Could This New Law Hinder the Boom?

MIAMI—As of October 1^st, several amendments to Florida's Construction Defect Statute came into effect. The changes come at the right time as South Florida experiences a residential and commercial construction boom.  

Some of the amendments will significantly alter provisions governingFlorida Statutes' Chapter 558, which sets forth a procedure and numerous requirements for an alternative method to resolve construction disputes to try to avoid litigation. GlobeSt.com caught up with Gary Brown, a partner in the Fort Lauderdale office of Arnstein & Lehr, to discuss the amended law, in part one of this exclusive interview. Brown is a member of the firm's Construction Practice Group and Board Certified by The Florida Bar in Construction Law.

GlobeSt.com: What are some of the most significant changes of the law?

Brown: The amended law now allows the insurer of the recipient of a claim notice with an opportunity to resolve the claim without litigation, which may involve confidential settlement negotiations. While parties are always free to choose or not chose to designate discussions as “confidential,” it appears the legislature intended by the amendment to allow settlement discussions done through the 558 process, including those involving insurers of parties potentially responsible for alleged defect(s), to be confidential.

Another important change is a revised definition of “completion of a building or improvement”— the triggering event which requires a claimant to follow the procedures of Chapter 558. The revised definition now expressly includes  a temporary certificate of occupancy that allows for occupancy of the entire building. Typically, construction is not deemed completed unit a final certificate of occupancy has been issued.

In some jurisdictions, however, a building owner is permitted by the authority having jurisdiction over the work to occupy the building or designated portions thereof before completion of construction by obtaining a temporary certificate of occupancy. Prior to the change in the statute, it was unclear whether “completion of a building or improvement” triggering the procedures of Chapter 558 occurred prior to issuance of a final certificate of occupancy.

GlobeSt.com: How has the amended law changed the obligations of a claimant in identifying the defects and resulting damages?

Brown: Previously, a claimant was required to only describe in details a claim and provide a description of the resulting damage or loss. Now, a claimant must provide reasonable details of the nature of each defect, and if known, the damages or loss resulting from the defect. Further, the claimant is now required to identify the location of each defect sufficient enough to allow the party receiving the notice to locate the defect without undue burden. Clearly, these changes were designed to provide for greater specificity in describing the nature and location of, and damages claimed for, each defect, ostensibly to facilitate inspection and consideration by those receiving a notice.