What is the difference between a statute of limitations and a statute of repose?

If you have problems with a commercial construction project, you must be sure to assert your legal rights timely, or they will be waived. Two critical “deadlines” to keep in mind are the statute of limitations and the statute of repose. There are some key differences between the two, but both are designed to allow the defendant to:

• Request proof of injury;
• Hire its own inspectors to view the project;
• Have the opportunity to make repairs or corrections; and
• Make an offer of settlement.

Statute of Limitation

The statute of limitations is a law that puts a time limit on a plaintiff’s right to file a civil lawsuit after injury.

As an example, if a building owner discovers that its newly constructed commercial building is exhibiting demonstrable defects caused by errors in construction, engineering or architecture, the building owner will have a specified amount of time to take action on a lawsuit. The most common causes of action asserted for defective design and/or construction are negligence, breach of contract, breach of warranty and fraud.

In Texas, the current applicable statute of limitations provides that, in general, negligence claims must be brought within two years. Claims for breach of contract, breach of warranty, and fraud must be brought within four years. However, these statutes of limitations are subject to the “discovery rule,” which means that the statute of limitations is measured from the date the building owner knew, or in the exercise of reasonable diligence should have known, of the wrongful act and resulting injury.

Statute of Repose

Although the Legislature has grouped statutes of limitations and statutes of repose together in Chapter 16 of the Civil Practice and Remedies Code under the general heading of “Limitations,” there are significant differences between the two types of provisions.

While statutes of limitations operate procedurally to bar the enforcement of a right, statutes of repose take away a right altogether. Specifically, a statute of repose takes away a plaintiff’s right to pursue claims altogether after a certain date in time, in order to protect potential defendants from indefinite potential liability.

The Texas Legislature has enacted a current repose provision which allows property owners to file claims against contractors regarding latent defects and deficiencies in construction or repairs of property for up to ten (10) years after the date of substantial completion of the construction work. However, the Legislature also specifically exempted political subdivisions of the State, including school districts, cities, and counties, from statute of limitations time periods for construction defect claims. As a result, political subdivisions of the State must file their claims not later than ten (10) years after the date of substantial completion of the building or other improvement.

In addition, if any Texas property owner presents a written claim for damages, contribution, or indemnity to a contractor, architect, engineer, interior designer, or landscape architect within 10 years after construction is substantially completed, the statute of repose time period may be extended for two years from the day the claim is presented.

Calculating the date when a statute of limitations or a statute of repose cuts off your right to file a lawsuit can be tricky, so it is best to protect your legal rights by consulting an attorney experienced in construction defect litigation.

“Property owners who are faced with costly repairs because of design or construction defects can look to Pearson Legal for help in obtaining a successful resolution,” said Valerie Cantu, Pearson Legal’s Senior Counsel.

Don’t let contractors ignore their contractual duties and write their own rules. Contact the experts at Pearson Legal, P.C.