December 1st, 2023
construction
FLORIDA DISTRICT COURT OF APPEAL HOLDS A SALE OF IMPROVED PROPERTY DOES NOT RESET THE REPOSE CLOCK

The Florida District Court of Appeals recently interpreted the statute of repose for construction claims in Westpark Preserve Homeowners Association, Inc. v. Pulte Home Corporation, 365 So. 3d 391 (Fla. Dist. Ct. App. 2023).  The Court held that in projects where an Owner/Developer sold units to initial purchasers, the repose period ran from the issuance of the certificate of occupancy, rejecting the argument that the initial sale was the trigger.

Westpark Preserve Homeowners Association, Inc. (“the Association”) sued Pulte Home Corporation (“Pulte”) over its construction of townhomes.  Pulte was the Owner/Developer and sold each individual townhome to initial purchasers.  The last Certificate of Occupancy was issued on January 9, 2009, but the last sale occurred much later.

Pulte sought summary judgment based on the statute of repose, codified at Florida Statutes § 95.11(3)(c), which states that any “action founded on the design, planning, or construction of an improvement to real property ... 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.”  The Association argued the date of actual possession by “the owner” did not refer to Pulte’s possession of the property as the developer, but rather the possession by the initial units’ purchaser after a “sale.”  The trial court sided with Pulte and the Association appealed.

The Appeals Court held the plain, unambiguous meaning of “owner” referred to “someone who has the right to possess, use, and convey something; a person in whom one or more interests are vested”. Accordingly, the Appeals Court found that Pulte was the “owner” and the trigger would be the issuance of the certificate of occupancy, not the subsequent sale of the individual units. The Court reasoned that to accept the Association’s argument, it would have to read “language [in]to the statute providing that an action may be commenced within ten years after the date the property is sold after the improvement is made or construction is complete,” not only betraying the plain meaning but defeating the purpose of the statute by exposing contractors, architects, and engineers to potential liability well after construction was completed.

This decision is a win for general contractors, and perhaps design professionals too, as it limits the specter of liability for construction, and potentially design, defects arising long after construction is completed. Had the Court accepted the initial purchaser theory advanced by the Association, the Certificate of Occupancy would have become immaterial and claims could exist long after a project was completed.

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