In Busch v. Lennar Homes, LLC, No. 5D16-1626, 2017 WL 1372085 (Fla. Dist. Ct. App. April 13, 2017), Florida’s Fifth District Court of Appeals found the trial court improperly dismissed the Homeowner’s complaint regarding construction defects based on the ten year statute of repose.  The Court determined the Homeowner’s complaint was not barred by the ten year statute of repose, because the purchase contract contained a provision allowing the builder to correct defects within a reasonable time after closing and the complaint did not conclusively establish that such repair work did not occur.

In Busch, the Homeowner entered into a Purchase and Sale Agreement with Lennar Homes, LLC.  The Homeowner served a Chapter 558 notice on Builder almost ten years after closing on the home alleging the existence of several construction defects.  Soon after serving this notice, but more than ten years after closing, Homeowner’s filed a complaint against the Builder. 

The Builder filed a motion to dismiss Homeowner’s complaint relying on Fla. Stat. § 95.11(3)(c).  Fla. Stat. § 95.11(3)(c) states that an action based on construction defects “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, . . . or the date of completion or termination of the contract between the professional engineer, registered architect, or licensed contractor and his or her employer, whichever date is latest.” 

The Builder argued the Contract was completed at closing and, therefore, the complaint was barred by the statute of repose. The trial court agreed and dismissed the Homeowner’s complaint.  The Homeowner appealed, arguing the complaint did not establish the Contract was complete upon closing, because the builder had the obligation to make repairs after closing.

The Florida District Court of Appeals reversed the trial court’s judgment.  The Court determined that because the Contract contained a provision allowing the Builder to correct defects after closing, and the complaint did not allege that no work occurred after closing, there was a question as to when the work was “complete.” The contract provision allowing for the Builder to correct defects after closing “expressly contemplated that closing could occur even if work required by the contract remained incomplete.”  Therefore, the Court reversed the dismissal of the Homeowner’s complaint, because there was a chance that work occurred after the closing, and the ten year statute of repose was not triggered until that work was complete.

This case reminds builders and contractors that they are not automatically free from construction defect claims ten years after closing on a home or completing construction.  If a contract contains a provision like the one in this case, then a builder or contractor may be liable for construction defect claims more than ten years after closing if additional work was performed after closing.  Builders and contractors should ensure the language in their contracts is clear and specific as to when the contract will be complete and make an effort to document the date on which completion occurs.