The nightmare of any commercial real estate owner is discovering construction defects in one of their buildings. Construction defects such as unstable structural integrity, electrical issues, poor thermal protection, as well as water and moisture intrusion, can potentially endanger the lives of the building’s occupants. They can also cost the owner much money to address.
Commercial property owners may be able to recoup their costs through a lawsuit, but a new Florida bill is making the process more challenging.
Senate Bill 360, effective April this year, shortens the time limit for property owners to file construction defect claims from ten to seven years. The law also applies to insurers, who can bring construction defect subrogation lawsuits if an insured property owner suffers related damages.
Not only does the bill shorten the timeframe to file a construction defect lawsuit, but it also changes when the timeframe starts. Previously, lawsuits could be filed ten years from when the owner took possession of the building or when the contractor fulfills its building contract. But Senate Bill 360 now makes the clock start ticking from the earliest of a certificate of occupancy or completion. This can hurt subsequent building owners like condominium associations since a developer takes up to seven years to turn over the property from completion.
Does the bill change the way property owners file claims?
The bill doesn’t make any more changes to the process. So, property owners still have to send notices of claim to the contractor, subcontractor, designer or supplier responsible at least 60 days before they can file a lawsuit. Commercial building owners must also send the notices within 15 days after discovering the defect.
Because of the added complexity of construction defect lawsuits, property owners planning to file a claim – whether their lawsuit falls within the specified timeframe or not – might want to consult a legal professional for advice on their case.