HB 1089

CS

CHAMBER ACTION

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

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