|
Published
Articles
Updated 9/27/2006
Construction defect law may not reduce suits as intended
by Terry Sheridan
Daily Business Review
Friday, September 29, 2006
A new state
law taking effect Sunday will make it tougher for commercial property
owners to sue contractors over construction defects.
The amendment
to Florida's construction defects law expands beyond residential
problems, which have been covered since 2003.
But attorneys
familiar with the legislative changes say the new law is loaded
with vague language that could bring about what the measure intended
to avoid more lawsuits.
The law requires
disgruntled property owners who discover defects to notify contractors
or whomever they believe is responsible for a problem and give
them time to fix it.
Defects range
from deficient material to code violations and failure to meet
design and construction standards.
Contractors
have 60 days to respond to a notice from owners. In the case of
an association representing more than 20 parcels, the notice requirement
is 120 days.
Contractors
then get 30 to 50 days to inspect the problem and are permitted
to do destructive testing such as ripping out walls to check for
water leaks or mold.
After that,
the parties must meet a series of deadlines for inspections, notices,
reports and settlement offers.
If that process
fails, the property owners can head to court.
"I
guess you've eliminated the little stuff that's really whiny,"
said attorney Roy Oppenheim of Oppenheim & Pilelsky in Weston,
who represents homeowners and developers. "But for the bigger
stuff, the bar has been raised. You'll need more energy, willpower,
resources, money to bring action. In the commercial context, you
may have parties equally resourceful."
He
described a case last year that required engineers and specialists
to demonstrate that a home-builder's drywall contrac tor caused
a water leak by using nails instead of studs.
"I
can't tell you how much that happens," he said. "But
the nail has to rust first. That could be a year to 18 months.
Then the water has to break the seal the nail created, and the
water drips out, and you have a big problem with mold and replacing
stuff."
Oppenheim
declined to identify the builder or property but said it required
poking holes in walls to find out the source of the water.
"And
if they don't like your report, then they bring in their guys,"
he said.
Ultimately,
the matter was resolved. But Oppenheim said it took a lot of effort,
which translates into money.
The residential
defects law has pitted homeowners against home-builders in a lopsided
battle, but the amendment adding commercial properties involves
more equally budgeted parties.
Oppenheim
said that this may make the commercial amendment more complicated.
No one so
far has formally tracked the residential defect claims. Anecdotally,
attorney Gary Stein of Peckar & Abramson in Miami believes
the surge in condo construction brought more complaints.
Partner Matt
Coglianese said it'll take a few years for a claims database to
reveal whether more defects were resolved before or after court.
Attorney
Stacy Bercun Bohm of Akerman Senterfitt in Miami, who represents
residential and commercial developers, said her clients are interested
in resolving claims before they get to court to avoid bad publicity
and cut litigation costs.
"Imagine
the cost of two years of litigation and a potential trial opposed
to resolving this pre-suit," she said. "It's dramatic."
Regardless,
she and attorney Steve Lesser of Becker & Poliakoff in Fort
Lauderdale point to loopholes in the law that likely will need
more than polite mediation to resolve.
Lesser takes
issue with the definition of an emergency.
The iaw states
that claimants can make emergency repairs to protect their health,
safety and welfare.
"What
about a museum?" asked Lesser, who represents the Salvadore
Dali Museum in St. Petersburg. "If they get moisture, is
that an emergency? Or a hospital with a contamination concern?"
Defect claims
in a warehouse are far different from buildings occupied
by people and businesses, he said.
When it comes
to the pocketbooks of commercial owners, they are likely to challenge
the notice-deadline requirements, he said.
"I guarantee
a lot of commercial owners will say I don't care if I have to
give notice or not, I have to keep my business open," Lesser
said.
But contractors will cite the notice requirements in state law
if an owner responds to an emergency, discovers a more expensive
defect and then notifies the contractor.
"That's
where you'll see the [lawsuit] floodgates open," he said.
Bohm agreed, saying it'll be up to a court to define an emergency
if property owners and contractors can't.
The amendment
also fails to protect owners from contractors who don't repair
defects that have traveled the claim process, she said.
"As
a consequence, [owners] spend 120 days going through this claim
process, and the net result is they are where they started,"
Bohm said. "Now they have to sue."
Other weak
links include disagreement over repairs, responsibility for payments
and the sharing of construction reports, plans and other documents.
"That's
where you'll see litigation," Bohm said."I still think
the majority of cases will be settled pre-lawsuit."
Terry Sheridan
can be reached at (954) 468-2614.
next
article
|
