Florida Senate - 2022                       CS for CS for SB 736
       
       
        
       By the Committees on Community Affairs; and Judiciary; and
       Senator Hutson
       
       
       
       
       578-01974-22                                           2022736c2
    1                        A bill to be entitled                      
    2         An act relating to construction defect claims;
    3         amending s. 95.11, F.S.; defining terms; revising the
    4         limitations period for certain actions founded on the
    5         design, planning, or construction of an improvement on
    6         real property; amending s. 627.441, F.S.; conforming a
    7         cross-reference; amending s. 558.004, F.S.; requiring
    8         a claimant to include the reasons for rejecting an
    9         offer in a notice rejecting a settlement offer to
   10         remedy a construction defect; authorizing the person
   11         served with a notice rejecting a settlement offer to
   12         make a supplemental offer within a specified
   13         timeframe; providing notice requirements for a
   14         claimant who rejects a supplemental offer; requiring
   15         the court to stay an action if a claimant initiates an
   16         action without first accepting or rejecting a
   17         supplemental offer; limiting entitlement to attorney
   18         fees if a claimant rejects certain settlement offers
   19         to fully repair an alleged construction defect;
   20         requiring a claimant who accepts a certain offer to
   21         enter into a contract to complete repairs to remedy an
   22         alleged construction defect; requiring the offeror or
   23         insurer to pay the contractor or contractors directly
   24         for the repairs; prohibiting an offeror or insurer
   25         from requiring a claimant to advance payment for
   26         repairs; requiring that the repairs be completed
   27         within a specified timeframe; creating s. 558.0045,
   28         F.S.; requiring a court to appoint an expert to
   29         examine certain alleged construction defects and to
   30         prepare an examination report, under certain
   31         circumstances; requiring that the report contain
   32         specified information; requiring the parties to
   33         compensate the expert; prohibiting the expert from
   34         being employed to make repairs or from recommending
   35         contractors to make repairs; creating s. 558.0046,
   36         F.S.; requiring a claimant to repair a construction
   37         defect if the claimant receives compensation for an
   38         alleged construction defect from specified persons;
   39         providing that a claimant is liable for damages
   40         resulting from failure to disclose a construction
   41         defect to a purchaser of a property; providing
   42         applicability; providing an effective date.
   43          
   44  Be It Enacted by the Legislature of the State of Florida:
   45  
   46         Section 1. Paragraph (c) of subsection (3) of section
   47  95.11, Florida Statutes, is amended, and subsection (12) is
   48  added to that section, to read:
   49         95.11 Limitations other than for the recovery of real
   50  property.—Actions other than for recovery of real property shall
   51  be commenced as follows:
   52         (3) WITHIN FOUR YEARS.—
   53         (c) An action founded on the design, planning, or
   54  construction of an improvement to real property, with the time
   55  running from the date of actual possession by the owner, the
   56  date of the issuance of a certificate of occupancy, the date of
   57  abandonment of construction if not completed, or the date of
   58  completion of the contract or termination of the contract
   59  between the professional engineer, registered architect, or
   60  licensed contractor and his or her employer, whichever date is
   61  latest; except that, when the action involves a latent defect,
   62  the time runs from the time the defect is discovered or should
   63  have been discovered with the exercise of due diligence. In any
   64  event, the action must be commenced within 10 years after the
   65  date of actual possession by the owner, the date of the issuance
   66  of a certificate of occupancy, the date of abandonment of
   67  construction if not completed, or the date of completion of the
   68  contract or termination of the contract between the professional
   69  engineer, registered architect, or licensed contractor and his
   70  or her employer, whichever date is latest. However,
   71  counterclaims, cross-claims, and third-party claims that arise
   72  out of the conduct, transaction, or occurrence set out or
   73  attempted to be set out in a pleading may be commenced up to 1
   74  year after the pleading to which such claims relate is served,
   75  even if such claims would otherwise be time barred. With respect
   76  to actions founded on the design, planning, or construction of
   77  an improvement to real property, if such construction is
   78  performed pursuant to a duly issued building permit and if a
   79  local enforcement agency, state enforcement agency, or special
   80  inspector, as those terms are defined in s. 553.71, has issued a
   81  final certificate of occupancy or certificate of completion,
   82  then as to the construction which is within the scope of such
   83  building permit and certificate, the correction of defects to
   84  completed work or repair of completed work, whether performed
   85  under warranty or otherwise, does not extend the period of time
   86  within which an action must be commenced. Completion of the
   87  contract means the later of the date of final performance of all
   88  the contracted services or the date that final payment for such
   89  services becomes due without regard to the date final payment is
   90  made.
   91         (12)ACTIONS RELATING TO AN IMPROVEMENT TO REAL PROPERTY.—
   92         (a) Definitions.—As used in this subsection, the term:
   93         1. “Category 1 improvement” includes a detached single
   94  family home, including a manufactured home, or a standalone
   95  building or structure, intended for use by a single business,
   96  occupant, or owner, not exceeding three stories in height and
   97  related improvements to such homes, buildings, or structures.
