Wednesday, February 17, 2016

Trial & Litigation: Amendments to Florida’s Construction Defects Statute

By Jaret J. Fuente and Mark A. Smith

        On October 1, 2015, amendments to Chapter 558, Florida Statutes, the “Construction Defects” statute, went into effect. Originally created in 2003, Chapter 558 requires pre-suit notice and an opportunity to inspect and propose a resolution before to commencement of construction defect lawsuits. It is intended as an alternative method to resolve construction disputes and protect the rights of property owners. § 558.001, Fla. Stat.

        Although well-intended and capable at facilitating pre-suit dialogue, some of the statute's requirements have created confusion among practitioners in application. The legislature recently attempted to clarify the statute by amending it to provide as follows:

§ 558.001 (Legislative Findings & Declaration) – Amended to add insurers of contractors, subcontractors, suppliers, and design professionals as parties who should be provided an opportunity to resolve claims through confidential settlement negotiations before litigation.

§ 558.002 (Definitions) – Amended the definition of “Completion of a building or improvement” to mean the issuance of a certificate of occupancy, whether temporary or otherwise, that allows for occupancy or use of the entire building or improvement.

§ 558.004 (Notice and opportunity to repair)

  • Subsection (1) dealing with the subject of pre-suit notice was split into three parts (a, b, c), and part b now requires greater detail from claimants, providing that: "Based upon at least a visual inspection … the notice of claim must identify the location of each alleged construction defect sufficiently to enable the responding parties to locate the alleged defect without undue burden. The claimant has no obligation to perform destructive or other testing for purposes of this notice."
  • Subsection (4) now provides that: "The written response must include one or more of the offers or statements specified in paragraphs (5)(a)-(e), as chosen by the responding contractor, subcontractor, supplier, or design professional, with all of the information required for that offer or statement."
  • Subsection (13) now provides that providing a copy of a notice of claim to an insurer shall not constitute a claim for insurance purposes unless the terms of the policy specify otherwise.
  • Subsection (15) now includes among records to be exchanged upon request: photos and videos of the alleged construction defect identified in the notice of claim and maintenance records and other documents related to the discovery, investigation, causation, and extent of the alleged defect identified in the notice of claim and any resulting damages. It also now states: "A party may assert a claim of privilege … with respect to any of the disclosure obligations specified in this chapter."

        These changes should assist in requiring greater detail from claimants and providing clarity with respect to the nature of responses to be provided and documents to be exchanged. Time will tell if this ultimately renders the amended statute more effective.