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; amending s. 718.618, F.S.,
6	relating to converter reserve accounts and warranties;
7	limiting applicability to certain improvements; providing
8	an effective date.
9
10	WHEREAS, architects, engineers, and contractors of an
11	improvement to real property may find themselves named as
12	defendants in a damage suit many years after the improvement was
13	completed and occupied, and
14	WHEREAS, to permit the bringing of such actions without an
15	appropriate limitation as to time places the defendant in an
16	unreasonable, if not impossible, position with respect to
17	asserting a defense, and
18	WHEREAS, architects, engineers, and contractors have no
19	control over an owner whose neglect in maintaining an
20	improvement may cause dangerous or unsafe conditions to develop
21	over a period of years, who uses an improvement for purposes for
22	which it was not designed, or who makes alterations or changes
23	that, years afterward, may be determined to be unsafe or
24	defective and that may appear to be a part of the original
25	improvement, and
26	WHEREAS, liability insurance for the engineer, architect,
27	or contractor is more difficult and more expensive to obtain the
28	longer he or she is exposed to potential liability after an
29	improvement to real property has been completed, and
30	WHEREAS, Florida currently limits the liability exposure of
31	architects, engineers, and contractors to a period of 15 years
32	after completion of an improvement to real property, and
33	WHEREAS, liability insurance coverage is increasingly
34	difficult and more expensive to acquire to cover a period of
35	more than 10 years after an improvement to real property is
36	completed, especially for small and medium-sized architecture,
37	engineering, and construction firms, and
38	WHEREAS, liability insurance coverage for work on
39	residential construction projects, such as condominiums, is
40	generally not available to cover a period of more than 10 years
41	after the improvement to real property is completed, and
42	WHEREAS, the increased cost of such insurance coverage and
43	liability exposure adds to the total cost of construction and is
44	ultimately borne by residential and commercial property owners,
45	and
46	WHEREAS, Florida's current 15-year limit on liability is
47	considerably longer than most other states, some of which have
48	adopted limits as low as 5 years and most of which have adopted
49	a 10-year limit, and
50	WHEREAS, the best interest of the people of the state will
51	be served by reducing the period of time an engineer, architect,
52	or contractor may be exposed to potential liability after an
53	improvement has been completed, and
54	WHEREAS, a recent increase in the conversion of completed
55	or partially completed buildings to condominiums has caused
56	confusion regarding the scope of the warranties specified in
57	sections 718.203 and 718.618, Florida Statutes, and necessitates
58	the clarification of these statutes, NOW, THEREFORE,
59
60	Be It Enacted by the Legislature of the State of Florida:
61
62	Section 1.  Paragraph (c) of subsection (3) of section
63	95.11, Florida Statutes, is amended to read:
64	95.11  Limitations other than for the recovery of real
65	property.--Actions other than for recovery of real property
66	shall be commenced as follows:
67	(3)  WITHIN FOUR YEARS.--
68	(c)  An action founded on the design, planning, or
69	construction of an improvement to real property, with the time
70	running from the date of actual possession by the owner, the
71	date of the issuance of a certificate of occupancy, the date of
72	abandonment of construction if not completed, or the date of
73	completion or termination of the contract between the
74	professional engineer, registered architect, or licensed
75	contractor and his or her employer, whichever date is latest;
76	except that, when the action involves a latent defect, the time
77	runs from the time the defect is discovered or should have been
78	discovered with the exercise of due diligence. In any event, the
79	action must be commenced within 10 15 years after the date of
80	actual possession by the owner, the date of the issuance of a
81	certificate of occupancy, the date of abandonment of
82	construction if not completed, or the date of completion or
83	termination of the contract between the professional engineer,
84	registered architect, or licensed contractor and his or her
85	employer, whichever date is latest.
86	Section 2.  Subsection (9) is added to section 718.618,
87	Florida Statutes, to read:
88	718.618  Converter reserve accounts; warranties.--
89	(9)  This section applies only to the conversion of
90	existing improvements where construction of the improvement was
91	commenced prior to its designation by the developer as a
92	condominium. In such circumstances, s. 718.203 does not apply.
93	Section 3.  The amendments to s. 95.11(3)(c), Florida
94	Statutes, made by this act shall apply to any action commenced
95	on or after July 1, 2006, regardless of when the cause of action
96	accrued, except that any action that would not have been barred
97	under s. 95.11(3)(c), Florida Statutes, prior to the amendments
98	made by this act may be commenced before July 1, 2007, and if it
99	is not commenced by that date and is barred by the amendments to
100	s. 95.11(3)(c), Florida Statutes, made by this act, it shall be
101	barred.
102	Section 4.  This act shall take effect July 1, 2006.

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