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Construction Defects

Florida Statute Chapter 558 sets forth the requirement for a property owner to provide notice of construction claims to potentially responsible parties, and an opportunity to offer settlement in the form of repairs or monetary payment, before filing suit. This requirement can be waived contractually as set forth in Chapter 558.

For condominiums in Florida, the primary avenue for a property owner to recover for construction defects is Section 718.203, Florida Statutes, which provides for statutory warranties from the developer, general contractor, subcontractors and suppliers. For converted condominiums in Florida, Section 618.618, Florida Statutes requires developers to fund reserves or provide certain warranties.

For the owners of other types of property in the state, the causes of action that may be available include breach of contract (if there is privity between the parties), negligence, and a statutory civil action for code violations pursuant to Section 554.84, Florida Statutes.

Breach of contract claims are available when the property owner sues a contractor hired by direct contract with the owner for construction defects that amount to a breach of the contract, or when the contractor sues a subcontractor with whom the contractor is in privity.

While contractors had previously argued that negligence claims were barred by Florida’s economic loss rule, the economic loss rule in Florida has been curtailed by the Florida Supreme Court’s decision in Tiara Condominium Association v. Marsh & McClennan Companies, Inc. et al. and limited to application in product liability claims. In such product liability claims, where the defendant’s product physically damages only itself, causing additional economic loss, no recovery is permitted in tort (such as in a claim for negligence). The Tiara decision has potentially restored the rights of property owners in Florida to sue contractors and subcontractors for economic losses suffered as a result of negligent construction.

A statutory civil action is available to a party damaged by a code violation against the person or party that caused the violation, pursuant to Section 554.84, Florida Statutes. However, if the person or party obtains the required building permits and any local government or public agency with authority to enforce the Florida Building Code approves the plans, if the construction project passes all required inspections under the code, and if there is no personal injury or damage to property other than the property that is the subject of the permits, plans, and inspections, this section does not apply unless the person or party knew or should have known that the violation existed.

For a developer, contractor or design professional, defending against a construction defect claim can often involve not only denying the plaintiff’s claims, but also prosecuting cross-claims and third-party claims against other defendants, or raising Fabre defendants at trial, since there are often more than one party potentially at fault for, or contributing to, a given construction defect.

Florida HOA Lawyer Blog - Construction defect