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This most recent bill makes changes to, among other laws, Florida Statute 95.11(3), which sets forth certain requirements that property owners must meet in order to successfully bring lawsuits against builders for latent construction defects in the State.
First, the bill shortens from ten years to seven the statute of repose for filing a lawsuit based on the design, planning, or construction of an improvement to real property (i.e. a construction defect claim). The statute of repose date is the absolute latest date that a lawsuit can be filed, regardless of when the defect was discovered (but a plaintiff must also file suit within the applicable statute of limitations period).
Under the previous version of the law, the countdown clock on the statute of repose began to run on the later of certain triggering events. The new law not only narrows the triggering events to a few very specific events, it also provides that the clock begins to run on the earlier of those events. The new triggering events are: the issuance of: 1) a temporary certificate of occupancy (TCO), 2) a certificate of occupancy (CO), or 3) a certificate of completion; or the date of abandonment of construction if not completed.
For purposes of determining the start date for the statute of repose on a model home, the date of transfer of title from the builder to the first purchaser is considered, not the other triggering events listed above. And the new law also specifies that each individual dwelling unit or building in a multiple-building project will be considered separately for determining when the clock begins to run.
It defines “material violation” as a violation “…which may reasonably result, or has resulted, in physical harm to a person or significant damage to the performance of a building or its systems.”
Finally, all of the changes set out in SB 360 took effect on the date the bill was signed (April 13, 2023), and they apply to all construction defect lawsuits in Florida filed on or after the effective date. The new law does provide a short grace period, however, allowing plaintiffs until July 1, 2024 to file claims that would not have otherwise been time barred under the old version of 95.11(3)(c)), but that would be barred by the new version of the law.
While reduction in frivolous litigation and the prevention of certain predatory practices is a noble goal, one unintended consequence of these recent tort reform measures will almost certainly be a reduction in viable subrogation recovery opportunities. Property insurers who pay their insureds for losses due to the improper design or construction of the insured property will need to move more quickly than ever, assuming they are not already completely time-barred due to the shortened time periods.
All subrogation professionals should be aware of these recent and significant changes in the law in Florida, as well as other recent tort reforms recently implemented by the Florida Legislature.
Click here for a recent article on some of those other changes.
For any further questions, please contact Sean P. Ravenel.