Statute of Limitations for Contractor Negligence and Breach of Warranties Does Not Accrue until Turnover of Control of Condo Association to Unit Owners

Saltponds Condo. Assoc. v. Walbridge Aldinger Co., 979 So. 2d 1240 (Fla. Dist. Ct. App. 2008)

In this case, a condo association sued a contractor in connection with alleged construction defects discovered after the control of the association passed from the developer to the unit owners.  The contractor argued that the claims were barred by the three-year “statute of limitations” set forth in Florida Statute Section 718.203.  That Section, however, merely sets the warranty period for construction improvements and materials, not the statute of limitations.

Under Fla. Stat. § 95.11(3)(c), the applicable statute of limitation for a case brought by a condo association against a contractor for negligence and breach of warranties is the later of four years from completion or possession.  This period may be tolled:

(1) in the case of a latent defect from the time the defect was discovered or should have been discovered with the exercise of due diligence;
(2) under §718.124 until control of the association passes from the developer to the unit owners (preventing a developer from retaining control just long enough to bar potential causes of action); and
(3) for periods specified in section 558.004 after mailing written notice of claim as provided thereunder (which affords the contractor an opportunity to inspect and repair the work).

In Saltponds, the condo association retained an engineer who identified various alleged construction defects after the developer turned the condominium over to the association.  The association served a notice of claim on the contractor, developer and project architect under Florida Statute Section 558.004, and filed suit thereafter.  The Third DCA reversed the trial court’s dismissal finding that the surety pled various factual allegations that could support a tolling argument.