Community Associations – Timely Initiation Of Section 558 Construction Defect Claims

Introduction

Mr. Andrew Cuevas, Esq., is the President of Cuevas, Garcia & Torres, P.A., and Vantage Property Title Company. Cuevas, Garcia & Torres, P.A., provides legal services in the areas of Community Association Law, Corporate Law, Real Estate law, and Business Immigration, including title insurance services through Vantage Property Title Company. If you have any questions regarding this article or any other questions, you may contact Mr. Cuevas at (407) 992-2251 / (305) 461-9500 or via e-mail at [email protected]. If you are interested in reading previous newsletters, please visit www.cuevaslaw.com, select the icon for Newsletters, and then choose the area of law you are interested in.

For members of the Board of Directors and for Community Association Managers, timely pursuing a Section 558 construction defect claim is of vital importance. A failure to timely pursue a claim may cost your association a large amount of money. These amounts could only thereafter be recovered by actually assessing the association members for amounts which should have been paid by the contractor which caused the construction defect in the first place. The Board, by failing to act timely, may accidently waive its claims against a contractor or a Developer for not initiating “proceedings” on a timely basis.

In the case of Gindel v. Centex Homes, 267 So. 3d 403, (Fla. 4th DCA, September 12, 2018), the court addressed when a “proceeding” actually begins for purposes of timely initiating a construction defect claim and avoiding having waived such claim. The homeowners purchased their homes from Centex on March 31, 2004. On February 6, 2014, the homeowners provided pre-suit notice pursuant to Florida Statute Chapter 558 of construction defects to Centex (latent defects that were discovered by the homeowners). The trial court found that since the homeowners actually filed suit after the expiration of the ten-year period of statute of repose, the trial court granted summary judgment for Centex. The appellate court reversed the lower court ruling. Below is the analysis.

Section 95.11(3), Florida Statutes addresses the time limitation by when a proceeding must be filed in order for it to be considered timely, including when the defect is later discovered, i.e., a latent defect. Section 95.11(3)(c) states as follows:

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. (emphasis added.

The trial court’s ruling was appealed by the homeowner, which resulted in the District Court of Appeal reversing the lower court’s ruling and remanding the matter to the trial court for further proceedings. An “action” under the statute of repose, §95.11(3) is defined in §95.011 as “a civil action or proceeding …“. The construction defect pre-suit notice under Section 558.004, Florida Statutes, is a “proceeding“. Therefore, so long as the pre-suit notice was delivered before the expiration of the 10-year statute of repose, it was irrelevant that the homeowners filed the actual complaint with the court after the ten-year limitation, which therefore allowed for the homeowner to continue its action against Centex.

This article is solely a partial explanation of all the issues related to the topic of this newsletter, and is not to be considered legal advice. Associations should seek legal advice for all issues related to this article. This Newsletter is for informational purposes only and should not be relied upon as a legal opinion.