Under Florida law, the four year statute of limitations and the ten year statute of repose both begin to run from “the date of actual possession by the owner, the date of the issuance of a certificate of occupancy, the date of abandonment of construction if not completed, or the date of completion or termination of the contract between the professional engineer, registered architect, or licensed contractor and his or her employer, whichever date is latest.” Fla. Stat § 95.11(3)(c).
In its May 8th, 2015 decision, the Fifth District Court of Appeal decided that the words “completion . . . of . . . the contract” means completion of the performance of the obligation to make payment under the construction contract. Cypress Fairway Condo. v. Bergeron Const. Co. Inc., 5D13-4102, 2015 WL 2129473 (Fla. 5th DCA 2015).
The logical result of the Court’s decision is that the payer under any construction contract can extend both the statute of limitations and the statute of repose simply by delaying payment.
In reaching its decision, the Fifth District determined that it could not rely on the statute’s legislative history wherein Florida’s legislature indicated that “completion” was intended to mean completion of the work, not completion of the parties’ other obligations under the contract.
The District Court’s literal interpretation of the language of the statute will likely extend the time claimants have to file suit for construction defects.
In addition, the Court’s decision may incentivize unscrupulous owners to withhold some portion of final payment to extend the time they have to file lawsuits.