Changes to Construction Defects statute

Last week, changes to Chapter 558, Florida Statutes, became effective. Chapter 558 was enacted in 2003 to provide an alternative dispute resolution process to supposedly reduce the need for litigation by requiring a person who is making a damage claim for construction defects to follow certain procedures before initiating litigation. In short, before a property owner may sue a contractor, the property owner is required to notify the contractor of the defect and give the contractor an opportunity to examine the defect (including examination requiring destructive testing). If the contractor agrees that there is a defect, he is given an opportunity to repair it or offer to settle the matter. If the parties still disagree, the property owner may file his lawsuit. These procedures apparently applied to all construction contracts irrespective of the desire of the owner and contractor, though there was some ambiguity as to whether the legislature intended it that way. The recent bill changes Chapter 558 while preserving the basic concept.

The most important change, as far as my clients tend to be concerned, is that the notice that previously was mandated for all contracts for improvement is now optional if the parties agree in writing to opt out, and that in the event that the parties do opt out, the notice provisions do not apply to the contract. The bill also clarifies that Chapter 558 is generally inapplicable to projects prior to completion (C/O). Finally the bill prohibits Chapter 713 liens for persons who do destructive testing or for restoration work, raising interesting questions but having little practical significance. (I can think of instances where a contractor or materialman would be hired to do restorative work or furnish materials after destructive testing, unaware that the project is restorative in nature and provides no lien rights).

The changes to the law are an improvement insofar as ambiguity has been removed and the parties may contract around its provisions.