On June 17, 2015, Governor Rick Scott signed into law several amendments to Chapter 558 of the Florida Statutes which are to become effective on October 1, 2015. This Chapter, also commonly known as the Construction Defect Statute, requires owners of residential and commercial real property to provide contractors, subcontractors, suppliers, and/or design professionals with a “notice of claim” identifying any construction and/or design defects, and to give the contractor an opportunity to cure those defects, before the owners can assert a claim. That is, of course, unless the parties have contractually agreed to opt-out of the Chapter 558 provisions. If these statutory procedures are not strictly followed, property owners’ rights to assert a claim for a construction defect may be delayed or even lost.
The legislative purpose for this Chapter is to have the parties engage in an “alternative method to resolve construction disputes that would reduce the need for litigation.” By forcing property owners to notify and give the responsible party an opportunity to cure any construction defects, the Legislature hopes parties will resolve the alleged issues without the need of incurring substantial legal expenses or expending valuable judicial resources.
To this end, the amendments to Chapter 558 discussed in this post attempt to clarify certain areas of the statute to more accurately capture the Legislature’s intent. The most significant amendments to this Chapter are detailed below:
- Section 558.001 – The amendment to this section requires that the property owner not only give contractors, subcontractors, suppliers, or design professionals the opportunity to cure, but now also requires that this same opportunity be given to “the insurer of the contractor, subcontractor, supplier, or design professional.” Further, the amendment to this section makes it clear that any settlement negotiations stemming from this process are confidential. This amendment attempts to promote the settlement of disputes by injecting yet another party into the negotiating table.
- Section 558.004(1)(b) – The amendment to this section makes the notice of claim requirements more burdensome to the property owners by requiring a greater level of detail in identifying the nature and location of the construction defect complained of. The burden is on the property owner to “identify the location of each alleged construction defect sufficiently to enable the responding parties to locate the alleged defect without undue burden.” Surely the meaning of those last two words will give rise to a great deal of litigation from recipients of notice of claims attempting to attack the substance of the notice of claims, thereby avoiding litigation on the merits of the claim.
- Section 558.004(13) – This amendment provides that a notice of claim is not to be considered an insurance claim, “unless the terms of the policy provide otherwise.”
- Section 558.004(15) – This amendment generally expands the scope of pre-litigation discovery by requiring the parties to exchange “maintenance records and other documents related to the discovery, investigation, causation, and extent of the alleged defect identified in the notice of claim, and any resulting damages.” Fortunately, given the likelihood that certain documents under this disclosure obligation may have been created in preparation for litigation, the amendment makes it clear that “[a] party may assert any claim of privilege recognized under the laws of this state with respect to any of the disclosure obligation specified in this chapter.”
There are other amendments not discussed in this post and many other requirements that must be strictly followed in order properly file a claim due to a construction defect. It is important that you consult with an attorney familiar with this Chapter before filing or defending a claim based on it.