   98         2. “Category 2 improvement” includes a single-family
   99  dwelling unit not exceeding three stories in height which is
  100  constructed in a series or group of attached units or a
  101  commercial or nonresidential building not exceeding three
  102  stories in height and related improvements to such dwellings,
  103  buildings, or structures.
  104         3. “Category 3 improvement” includes commercial or
  105  residential buildings or structures of four or more stories in
  106  height and related improvements to such buildings or structures.
  107         4. “Category 4 improvement” includes an improvement that is
  108  not a category 1 improvement, category 2 improvement, or
  109  category 3 improvement.
  110         5.“Completion of the contract” means the later of the date
  111  of final performance of all the contracted services or the date
  112  that final payment for such services becomes due without regard
  113  to the date final payment is made.
  114         (b)Running of time to commence action.—An action founded
  115  on the design, planning, or construction of an improvement to
  116  real property must be commenced within the timeframes set forth
  117  in this section or the action is time barred.
  118         1. The time to commence the action runs from the date of
  119  actual possession by the owner, the date of the issuance of a
  120  certificate of occupancy, the date of abandonment of
  121  construction if not completed, or the date of completion of the
  122  contract or termination of the contract between the professional
  123  engineer, registered architect, or licensed contractor and his
  124  or her employer, whichever date is earliest.
  125         2. Counterclaims, cross-claims, and third-party claims that
  126  arise out of the conduct, transaction, or occurrence set out or
  127  attempted to be set out in a pleading may be commenced up to 1
  128  year after the pleading to which such claims relate is served,
  129  even if such claims would otherwise be time barred.
  130         3. If the action is based on construction that is performed
  131  pursuant to a duly issued building permit and if a local
  132  enforcement agency, state enforcement agency, or special
  133  inspector, as those terms are defined in s. 553.71, has issued a
  134  final certificate of occupancy or certificate of completion,
  135  then as to the construction which is within the scope of such
  136  building permit and certificate, the correction of defects to
  137  completed work or repair of completed work, whether performed
  138  under warranty or otherwise, does not extend the period of time
  139  within which an action must be commenced.
  140         (c) Limitations and repose periods.
  141         1. An action founded on the design, planning, or
  142  construction of an improvement to real property may be commenced
  143  within 4 years after the time to commence an action begins to
  144  run.
  145         2. An action involving a latent defect may be commenced
  146  within 4 years after the facts giving rise to the cause of
  147  action are discovered or should have be discovered through the
  148  exercise of due diligence. However, the action may not be
  149  commenced more than 5 years after the time for commencing an
  150  action begins to run for a category 1 improvement, 7 years for a
  151  category 2 improvement, and 10 years for a category 3 or
  152  category 4 improvement.
  153         Section 2. Subsection (2) of section 627.441, Florida
  154  Statutes, is amended to read:
  155         627.441 Commercial general liability policies; coverage to
  156  contractors for completed operations.—
  157         (2) A liability insurer must offer coverage at an
  158  appropriate additional premium for liability arising out of
  159  current or completed operations under an owner-controlled
  160  insurance program for any period beyond the period for which the
  161  program provides liability coverage, as specified in s.
  162  255.0517(2)(b). The period of such coverage must be sufficient
  163  to protect against liability arising out of an action brought
  164  within the time limits provided in s. 95.11(12) s. 95.11(3)(c).
  165         Section 3. Present subsections (8) through (15) of section
  166  558.004, Florida Statutes, are redesignated as subsections (9)
  167  through (16), respectively, a new subsection (8) is added to
  168  that section, and paragraph (c) of subsection (1) and subsection
  169  (7) of that section are amended, to read:
  170         558.004 Notice and opportunity to repair.—
  171         (1)
  172         (c) The claimant shall endeavor to serve the notice of
  173  claim within 15 days after discovery of an alleged defect, but
  174  the failure to serve notice of claim within 15 days does not bar
  175  the filing of an action, subject to s. 558.003. This subsection
  176  does not preclude a claimant from filing an action sooner than
  177  60 days, or 120 days as applicable, after service of written
  178  notice as expressly provided in subsection (6), subsection (7),
  179  or subsection (9) (8).
  180         (7)(a) A claimant who receives a timely settlement offer
  181  must accept or reject the offer by serving written notice of
  182  such acceptance or rejection on the person making the offer
  183  within 45 days after receiving the settlement offer.
  184         (b)If the claimant rejects the settlement offer, the
  185  claimant must include the reasons for rejecting the offer in the
  186  notice rejecting the offer. If the claimant believes that the
  187  settlement offer omitted reference to any portion of the claim
  188  or was unreasonable in any manner, the claimant must include in
  189  the notice the items that the claimant believes were omitted and
  190  state in detail all known reasons why the claimant believes the
  191  settlement offer is unreasonable.
  192         (c)Upon receipt of a claimant’s notice of rejection and
  193  the reasons for such rejection, the person served with the
  194  rejection, within 15 days after receipt of the notice, may make
  195  a supplemental offer of repair or monetary payment, or both, to
  196  the claimant.
