Article - Construction Defects Pre-Suit Requirements

This Florida lawyer has written legal forms, books & articles for West, ALI-ABA & Fla. Bar Journal and is rated AV by Martindale-Hubbell. James W. Martin consults from his Saint Petersburg, Tampa Bay, Florida, law office on contract, business, corporate, probate, wills, trusts, real estate and lawsuit matters.

LEGISLATURE LIMITS HOMEOWNERS' RIGHTS TO SUE CONTRACTORS

Published in The Florida Bar News, June 1, 2003

Note: This article is for background purposes only and is not intended as legal advice. It is not based on the current law. The 2003 law was codified as Florida Statutes Sections 558.001 - 558.005. The law was amended thereafter. Effective 10/1/06 it was extended beyond residential property to also apply to other real property with improvements. This article was written before the 2004 and subsequent laws took effect and has not been updated to reflect the new laws.

In the closing days of the 2003 session, the Florida Legislature adopted Senate Law 1286 to require homeowners to give contractors 60 days written notice before filing a lawsuit for construction defects. Governor Bush signed it into law effective May 27, 2003, as Chapter 2003-49, Laws of Florida. It says it applies to all homeowner construction defect claims accruing after that date, even if the contract was entered into before then.

The legislative staff report says the law "creates a process to give homeowners...the opportunity to settle legal claims related to construction defects...before a lawsuit is filed." It applies to new construction as well as remodeling. It only applies to dwellings.

It is apparent from reading the law's process that it favors the construction industry in many ways:

1. The homeowner cannot file suit for damages until first giving the contractor 60 days written notice specifying the defects. The homeowner is supposed to send the notice within 15 days after discovering the defect.

2. The contractor then has 5 days to inspect the home, but it is not required to. The homeowner must give access during normal working hours, apparently even if the remodeling work was done at night and weekends for the homeowners convenience.

3. After that the contractor has another 5 days to notify subcontractors and suppliers of defects it thinks they are responsible for, and each of them has 5 days to inspect the home, again during normal working hours.

4. The contractor is given 25 days after receipt of notice of defects to respond to the homeowner in one of 3 ways: (a) the contractor may offer to "remedy" the defect at no cost to the homeowner, or (b) the contractor may offer to "compromise and settle" the claim by monetary payment within 30 days, or (c) the contractor may dispute the claim.

5. All of the above is an arguably fair process, but here is where it tips to favor the contractor: the homeowner is given 15 days to reject the contractor's offer, otherwise it is deemed accepted. The only method of rejection is to return the offer to the contractor with the word "rejected" printed on it. Thus, mere inaction by the homeowner results in acceptance of the contractor's offer.

This is only the tip of the iceberg. The law is filled with ambiguities and inconsistencies. It precludes filing suit for damages, but not for specific performance. So, in theory, if the defect is of an emergency nature and if the only contractor who could repair it is the contractor to be sued, then the homeowner could sue for specific performance without going through the pre-suit notice procedure. The problem with this is that the homeowner's claim for damages may be waived by doing so. And the homeowner could not sue for both damages and specific performance and just abate the damages portion because the law specifically abates the "action" which is the entire suit.

The law even requires pre-suit notice before arbitration, and it even controls over arbitration provisions in contracts. Therefore, even if the parties planned their own alternative dispute resolution mechanism by contract, this law would take that contracted right away and require the homeowner to follow the pre-suit claims process before seeking arbitration.

There are a few words in the law that broaden its reach beyond the usual construction situation. For example, the law includes in its definition of "contractor" anyone that is engaged in the business of selling dwellings or attachments thereto. This is a very broad definition. It could include someone who buys and sells houses and does not live in them. It could include someone who sells interior decorations that are attached to houses.

Any suggestion that this law creates a process for homeowners to settle claims prior to litigation without the need to hire a lawyer is misleading. From now on, every homeowner who has a construction defect MUST hire a lawyer to take them through the pre-suit claims process.

The legislative staff report notes that the law's process is similar to the pre-suit screening process for medical malpractice actions. It is unlikely that any patient has ever pursued that process without a lawyer.

The law can be read online as a PDF file at http://election.dos.state.fl.us/laws/03laws/ch_2003-049.pdf Only one senator voted against it.