By Barry Ansbacher, Esq. / Published July 2023
Senate Bill 360 was signed by the governor and became law on April 14, 2023. The new law makes significant changes impacting both homeowners’ and community associations. The law is effective immediately. However, there is a “grace” period until July 1, 2024, for claims to be filed that would be otherwise barred by the new law.
In Florida, the statute of limitations (i.e., the time limit to bring a lawsuit) for claims relating to architecture, engineering, building materials, or construction is four years. The new law leaves the time at four years but makes significant changes in how the time is calculated.
The statute of limitations that applies to construction defect claims is §95.11(3)(c). As amended by Senate Bill 360, the limitations period is now four years from the earliest of (1) issuance of a certificate of occupancy, temporary certificate of occupancy, or certificate of completion; or (2) abandonment of the job.
For latent (i.e., hidden) defects the limitations period remains four years from the time the defect is discovered or with reasonable diligence should have been discovered. For example, if there is water staining on your ceiling, this may start the clock for a roof leak claim even if you don’t know the exact cause because the staining should alert you to investigate. Although the new law did not change this limitation period, the changes to the related statute of repose will have a significant impact on this type of common claim.
Previously, the four-year clock did not start until the last of these three events: (1) completion of the contracted work, or if applicable, abandonment of the job; (2) issuance of a certificate of occupancy for the work; or (3) the date the “owner” took actual possession of the property. The effect was that a new home buyer would have at least four years from closing to bring a claim.
For Florida condominiums, Fla. Stat. 718.124 provided a fourth event. The limitations period for claims brought by condominiums was tolled (i.e., did not begin to run) until turnover of the association by the developer. This tolling provision was not changed by Senate Bill 360, so the statute of limitations for condominium associations (not individual unit owners) continues to be tolled until turnover.
Although there is no similar tolling provision for homeowner associations, some courts have ruled that “actual possession” does not occur until turnover, essentially creating a tolling provision. By eliminating the “actual possession,” the deadline for claims brought by homeowner associations is not affected by turnover.
A statute of repose is the harsher cousin to a statute of limitations. Limitations laws require owners to timely file lawsuits (or arbitration claims) after they know about a problem. Comparatively, a statute of repose eliminates an owner’s rights, even in those instances where the owner is completely unaware that a design or construction defect exists.
In 1980 Florida enacted a 15-year statute of repose for construction defect claims. The repose period was shortened to 10 years in 2006. The time period for repose is measured using the same formula as for the limitation period, except that the extra time allowed for latent defects does not apply.
Under the new law the time period is reduced to only seven years. As many defects don’t emerge within seven years, this may result in owners having no opportunity to bring a claim before the time expires.
The shortening of repose may have a severe impact on Florida community associations. Fla. Stat. 718.124 has been determined by Florida appellate courts to apply only to limitations and not to repose periods. This means that owners may not control the association before the time allowed to bring claims has expired. There is likewise no tolling of repose available to homeowner associations.
The effects of repose are exacerbated by another provision in Senate Bill 360. The new law provides that for condominiums and other multifamily projects, the time runs on a building-by-building basis. Previously, most courts measured the limitations and repose periods on a project-wide basis.
In addition to reducing the time to bring a claim, the new law also limits liability for violations of the Florida Building Code. A violation is now actionable only if the owner can prove that the code violation is “material.” This means that the defect must cause physical harm to a person or threaten “significant damage” to the building or systems. The effect of this change is to reduce accountability for complying with the Florida Building Code.
The obvious impact of these changes is to reduce the accountability of developers, builders, and design professionals for defective construction. For community associations, this means that the owners will bear the cost to remediate defective conditions.
The new law may lead to more claims against developer-appointed directors serving prior to the expiration of limitations and repose periods. Although appointed by the developer, such directors still have a fiduciary duty to the associations they serve.
Finally, community association management firms and law firms may also be exposed to greater liability. When employed by a developer-controlled board, management and law firms should be thoughtful about their responsibility to the association if the board ignores defective construction and fails to investigate complaints. Otherwise, claims may be asserted through member derivative lawsuits or by the post-turnover boards.
Founder, Ansbacher Law
Barry Ansbacher is the founder of Ansbacher Law. For over 30 years he has represented condominium and homeowner associations throughout Florida. He is a frequent author and speaker on community association and construction law. Mr. Ansbacher is the first and only attorney in Florida recognized by the Florida Bar as a board-certified specialist in real estate law, construction law, and condominium & planned development law. He is the current chair of the condominium and planned development law certification committee responsible for the examination and admission of board-certified lawyers. For more information, visit ansbacherlaw.com.