  197         (d)If the claimant rejects a supplemental offer to repair
  198  the construction defect or to settle the claim by monetary
  199  payment or a combination of both, the claimant must serve
  200  written notice of the claimant’s rejection on the person making
  201  the supplemental offer. The notice must include all known
  202  reasons for the claimant’s rejection of the supplemental
  203  settlement offer.
  204         (e) If a claimant initiates an action without first
  205  accepting or rejecting the offer or supplemental offer, the
  206  court shall stay the action upon timely motion until the
  207  claimant complies with this subsection.
  208         (8)(a) If the claimant rejects a timely settlement offer or
  209  supplemental offer provided to remedy the alleged construction
  210  defect at no cost to the claimant, in any action brought for
  211  that defect, the claimant may not recover attorney fees from the
  212  offeror on any basis unless the claimant proves by a
  213  preponderance of the evidence that, at the time of the offer,
  214  additional repairs beyond those offered were necessary to remedy
  215  the defect. This paragraph does not apply to any claim for
  216  attorney fees based on a contract between the claimant and the
  217  offeror.
  218         (b) If a claimant accepts an offer made pursuant to
  219  paragraph (5)(b), paragraph (5)(c), or paragraph (5)(e) or a
  220  supplemental offer made pursuant to paragraph (7)(c), the
  221  claimant must, within 90 days after the acceptance, enter into a
  222  contract with one or more appropriately licensed contractors to
  223  complete the repairs necessary to remedy the alleged
  224  construction defect. The offeror or insurer shall pay directly
  225  to the contractor or contractors, from the accepted monetary
  226  payment, the amounts necessary to begin and to continue the
  227  repairs as the work is performed and expenses are incurred. The
  228  offeror or insurer may not require the claimant to advance
  229  payment for the repairs. The repairs must be completed within 12
  230  months after the claimant enters into the contract for repairs,
  231  absent mutual agreement between the offeror or insurer and the
  232  claimant.
  233         Section 4. Section 558.0045, Florida Statutes, is created
  234  to read:
  235         558.0045 Construction defect actions; attorney fees and
  236  costs.—
  237         (1) In a civil action alleging a construction defect, the
  238  court shall appoint an engineer, a contractor, a building code
  239  inspector, or another expert having experience in the type of
  240  construction that is the basis of the claimant’s claim to
  241  examine the alleged defect or, if repairs have been made, any
  242  evidence of the alleged defect. However, the court may not
  243  appoint an expert if all of the parties object or if the court
  244  finds that the costs of an expert outweigh any potential
  245  benefits to the resolution of the action. If an expert is
  246  appointed, the expert must coordinate and communicate with the
  247  parties as directed by the court. Within 15 days after
  248  conducting the examination, or as otherwise determined by the
  249  court, the expert shall submit a written report to the court for
  250  its consideration and to the parties which contains the expert’s
  251  findings. The report must do all of the following:
  252         (a) Describe how the expert conducted the examination of
  253  the alleged defect.
  254         (b) Identify persons present at the site of the improvement
  255  while the expert conducted the examination.
  256         (c) Include photographs or other documentation of the
  257  alleged defect including any relevant test results.
  258         (d) State whether the damages claimed by the claimant are
  259  more likely than not the result of a construction defect,
  260  another identified cause, or a construction defect and another
  261  identified cause.
  262         (e) Address other matters related to the alleged defect as
  263  directed by the court.
  264         (2) If the expert concludes that the damages are wholly or
  265  partially the result of a construction defect, the report must
  266  state the actions necessary to repair the defect and any repairs
  267  related to the defect, provide an estimate of the reasonable
  268  cost of repairs, and state the anticipated time needed for
  269  repairs under the current market conditions for construction
  270  services and materials.
  271         (3) The parties shall compensate the expert, but the
  272  prevailing party is entitled to reimbursement from the
  273  nonprevailing party.
  274         (4) An expert appointed by the court under this section may
  275  not be employed to repair the alleged defect or recommend
  276  contractors to repair the defect.
  277         Section 5. Section 558.0046, Florida Statutes, is created
  278  to read:
  279         558.0046 Duty to repair construction defect.—If a claimant
  280  receives compensation for an alleged construction defect from a
  281  contractor, a subcontractor, a supplier, a design professional,
  282  or an insurer, the claimant must repair the defect. A claimant
  283  who receives compensation and fails to fully repair the defect
  284  is liable to a purchaser of the property for any damages
  285  resulting from the failure to disclose the defect.
  286         Section 6. (1) The amendments by this act to s.
  287  95.11(3)(c), Florida Statutes, apply to any action commenced on
  288  or after July 1, 2022, regardless of when the cause of action
  289  accrued. However, any action that would not have been barred
  290  under s. 95.11(3)(c), Florida Statutes, before the amendments
  291  made by this act to that section may be commenced before July 1,
  292  2023. If such action is not commenced by July 1, 2023, and is
  293  barred by the amendments made by this act to s. 95.11(3)(c),
  294  Florida Statutes, the action is barred.
  295         (2) Sections 3 through 5 of this act apply to compensation
  296  for construction defects received on or after July 1, 2022, and
  297  to civil actions and proceedings for a construction defect which
  298  are initiated on or after July 1, 2022.
  299         Section 7. This act shall take effect July 1, 2022.