Last summer, Florida Governor Scott signed a new bill into law which made important amendments to the statute of limitations for construction contracts. Under the previous statute, actions based upon the design, planning, or construction of an improvement to real property were required to be commenced within four years of an alleged construction defect. That date began to run on the date of any one of the following instances:
- Actual Possession of the owner
- Issuance of the certificate of occupancy
- Abandonment if not completed
- Completion or termination of the contract between the employer and the engineer, architect, or contractor
Also, If the action involved a latent (or hidden) defect, then the time ran from the time the defect was discovered or should have been discovered with the exercise of due diligence.
According to the Florida Fifth District Court of Appeal, “completion of the contract” was defined as the date on which final payment was actually made to the contractor. Cypress Fairway Condominium v. Bergeron Construction Co, Inc., 2014 WL 7638954 (Fla. App. 5 Dist.). This format was troublesome as a customer could extend a contractor’s liability for construction defects by delaying final payment. Additionally, if a defect was never discovered, and an owner had never made final payment, arguably the statute of limitations for such claims could be extended forever.
The updated statute provides a more specific definition for “completion of the contract.” Under the new law, completion of the contract is defined as 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.” For construction firms, the bill provides greater certainty with regard to the completion of the statute of limitations for construction defect claims. The attorneys at Rock Fusco & Connelly are committed to staying up to date with construction law. Furthermore, we are experienced with construction contracts and ready to assist clients in ensuring their contracts include clear and specific provisions regarding completion and payment.