We are frequently retained by homeowners associations and condominium associations who have just undergone transition/turnover from developer control to control by the unit owners other than the developer. Two of the first questions we ask them are 1) what amenities and other common elements does the association own or is it required to maintain; and 2) has the association, in consultation with an engineer or other expert, inspected the common elements to ensure they are free from defects? We ask these questions right up front during our initial consultation because of Florida’s Statute of Limitations and Statute of Repose, which limit the time within which the Association may pursue recovery of expenses for needed repairs to the common elements from the developer or other individuals or entities arising from the improper design or construction. (Note: Applicable Statutes of Limitations and Repose differ according to the nature of the claim – this article focuses only on construction and design defect claims).
Florida’s Statute of Limitations and Statute of Repose for construction and design defect claims are each contained in § 95.11(3)(c), Florida Statutes, which provides, in relevant part:
Actions other than for recovery of real property shall be commenced as follows:
(3) WITHIN FOUR YEARS.-
(c) An action founded on the design, planning, or construction of an improvement to real property, with the time running from the date of actual possession by the owner, the date of the issuance of a certificate of occupancy, the date of abandonment of construction if not completed, or the date of completion of the contract or termination of the contract between the professional engineer, registered architect, or licensed contractor and his or her employer, whichever date is latest; except that, when the action involves a latent defect, the time runs from the time the defect is discovered or should have been discovered with the exercise of due diligence. In any event, the action must be commenced within 10 years after the date of actual possession by the owner, the date of the issuance of a certificate of occupancy, the date of abandonment of construction if not completed, or the date of completion of the contract or termination of the contract between the professional engineer, registered architect, or licensed contractor and his or her employer, whichever date is latest. …
§ 95.11(3)(c) acts as a “Statute of Limitations” to bar claims from being filed more than four years after the cause of action accrues, which for latent (hidden) defects begins to run “from the time the defect is discovered or should have been discovered with the exercise of due diligence.”
§ 95.11(3)(c) acts as a “Statute of Repose” to bar claims more than ten years after the events specified in the statute – generally, the completion of the construction project. Although the Statute of Limitations and Statute of Repose have similar functions, they are distinct concepts and differ in substantial ways. Perhaps most importantly in this instance, the running of the Statute of Repose is not dependent on the discovery of latent defects. See Bauld v. J.A. Jones Constr. Co., 357 So.2d 401 (Fla. 1978).
Fortunately, for condominiums, § 718.124, Florida Statutes, tolls – delays the running of – the Statute of Limitations as to any actions until the unit owners other than the developer have elected a majority of directors (i.e., turnover). However, Chapter 720 does not similarly toll the Statute of Limitations for homeowners associations. Moreover, even though § 718.124 tolls the Statute of Limitations for condominiums, it does not toll the Statute of Repose. Sabal Chase Homeowners Ass’n, Inc. v. Walt Disney World Co., 726 So.2d 796 (Fla. 3d DCA 1999).
The expiration of either the Statute of Limitation or Statute of Repose act as a complete bar to a claim, regardless of the merits of the claim or the amount of damage sustained by the homeowners or condominium association and its members. As such, it is imperative that the association review any possible claims and consult with counsel as quickly as possible after transition/turnover from developer control to ensure any claims are filed timely.
If you have any questions, please contact Clinton S. Morrell by email at firstname.lastname@example.org or by phone at (813) 227-2224.
An attorney in the firm’s Litigation practice group, Clinton practices primarily in the areas of homeowners association (HOA) and condominium law. He also has experience in other practice areas, including general commercial litigation and construction defect claims.