On June 14, 2017, Governor Rick Scott signed HB 377, making it law effective July 31, 2017. HB 377 relates to the 10-year statute of repose relative to construction defect claims. The statute repose is the absolute bar precluding claims for construction defects on projects 10-years-old or older. Specifically, Fla. Stat. §95.11(3)(c) states that, regardless of the latency of a defect, no claim for construction defects can be asserted if brought beyond ten (10) years of the latest of actual possession by the owner, issuance of a certificate of occupancy, abandonment of construction, or completion of the contract. “Completion of the contract” had, for many years, gone undefined and was the subject of much litigation and arguably opened the construction industry to claims beyond the ten (10) year statute of repose. Then, in 2015, a Florida Court in Cypress Fairway Condominium v. Bergeron Construction Co., Inc., 164 So.3d 706 (Fla. 5th DCA 2015) defined “completion of the contract” as the date the owner issued final payment. But what happens in cases where the owner endlessly negotiates final payment, refuses to make the final payment, or cannot make final payment? Arguably, the statute of repose would lag on and on to the detriment of the contractor in those circumstances. The Cypress Condominium case would also arguably allow unscrupulous owners to intentionally withhold final payment simply to extend the statute of repose on any potential defect claims.
HB377, now codified in Fla. Stat. §95.11(3)(c) (2017), defines “completion of the contract” as the later of the date of final performance of all contracted services or the date that final payment for such services becomes due without regard to the date final payment is made. In other words, “completion of the contract” is now triggered by the contractor, not the owner. The new statute applies to all claims that accrue on or after July 1, 2017. This definition is far more equitable to contractors in Florida and we are pleased to see its passage and signing into law by Governor Scott.
If you are in the construction industry and have any questions about HB 377 or your construction project, please feel free to contact me at email@example.com.