CS for CS for CS for SB 736                      First Engrossed
    1                        A bill to be entitled                      
    2         An act relating to construction defect and building
    3         code violation claims; amending s. 95.11, F.S.;
    4         revising the limitations period for certain actions
    5         founded on the design, planning, or construction of an
    6         improvement to real property; defining the terms
    7         “completion of an improvement” and “single family
    8         residence”; amending s. 553.84, F.S.; defining terms;
    9         revising the circumstances under which a person has a
   10         cause of action for a violation of the Florida
   11         Building Code; providing construction; amending s.
   12         558.004, F.S.; requiring a notice of claim to include
   13         an inspection report that is verified by the person
   14         conducting the inspection; specifying the required
   15         contents of the report; providing that a bad faith
   16         preparation of an inspection report constitutes
   17         grounds for discipline; specifying that the claimant
   18         and the person preparing the inspection report do not
   19         have an obligation to perform certain testing;
   20         requiring a claimant to include the reasons for
   21         rejecting an offer in a notice rejecting a settlement
   22         offer to remedy a construction defect; authorizing a
   23         person served with a notice rejecting a settlement
   24         offer to make a supplemental offer within a specified
   25         timeframe; providing notice requirements for a
   26         claimant who rejects a supplemental offer; requiring
   27         the court to stay an action if a claimant initiates an
   28         action without first accepting or rejecting a
   29         supplemental offer; requiring a claimant who accepts a
   30         certain offer to enter into a contract to complete
   31         repairs to remedy an alleged construction defect;
   32         requiring the offeror or insurer to pay the contractor
   33         or contractors directly for the repairs; prohibiting
   34         an offeror or insurer from requiring a claimant to
   35         advance payment for repairs; requiring that the
   36         repairs be completed within a specified timeframe;
   37         creating s. 558.0046, F.S.; requiring a claimant to
   38         repair a construction defect if the claimant receives
   39         compensation for an alleged construction defect from
   40         specified persons; providing that a claimant is liable
   41         for damages resulting from failure to disclose a
   42         construction defect to a purchaser of a property;
   43         providing applicability; providing an effective date.
   45  Be It Enacted by the Legislature of the State of Florida:
   47         Section 1. Paragraph (c) of subsection (3) of section
   48  95.11, Florida Statutes, is amended 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 45 days after the date of actual possession by the
   56  owner, the date of completion of the improvement or the issuance
   57  of a certificate of occupancy, the date of abandonment of
   58  construction if the improvement is not completed, except as
   59  provided in subparagraphs 1.-5.
   60         1. If the action involves a latent defect, the action must
   61  be commenced within 7 years, and the time begins to run 45 days
   62  after the completion of the improvement or the date of
   63  abandonment of construction if the improvement is not completed.
   64         2. If the action alleges a latent defect to a single family
   65  residence and the person alleging the latent defect can show
   66  that the engineer, architect, or contractor or his or her
   67  employer fraudulently concealed the defect, the action may be
   68  commenced within 10 years after the time for commencing an
   69  action begins to run, provided that the action is commenced
   70  within 1 year after the discovery of the fraudulent concealment
   71  or within the time period in subparagraph 1.
   72         3. If the action alleges a latent defect to an improvement
   73  other than a single family residence and the person alleging the
   74  latent defect can show that the engineer, architect, or
   75  contractor or his or her employer fraudulently concealed the
   76  defect, the action may be commenced at any time, provided that
   77  the action is commenced within 1 year after the discovery of the
   78  fraudulent concealment or within the time period in subparagraph
   79  1.
   80         4. If a single family residence is built by a professional
   81  engineer, registered architect, or licensed contractor for
   82  speculation or for use as a model home, not for use as the
   83  person’s residence, and title is not transferred to an unrelated
   84  party for more than 45 days after the issuance of the
   85  certificate of occupancy or the closing or expiration of the
   86  building permit, the time begins to run from the date that title
   87  is transferred to an unrelated party.
   88         5., or the date of completion of the contract or
   89  termination of the contract between the professional engineer,
   90  registered architect, or licensed contractor and his or her
   91  employer, whichever date is latest; except that, when the action
   92  involves a latent defect, the time runs from the time the defect
   93  is discovered or should have been discovered with the exercise
   94  of due diligence. In any event, the action must be commenced
   95  within 10 years after the date of actual possession by the
   96  owner, the date of the issuance of a certificate of occupancy,
   97  the date of abandonment of construction if not completed, or the
   98  date of completion of the contract or termination of the
   99  contract between the professional engineer, registered
  100  architect, or licensed contractor and his or her employer,
  101  whichever date is latest. However, Counterclaims, cross-claims,
  102  and third-party claims that arise out of the conduct,
  103  transaction, or occurrence set out or attempted to be set out in
  104  a pleading may be commenced up to 1 year after the pleading to
  105  which such claims relate is served, even if such claims would
  106  otherwise be time barred.
