United States: Florida's Construction Defect Statute Undergoes Significant Changes In 2015

Last Updated: March 16 2016
Article by Gary L. Brown

During the 2015 regular legislative session, the Florida Legislature made several key revisions to Chapter 558 - Florida's Construction Defect Statute. These amendments, which became effective on October 1st, will significantly alter some of the provisions of the statute, which sets forth a procedure and numerous requirements for an alternative method to resolve construction disputes prior to litigation. Developers, contractors, design professionals and others in the construction industry should welcome the amendments which, among other notable changes, broaden the role of insurers, clarify when the statute applies, increase the notice requirements by building owners pursuing defect claims concerning the nature of the alleged defects and resulting damages, and allow for broader pre-suit discovery of information. On balance, these changes appear geared toward broadening the exchange of information and facilitating meaningful settlement discussions concerning the identification, cause, and resulting damage from alleged defects which furthers the statute's stated goal of resolving defect claims outside of litigation.

For example, §558.001 now expressly allows the insurer of the recipient of a claim notice with an opportunity to resolve the claim without litigation, which may involve confidential settlement negotiations. While parties are always free to choose or not chose to designate discussions as "confidential," it appears the legislature intended by the amendment to allow settlement discussions done through the 558 process, including those involving insurers of parties potentially responsible for alleged defect(s), to be confidential.

With regard to § 558.002(4), the definition of "completion of a building or improvement" - the triggering event, which requires a claimant to follow the procedures of Chapter 558 - now expressly includes a temporary certificate of occupancy that allows for occupancy of the entire building. Typically, construction is not deemed completed unit a final certificate of occupancy has been issued. In some jurisdictions, however, a building owner is permitted by the authority having jurisdiction over the work to occupy the building or designated portions thereof before completion of construction by obtaining a temporary certificate of occupancy. Prior to the change in the statute, it was unclear whether "completion of a building or improvement" triggering the procedures of Chapter 558 occurred prior to issuance of a final certificate of occupancy. The change now clarifies that "completion" of construction under the statute will be deemed to occur when a certificate of occupancy is issued for the entire building, regardless of its designation as temporary.

The changes to §558.004(1) have expanded the obligations of a claimant in identifying the defect(s) and resulting damages. Previously, a claimant was required to only describe the claim in such reasonable detail to allow a determination of the general nature of the alleged defects and provide a description of the resulting damage or loss. Now, a claimant must describe in reasonable detail the nature of each defect, and if known, the damages or loss resulting from the defect. Further, the claimant is now required (through a visual inspection only) to identify the location of each defect sufficient enough to allow the party receiving the notice to locate the defect without undue burden. Clearly, these changes were designed to provide for greater specificity in describing the nature and location of, and damages claimed for, each defect, ostensibly to facilitate inspection and consideration by those receiving a notice.

Regarding § 558.004(4), the primary change expands the required options of a party receiving a down-stream notice so that they exactly parallel those of a party receiving a notice directly from the claimant. Those options, which are set forth in § 558.004(5)(a)-(e), are now expressly made part of this subsection. The prior version of this subsection required the recipient of a down-stream notice to advise the person sending it whether the recipient was willing to make repairs, and if so, describing them and a timetable for doing so, or whether the claim was disputed. While these options loosely tracked those available to a party receiving a notice directly from the claimant, conspicuously absent was the option to make a monetary offer either in full or in combination with an offer to make repairs. This omission was likely an oversight by the legislature. To be sure, parties sending and receiving down-stream notices were not expressly prohibited from making monetary settlements. But the change does clarify that a party receiving a down-stream notice must now respond in kind as the party initially receiving the claimant's notice, including the option to offer money to address a defect, subject to the same requirements and limitations.

With respect to § 558.004(13), the change appears to reconcile possible discrepancies between the statute and any applicable policies of insurance potentially covering a defect claim concerning whether the receipt of a 558 notice is tantamount to a "claim" under such policies. The prior version of this subsection, added to the statute in 2004, provided that a claim notice under chapter 558 did not constitute a claim for insurance purposes. The legislature has amended this subsection - presumably to address potential contrary claim reporting requirements of applicable policies - to provide that a 558 notice may constitute a claim for insurance purposes if the terms of the policy so provide.

Finally, regarding § 558.004(15), the changes center on discoverable information, which must be exchanged pursuant to the statute. In addition to deleting some redundant language the amendments extensively expand discovery, allowing a party to request maintenance records and any other documents related to the discovery, investigation, causation and extent of the alleged defect(s) and any resulting damages. Notwithstanding the broadening of discovery, the amendments also clarify that a party may withhold any documents, which might otherwise be discoverable under chapter 558 on the basis of any recognized privilege under Florida law. Under the prior version of this subsection, exchange of available expert reports was mandatory, though such reports could not be used in subsequent litigation for any purpose unless the expert testified or the report was used in the litigation. Now, a party may shield such reports, along with any other requested documents, on the basis of any applicable privileges. It should be noted, however, that the legislature left intact existing language in the statute providing that the withholding of such documents may subject a party to discovery sanctions by the court in the event of subsequent litigation.

In summary, along with minor stylistic changes and clarifications, the 2015 amendments to chapter 558 have been significant in terms of expanding the claim disclosure requirements of those asserting defect claims and the information, which must be exchanged pursuant to the statute upon request, subject to any applicable privileges. The changes have also expanded the required content for down-stream notice responses, as well as the role of insurers in the 558 process, including the possible effect of a claim notice for insurance purposes. Overall, these changes should facilitate the resolution of claims prior to litigation by broadening the exchange of required information and options available among parties receiving a defect notice.

Previously published by Daily Business Review

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.