Notice and opportunity to cure statute amendments to go into effect Oct. 1

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chapt 558 florida

Florida Gov. Rick Scott has signed into law a bill resulting in several amendments to Florida’s notice and opportunity to cure statute (Chapter 558, Florida Statutes.)

The amendments signed on July 16 will take effect on Oct. 1. “and are of significance to those in the construction industry, including owners, architects, engineers, general contractors, subcontractors and suppliers, as well as condominium associations,” lawyers Gary Stein and Stefan Chin wrote in Daily Business Review.

“Chapter 558 was enacted in 2003 as an alternative pre-suit dispute resolution mechanism to resolve construction defect disputes and reduce the number of construction defect lawsuits filed, while at the same time protecting the rights of property owners,” the lawyers wrote. “The chapter sets forth a procedure for homeowner associations, owners, design professionals, contractors, and others who participated in the design and construction of a property to follow, prior to the filing of a lawsuit for construction defects.”

The bill’s amendments include:

  •  Revision of the legislative intent to indicate the chapter is intended to provide an opportunity to resolve construction defect claims through confidential settlement negotiations;
  • Revision of the definition of “completion of a building or improvement” to include issuance of a temporary certificate of occupancy;
  • Additional requirements for a notice of claim, including identification of the locations of each alleged construction defect based upon at least a visual inspection by the claimant or its agents, but clarifying that the claimant is not required to perform destructive or other testing for purposes of preparing the notice of claim;
  • Revision of the scope of documentation which can be requested to include maintenance records and other documents related to the discovery, investigation, causation and extent of the alleged defects identified in the notice of claim and any resulting damages.
  • Clarification that a party may assert any claim of privilege recognized under Florida law with respect to any of the disclosure obligations specified in the chapter
  • Revision of §§ 718.203(3) and 719.203(3) to conform to the revised definition of the term “completion of a building or improvement.” The sections prescribe statutory warranties from developers, contractors, subcontractors and suppliers in favor of condominium associations and cooperatives.

“It is anticipated the amendments will improve the construction defect resolution procedure with the goal of ensuring that recipients of Chapter 558 notices of claim are provided with additional information so they can attempt to proactively and effectively address alleged construction defects and avoid costly litigation,” they wrote.

“The ability of the parties to participate in the process under the protection of confidential settlement negotiations should facilitate more open dialogue between the parties, which may lead to resolution of more construction defect claims prior to litigation, thereby potentially saving the parties and the courts the associated time, resources, and expenses.”

Revising the definition of “completion of a building or improvement” to include issuance of a temporary certificate of occupancy provides an objective standard for determination of when parties’ warranty obligations commence and conclude, thereby providing more clarity for the parties involved.

Requiring more specific and thorough notices of claim should result in the recipient of a votice having a better understanding of the alleged construction defects and claims being asserted, which may lead to more efficient and effective resolution of those claims. It should also reduce the number of improper construction defect claims being alleged, which may potentially save the parties time and money which could be devoted to resolving legitimate claims.

Requiring the claimant to visually examine the property and identify the location of each alleged construction defect should facilitate speedier investigation and resolution of claims since recipients of the notice of claim and any second-tier “downstream” recipients would not have to spend time and money coordinating and conducting inspections of the property to try and locate alleged construction defects where a claimant has not identified each location or instance of an alleged defective condition.

Expanding the scope of documentation which may be requested under the statute should allow the parties to obtain a more complete understanding of the operative facts, which may facilitate more effective resolution of the alleged construction defects and claims being asserted.

“In sum, the recent amendments will likely prove beneficial to those in the construction industry because the amended legislation should facilitate more efficient and effective resolution of construction defect claims prior to litigation, potentially saving the parties and the courts the time, resources and expenses associated with a construction defect lawsuit.”

Gary Stein, Miami co-managing partner of the construction law firm of Peckar & Abramson is general counsel for the South Florida Association of General Contractors. He can be reached at gstein@pecklaw.com. K. Stefan Chin is an associate with the firm. He can be reached at kschin@pecklaw.com.

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