HB 1089

1	A bill to be entitled
2	An act relating to construction contracting; amending s.
3	95.11, F.S.; revising commencement periods for actions
4	founded on the design, planning, or construction of
5	improvements to real property; providing application;
6	amending s. 718.203, F.S.; requiring implied warranties of
7	fitness for certain materials and work with respect to
8	condominiums to be specified by contract; providing that
9	the warranty applies only to certain buildings or
10	improvements; amending s. 718.618, F.S., relating to
11	converter reserve accounts and warranties; limiting
12	applicability to certain improvements; providing an
13	effective date.
14
15	WHEREAS, architects, engineers, and contractors of an
16	improvement to real property may find themselves named as
17	defendants in a damage suit many years after the improvement was
18	completed and occupied, and
19	WHEREAS, to permit the bringing of such actions without an
20	appropriate limitation as to time places the defendant in an
21	unreasonable, if not impossible, position with respect to
22	asserting a defense, and
23	WHEREAS, architects, engineers, and contractors have no
24	control over an owner whose neglect in maintaining an
25	improvement may cause dangerous or unsafe conditions to develop
26	over a period of years, who uses an improvement for purposes for
27	which it was not designed, or who makes alterations or changes
28	that, years afterward, may be determined to be unsafe or
29	defective and that may appear to be a part of the original
30	improvement, and
31	WHEREAS, liability insurance for the engineer, architect,
32	or contractor is more difficult and more expensive to obtain the
33	longer he or she is exposed to potential liability after an
34	improvement to real property has been completed, and
35	WHEREAS, Florida currently limits the liability exposure of
36	architects, engineers, and contractors to a period of 15 years
37	after completion of an improvement to real property, and
38	WHEREAS, liability insurance coverage is increasingly
39	difficult and more expensive to acquire to cover a period of
40	more than 10 years after an improvement to real property is
41	completed, especially for small and medium-sized architecture,
42	engineering, and construction firms, and
43	WHEREAS, liability insurance coverage for work on
44	residential construction projects, such as condominiums, is
45	generally not available to cover a period of more than 10 years
46	after the improvement to real property is completed, and
47	WHEREAS, the increased cost of such insurance coverage and
48	liability exposure adds to the total cost of construction and is
49	ultimately borne by residential and commercial property owners,
50	and
51	WHEREAS, Florida's current 15-year limit on liability is
52	considerably longer than most other states, some of which have
53	adopted limits as low as 5 years and most of which have adopted
54	a 10-year limit, and
55	WHEREAS, the best interest of the people of the state will
56	be served by reducing the period of time an engineer, architect,
57	or contractor may be exposed to potential liability after an
58	improvement has been completed, and
59	WHEREAS, a recent increase in the conversion of completed
60	or partially completed buildings to condominiums has caused
61	confusion regarding the scope of the warranties specified in
62	sections 718.203 and 718.618, Florida Statutes, and necessitates
63	the clarification of these statutes, NOW, THEREFORE,
64
65	Be It Enacted by the Legislature of the State of Florida:
66
67	Section 1.  Paragraph (c) of subsection (3) of section
68	95.11, Florida Statutes, is amended to read:
69	95.11  Limitations other than for the recovery of real
70	property.--Actions other than for recovery of real property
71	shall be commenced as follows:
72	(3)  WITHIN FOUR YEARS.--
73	(c)  An action founded on the design, planning, or
74	construction of an improvement to real property, with the time
75	running from the date of actual possession by the owner, the
76	date of the issuance of a certificate of occupancy, the date of
77	abandonment of construction if not completed, or the date of
78	completion or termination of the contract between the
79	professional engineer, registered architect, or licensed
80	contractor and his or her employer, whichever date is earliest
81	latest; except that, when the action involves a latent defect,
82	the time runs from the time the defect is discovered or should
83	have been discovered with the exercise of due diligence. In any
84	event, the action must be commenced within 10 15 years after the
85	date of actual possession by the owner, the date of the issuance
86	of a certificate of occupancy, the date of abandonment of
87	construction if not completed, or the date of completion or
88	termination of the contract between the professional engineer,
89	registered architect, or licensed contractor and his or her
90	employer, whichever date is earliest latest.
91	Section 2.  Subsections (2) and (6) of section 718.203,
92	Florida Statutes, are amended to read:
93	718.203  Warranties.--
94	(2)  The contractor, and all subcontractors and suppliers,
95	grant to the developer and to the purchaser of each unit implied
96	warranties of fitness as to the work performed or materials
97	supplied by them, as such work or materials are specified in
98	their respective contracts and any amendments thereto, as
99	follows:
100	(a)  For a period of 3 years from the date of completion of
101	construction of a building or improvement, a warranty as to the
102	roof and structural components of the building or improvement
103	and mechanical and plumbing elements serving a building or an
104	improvement, except mechanical elements serving only one unit.
105	(b)  For a period of 1 year after completion of all
106	construction, a warranty as to all other improvements and
107	materials.
108	(6)  The warranty provided for in subsection (2) applies
109	only to a building or improvement that was designated as a
110	condominium by the developer in its construction contract with
111	the contractor or any amendment thereto executed by the parties.
112	Nothing in this section affects a condominium as to which rights
113	are established by contracts for sale of 10 percent or more of
114	the units in the condominium by the developer to prospective
115	unit owners prior to July 1, 1974, or as to condominium
116	buildings on which construction has been commenced prior to July
117	1, 1974.
118	Section 3.  Subsection (9) is added to section 718.618,
119	Florida Statutes, to read:
120	718.618  Converter reserve accounts; warranties.--
121	(9)  This section applies only to the conversion of
122	existing improvements where construction of the improvement was
123	commenced prior to its designation by the developer as a
124	condominium. In such circumstances, s. 718.203 does not apply.
125	Section 4.  The amendments to s. 95.11(3)(c), Florida
126	Statutes, made by this act shall apply to any action commenced
127	on or after July 1, 2006, regardless of when the cause of action
128	accrued, except that any action that would not have been barred
129	under s. 95.11(3)(c), Florida Statutes, prior to the amendments
130	made by this act may be commenced before July 1, 2007, and if it
131	is not commenced by that date and is barred by the amendments to
132	s. 95.11(3)(c), Florida Statutes, made by this act, it shall be
133	barred.
134	Section 5.  This act shall take effect July 1, 2006.

CODING: Words stricken are deletions; words underlined are additions.