Defective Residential Construction - Notice and Opportunity to Cure
Senate Bill 1286 (2003)

By: Larry R. Leiby, Esq.

The Florida legislature has set up procedures to reduce the caseload, and resulting costs to the state, for the Florida Courts. The legislature first enacted arbitration. Next the legislature enacted administrative proceedings as a basis to take certain governmental disputes out of the court system. Then the legislature enacted requirements for mediation prior to trial, resulting in parties being required to talk in earnest about settlement before going to trial. This resulted in many cases being settled prior to trial.

In 2003, the legislature enacted a statutory procedure that is required prior to residential construction owners being entitled to file a lawsuit or a demand for arbitration arising out of construction defects. As originally proposed, this legislation was drafted in anticipation of mold litigation. As the bill went through the legislature, the restriction to mold was eliminated and the legislation passed as related to any defects in residential construction. The act does not bar or limit claims for specific performance that may be provided by contract. Neither does the act create any new rights, causes of action, or theories on which liability may be based.

Notice Required to Advise Residential Owner of Duty to Give
Notice and Opportunity to Cure Before Filing an Action for Defects

Section 5 of the Act requires a notice to the owner, which notice may be served separately or included conspicuously in each contract for sale, design, construction, or remodeling of a dwelling.

A "dwelling" is defined as "a single family house, manufactured or modular home, duplex, unit in a multi-family residential building designed for residential use including common areas and improvements owned or maintained by an association, and includes the systems, other components, and improvements that are part of the structure at the time of completion of construction."

The notice is required upon entering into the contract by a contractor, subcontractor, supplier, or design professional. The notice is to advise the owner of the right to offer to cure construction defects or pay to settle alleged construction defects before a claimant may file an action against the sender of the notice. The notice must be conspicuous and in substantially the following form:

FLORIDA LAW CONTAINS IMPORTANT REQUIREMENTS YOU MUST FOLLOW BEFORE YOU MAY FILE A LAWSUIT FOR DEFECTIVE CONSTRUCTION AGAINST A CONTRACTOR, SUBCONTRACTOR, SUPPLIER, OR DESIGN PROFESSIONAL FOR AN ALLEGED CONSTRUCTION DEFECT IN YOUR HOME. SIXTY DAYS BEFORE YOU FILE YOUR LAWSUIT, YOU MUST DELIVER TO THE CONTRACTOR, SUBCONTRACTOR, SUPPLIER, OR DESIGN PROFESSIONAL A WRITTEN NOTICE OF ANY CONSTRUCTION CONDITIONS YOU ALLEGE ARE DEFECTIVE AND PROVIDE YOUR CONTRACTOR AND ANY SUBCONTRACTORS, SUPPLIERS, OR DESIGN PROFESSIONALS THE OPPORTUNITY TO INSPECT THE ALLEGED CONSTRUCTION DEFECTS. YOU ARE NOT OBLIGATED TO ACCEPT ANY OFFER MADE BY THE CONTRACTOR OR ANY SUBCONTRACTORS, SUPPLIERS, OR DESIGN PROFESSIONALS. THERE ARE STRICT DEADLINES AND PROCEDURES UNDER FLORIDA LAW.

The consequence of failing to send the required notice by the contractor, subcontractor, supplier, or design professional is that the failure to follow any procedure is admissible in an action regarding the defect.

Notice of Defect Procedure Prior to Arbitration or Suit

First, note that this procedure only applies to claims for damage or loss to a dwelling or personal property caused by an alleged construction defect. The notice is not required for a claim for allege personal injuries arising out of an alleged construction defect.

The law requires that at least 60 days before filing an action a claimant must serve written notice on the contractor, subcontractor, supplier, or design professional describing the claim in "reasonable detail sufficient to determine the general nature of each alleged defect and a description of the damage or loss resulting from the defect, if known." The law suggests that the notice be sent within 15 days of discovering the defect, but does not bar the filing of an action if sent later. The notice must be sent for each alleged construction defect, but multiple defects may be included in one notice. Also, emergency repairs may be done regardless of the notice.