  107         6. As used in this paragraph, the term:
  108         a. “Completion of an improvement” means issuance of the
  109  certificate of occupancy or certificate of completion for the
  110  improvement, or the closing as defined in s. 553.79(17)(a), or
  111  expiration of the building permit for the improvement if the
  112  improvement is not required to have a certificate of occupancy
  113  or certificate of completion.
  114         b. “Single family residence” means a one-family, two
  115  family, or three-family residence not exceeding three habitable
  116  stories above ground and no more than one uninhabitable story
  117  and accessory use structures made in connection with the
  118  residence With respect to actions founded on the design,
  119  planning, or construction of an improvement to real property, if
  120  such construction is performed pursuant to a duly issued
  121  building permit and if a local enforcement agency, state
  122  enforcement agency, or special inspector, as those terms are
  123  defined in s. 553.71, has issued a final certificate of
  124  occupancy or certificate of completion, then as to the
  125  construction which is within the scope of such building permit
  126  and certificate, the correction of defects to completed work or
  127  repair of completed work, whether performed under warranty or
  128  otherwise, does not extend the period of time within which an
  129  action must be commenced. Completion of the contract means the
  130  later of the date of final performance of all the contracted
  131  services or the date that final payment for such services
  132  becomes due without regard to the date final payment is made.
  133         Section 2. Section 553.84, Florida Statutes, is amended to
  134  read:
  135         553.84 Statutory civil action.—
  136         (1) As used in this section, the term:
  137         (a) “Material violation” means a violation that exists
  138  within a completed building, structure, or facility which may
  139  reasonably result, or has resulted, in physical harm to a person
  140  or significant damage to the performance of a building or its
  141  systems.
  142         (b) “Performance” means that the building, structure, or
  143  facility, or its system, functions as it is intended and is able
  144  to be used for its designed purpose.
  145         (c) “Significant damage” means a level of adverse impact to
  146  a building, structure, or facility, or its system which results
  147  or could reasonably result in economic damage or loss that
  148  exceeds the common expectations, and the cost of restoring the
  149  damage or preventing such damage to the building, structure, or
  150  facility, or its system, would equal or exceed 25 percent of the
  151  market value of the building, structure, or facility, or its
  152  system, if built in accordance with the Florida Building Code.
  153  The term does not include Florida Building Code violations that
  154  are cosmetic, minimal, or inconsequential to the overall
  155  performance of a building, structure, or facility, or its
  156  system.
  157         (2)(a) Notwithstanding any other remedies available and
  158  except as provided in paragraph (b), any person or party, in an
  159  individual capacity or on behalf of a class of persons or
  160  parties, damaged as a result of a violation of this part or a
  161  material violation of the Florida Building Code, has a cause of
  162  action in any court of competent jurisdiction against the person
  163  or party who committed the violation.
  164         (b) This section does not authorize a cause of action
  165  against a; however, if the person or party who obtained obtains
  166  the required building permits and any local government or public
  167  agency having with authority to enforce the Florida Building
  168  Code approved approves the plans and, if the construction
  169  project passed passes all required inspections under the code,
  170  and if there is no personal injury or damage to property other
  171  than the property that is the subject of the permits, plans, and
  172  inspections, this section does not apply unless the person or
  173  party knew or should have known that the violation existed.
  174         Section 3. Present subsections (8) through (15) of section
  175  558.004, Florida Statutes, are redesignated as subsections (9)
  176  through (16), respectively, a new subsection (8) is added to
  177  that section, and paragraphs (b) and (c) of subsection (1) and
  178  subsection (7) of that section are amended, to read:
  179         558.004 Notice and opportunity to repair.—
  180         (1)
  181         (b)1. The notice of claim must include an inspection report
  182  that is verified pursuant to s. 92.525 by a contractor,
  183  engineer, building code inspector, or other inspector who has a
  184  state license and experience relevant to the type of
  185  construction that is the basis of the claim. The report must
  186  include all of the following:
  187         a. A short statement describing the relevant experience and
  188  licenses of the person conducting the inspection.
  189         b. A description of each alleged construction defect; a
  190  clear description of the location of the defect; and, if known,
  191  an explanation of the damage resulting from the defect.
  192         c. Documentation of the defect with photographs or videos,
  193  and the results of any testing which pertain to the defect.
  194         d. A description of how the inspection was conducted,
  195  including a description of any specialized equipment used during
  196  the inspection or of any tests conducted.
  197         e. An explanation of whether or to what extent and how the
  198  property owner or person acting at the direction of the property
  199  owner inspected, maintained, repaired, or renovated a portion of
  200  the structure containing the alleged defect since the owner took
  201  possession of the structure.
