Liability and Construction Defects

Buildings can suffer from a variety of construction defects. Sometimes, the defect can become apparent during construction, resulting in delaying the entire project. Other times, the defect can be silently present, only to be discovered at a later time.

In Florida, there is a statute of limitations for cases involving construction defects; generally, for patent defects, the lawsuit must be brought within 4 years from the end of the project. However, if the defect is latent, hidden or not readily observable, the four year limitation starts on the date the defect was discovered or reasonably should have been discovered. Missing the statute of limitations is crucial to construction defect cases – if you don’t file within the 4 years, your case will likely be barred.

Construction defect cases are complex and involve numerous parties asserting myriad claims and defenses. They are usually based on contracts between a property owner and developer, general contractor, or design professionals as well as the agreements between the general contractors and subcontractors, but are also often premised on negligence and warranty claims directly by the property owner against all involved in the project. In most cases, property owners must give contractors, subcontractors, or other construction professionals written notice 120 days before they file a lawsuit. This time period allows the construction professionals an opportunity to investigate the alleged defects and determine whether to fix the defect, settle, or deny the claims.

Often these cases can expand to 3rd and even 4th party claims, as the liability flows down the chain of contracts. For instance, an owner will sue the general contractor, who in turn will sue subcontractors, who in turn will sue sub-subcontractors or suppliers. These downstream claims generally take the form of indemnification claims or contribution claims.

When addressing liability for a construction defect, usually one or more of the causes of action below are involved.

Breach of Contract

The property owner can sue the developer or the builder based on the theory of breach of a provision in the purchase or sale documentation, or in the escrow instructions. This is usually more involved than just the builder failing to adhere to building plans or specifications.

Negligence

The developer, contractor or subcontractor has the duty to use reasonable care that would normally be shown by business professionals in the industry. The duty of care extends to anyone who could foreseeably be injured by the defect. General contractors and developers are liable for the negligence of their subcontractors.

Strict liability

In some jurisdictions, the general contractor is strictly liable under the concept of implied warranty of habitability. This means, in certain circumstances, the property owner does not have to show that the contractor acted negligently in any way.

Breach of Warranty

Purchase documentation between the developer and property owner contain warranties regarding the condition of the property. Courts have said that sellers and builders of new construction should be held to what is implied within the contract-that the structure was designed and built in a reasonable, professional manner. There may also be warranties created by statutes.

Fraud and Negligent Misrepresentation

If the developer intentionally misrepresented the quality of construction, there may be a cause of action for fraud. It must be proven, however, that the developer had no intention of adhering to the approved design plans and specifications. If the developer knowingly lied, there may be a cause of action for negligent misrepresentation.

Depending on the circumstances of a case, this area of law can get very complicated rather quickly; there are a lot of technical requirements and loopholes that can drastically change the outcome of a case. If you are facing a similar situation, it is recommended that you speak with legal counsel to ensure your interests are protected.

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