A "claimant" is defined as a homeowner, condominium association, homeowner's association, cooperative, or mobile home park.

The term "serve" or "service" means personal delivery or delivery by certified mail to the last known address of the addressee. Service is not defined as requiring proof of delivery by certified mail, such as a return receipt.

In the event of a conflict between an arbitration clause and this law, this law controls.

A written notice of claim tolls the applicable statute of limitations as to the recipient until the later of: a) 60 days after the recipient receives the notice, or b) 30 days after an accepted repair period, which tolling period may be extended by stipulation of the parties,

Receipt of a notice of defect of claim triggers some timely rights and duties of the person receiving the notice:

1. Within ten business days of receipt of a notice of defect, any contractor, subcontractor, supplier or design professional must forward a copy of the notice of claim to each subcontractor, supplier or design professional who the recipient of the notice believes is responsible for each defect specified in the notice of claim and shall note the specific defect for which it believes the particular subcontractor, supplier, or design professional is responsible.
   
   Within five business days after receipt of this sub notice the recipient must serve a written response on the person who gave the sub notice which provides: a) a report of any inspection and results of inspection (which inspection with a report may be difficult to achieve within five business days). It is more likely that the report will identify what inspections or testing is desired. b) a statement of whether the recipient is willing to make repairs or disputes the claim. If repairs are offered to be made, a description of the repairs offered and a timetable for performance must be included.
   
   
2. Within five business days after receipt of the notice of claim the recipient may inspect the dwelling to assess each alleged construction defect. The claimant must provide reasonable access during normal working hours to allow an inspection to determine the "nature and cause of each alleged construction defect and the nature and extent of any repairs or replacements necessary to remedy each defect." Destructive testing may only be done upon mutual agreement. A person seeking testing shall give notice to the claimant in writing of the type of testing to be performed, the anticipated resulting damage, and the anticipated repairs. The person performing the testing is responsible for repairing damage to the dwelling caused by the testing.
   
   
3. Within twenty-five calendar days after receiving the notice of claim from a claimant, the recipient must serve a written response on the claimant which must provide:
   
   
   1. a written offer to remedy the alleged defect at no cost to the claimant with a report of the scope of the inspection, the findings and results of the inspection, a detailed description of the repairs to remedy the defect, and a timetable for completion of the repairs;
      
      
   2. a written offer to compromise and settle the claim by payment to be paid within 30 days after claimant's acceptance of the offer with a statement that the offer is accepted if the claimant does not serve a written rejection of the offer within 15 days for a homeowner, or within 45 days for an association. If the claimant wishes to reject the offer, the claimant must serve a written rejection within the required time frame (15 or 45 days, as applicable) with a copy of the offer having the word "rejected" printed on the offer. If rejected, the claimant may then proceed with litigation or arbitration, as applicable. If the rejection is not done, the offer is accepted. If the offer is accepted, the claimant shall provide access during normal working hours to perform the repair in accordance with the stated timetable. If the compromise is accepted and paid or the offer of repairs is accepted and the repairs made, the claimant is then barred from proceeding with the action. A written offer to settle or to make repairs is not an admission of liability with respect to the defect.
      
      
   3. a written statement that the recipient disputes the claim and will not remedy or settle the claim. If the claim is disputed and will not be remedied or settled, or if there is no timely response to the notice of claim, the claimant may proceed with a suit, or arbitration if agreed, for the claim.

This law is certainly innovative. It will require competent counsel so that the parties do not become adversely affected by honest ignorance. For example, the wording of an offer to compromise or make repairs (which can be used as evidence potentially to show that there was lack of compliance with this law) may need to be artfully worded anticipating that it may show up as a trial exhibit later. The critical format and timing of rejection of an offer may result in an unwitting acceptance of an offer. Advice and counsel may also be beneficial in connection with choosing to send, or the wording in, notices of defect; as well as in the choices to be made regarding offering to settle or make repairs.