  202         2. The preparation of an inspection report in bad faith
  203  constitutes grounds for discipline by any relevant licensing
  204  board or agency.
  205         3. The claimant and the person preparing the inspection
  206  report do not have an describe in reasonable detail the nature
  207  of each alleged construction defect and, if known, the damage or
  208  loss resulting from the defect. Based upon at least a visual
  209  inspection by the claimant or its agents, the notice of claim
  210  must identify the location of each alleged construction defect
  211  sufficiently to enable the responding parties to locate the
  212  alleged defect without undue burden. The claimant has no
  213  obligation to perform destructive or other testing for purposes
  214  of this notice.
  215         (c) The claimant shall endeavor to serve the notice of
  216  claim within 15 days after discovery of an alleged defect, but
  217  the failure to serve notice of claim within 15 days does not bar
  218  the filing of an action, subject to s. 558.003. This subsection
  219  does not preclude a claimant from filing an action sooner than
  220  60 days, or 120 days as applicable, after service of written
  221  notice as expressly provided in subsection (6), subsection (7),
  222  or subsection (9) (8).
  223         (7)(a) A claimant who receives a timely settlement offer
  224  must accept or reject the offer by serving written notice of
  225  such acceptance or rejection on the person making the offer
  226  within 45 days after receiving the settlement offer.
  227         (b) If the claimant rejects the settlement offer, the
  228  claimant must include the reasons for rejecting the offer in the
  229  notice rejecting the offer. If the claimant believes that the
  230  settlement offer omitted reference to any portion of the claim
  231  or was unreasonable in any manner, the claimant must include in
  232  the notice the items that the claimant believes were omitted and
  233  state in detail all known reasons why the claimant believes the
  234  settlement offer is unreasonable.
  235         (c) Upon receipt of a claimant’s notice of rejection and
  236  the reasons for such rejection, the person served with the
  237  rejection, within 15 days after receipt of the notice, may make
  238  a supplemental offer of repair or monetary payment, or both, to
  239  the claimant.
  240         (d) If the claimant rejects a supplemental offer to repair
  241  the construction defect or to settle the claim by monetary
  242  payment or a combination of both, the claimant must serve
  243  written notice of the claimant’s rejection on the person making
  244  the supplemental offer. The notice must include all known
  245  reasons for the claimant’s rejection of the supplemental
  246  settlement offer.
  247         (e) If a claimant initiates an action without first
  248  accepting or rejecting the offer or supplemental offer, the
  249  court shall stay the action upon timely motion until the
  250  claimant complies with this subsection.
  251         (8) If a claimant accepts an offer made pursuant to
  252  paragraph (5)(b), paragraph (5)(c), or paragraph (5)(e) or a
  253  supplemental offer made pursuant to paragraph (7)(c), the
  254  claimant must, within 90 days after the acceptance, enter into a
  255  contract with one or more appropriately licensed contractors to
  256  complete the repairs necessary to remedy the alleged
  257  construction defect. The offeror or insurer shall pay directly
  258  to the contractor or contractors, from the accepted monetary
  259  payment, the amounts necessary to begin and to continue the
  260  repairs as the work is performed and expenses are incurred. The
  261  offeror or insurer may not require the claimant to advance
  262  payment for the repairs. The repairs must be completed within 12
  263  months after the claimant enters into the contract for repairs,
  264  absent mutual agreement between the offeror or insurer and the
  265  claimant.
  266         Section 4. Section 558.0046, Florida Statutes, is created
  267  to read:
  268         558.0046 Duty to repair construction defect.—If a claimant
  269  receives compensation for an alleged construction defect from a
  270  contractor, a subcontractor, a supplier, a design professional,
  271  or an insurer, the claimant must repair the defect. A claimant
  272  who receives compensation and fails to fully repair the defect
  273  is liable to a purchaser of the property for any damages
  274  resulting from the failure to disclose the defect.
  275         Section 5. (1) The amendments made by this act to s.
  276  95.11(3)(c), Florida Statutes, apply to any action commenced on
  277  or after July 1, 2022, regardless of when the cause of action
  278  accrued. However, any action that would not have been barred
  279  under s. 95.11(3)(c), Florida Statutes, before the amendments
  280  made by this act to that section may be commenced before July 1,
  281  2023. If such action is not commenced by July 1, 2023, and is
  282  barred by the amendments made by this act to s. 95.11(3)(c),
  283  Florida Statutes, the action is barred.
  284         (2) Sections 2, 3, and 4 of this act apply to compensation
  285  for construction defects received on or after July 1, 2022, and
  286  to civil actions and proceedings for a construction defect or a
  287  building code violation which are initiated on or after July 1,
  288  2022.
  289         Section 6. This act shall take effect July 1, 2022.