action alleging a construction defect, the court shall appoint an engineer, contractor, building code inspector, or other expert to examine the defect or evidence of the defect if repairs have been made. If all parties object or if the court finds that the cost of the expert outweighs the benefits, then the court is not required to appoint such an expert. The expert shall provide a report to the parties within 15 days following its examination of the defect. If the report, concludes that damages are the result of a construction defect, then the report must state the necessary repair actions and provide an estimated cost and time for the repair.
The parties shall compensate the expert, but the prevailing party can recover its share of the expert cost.
The expert cannot be employed to perform the repair.
If a claimant receives compensation for the repair, it must make the repair, or disclose the unrepaired defect to future purchasers.
Notice of the defects must be provided to any mortgagee.