Statute of Limitations vs. Statute of Repose
NCARB people and those with more Practice Management experience -- I'm currently studying for PcM and have run into what I see as conflicting information regarding the statutes of limitations and repose. I'm hoping someone can make this a little less muddy for me.
First up, we've got the Ballast 5.0 Review Manual (page 2-11):
"A statute of limitations sets a time limit within which a claim can be made. After the time limit, the claim is permanently barred.... In many states, the statute of limitations begins with the date of substantial completion."
"A statute of repose ... is similar to a statute of limitations, except that the time limit is usually much shorter and does not begin until the problem is first discovered...."
Next, the 15th edition of the Architect's Handbook of Professional Practice (page 1091):
"The governing law restricts the length of time that lawsuits (or arbitrations) may be filed after damages are incurred or after a defect occurs or is discovered. This time period is established by a statute of limitations. Most states have also adopted another type of time restriction on claims against construction contractors (and architects) established by a statute of repose. Unlike a statute of limitations, a statute of repose begins to run at the end of construction or whenever services were last provided."
Maybe I've been staring at these resources for too long now, but it seems like one of these has got to be backwards. A brief Google search turned up results that seem to agree with the Architect's Handbook of Professional Practice. I also checked for errata on Ballast's website -- this has not been reported yet (if it is the incorrect one).
Can anybody enlighten me/elaborate on this?
Thanks,
Stephanie
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Funny, I just ran across the same conflict the other day and considered posting here about it, but a little research uncovered the answer. I don't have the Ballast review manual but found a similarly misinformed quote in the Handbook of Pro Practice.
As far as I can tell:
a Statute of Limitations begins running from the date in which the damages are discovered
a Statute of Repose begins running from the date of substantial completion
It is a little frustrating that the sources are so poorly assembled, but it seems this is a common mistake (with our lawmakers even allegedly confusing the two https://en.wikipedia.org/wiki/Statute_of_repose)
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Cedric is right. Ballast did a terrible job proof reading their 5.0 book. Any time you're like, "Huh that doesn't add up," regarding Ballast, you're most likely right.
I like to think of Statute of Repose as the "flaw" is just sitting around (reposed) waiting to be discovered, within the set amount of time, which is usually set by the state, it's often something like a 10-year period. If it's discovered after the statute is over, then it's no longer the designer or contractor's liability. That way you can't be held accountable for a building like 30 years after it was built.
The statute of limitations is set to encourage timeliness of reporting flaws as soon as they're discovered. It's similar to the contract provision where if the contractor discovers something on site that is incorrect he/she must report it within 21 days.
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Thanks Cedric and Jennifer!
I had been leaning towards Ballast having it backwards since I couldn't find another source that said the same thing they did. I suppose I'll add it to the (quite long) errata sheet PPI has going for that first edition... Happy that you guys could confirm that I wasn't missing something.
Stephanie
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It was actually a chapter in AHPP that ffirst give me the incorrect definition.
Since AHPP is a compilation of essays from different authors, there is a lot of repetitious information through the book. I first learned about repose v limitations in reading the definition in chapter 5.1 Architects and the Law, which mistates the definitions, and so I started out learning the wrong definition... since I made note of it and was pretty confident about it, I was surprised when I got the question wrong in a Ballast Practice Exam. The definition they gave in the answer explanation was correct (though I didn't know which one was right after first seeing that haha) but it led me to check AHPP. Since I have the ebook I did a search and cross referenced all the instances of "statute of repose" definitions in the book (there are at least 2 or 3) and realized that, of course, the only one I had read was the only incorrect one.
As I said before, seems to be a very common mistake.
The benefit to all these shenanigans? I won't forget the difference between Statute of Repose and Statute of Limitations for the rest of my life!
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Here are definitions from 'The Architect's Handbook of Professional Practice' glossary:
Statute of limitations: A statute specifying the period of time within which legal action must be brought for legal relief after an alleged injury or damage has occurred. The lengths of the periods vary from state to state and depend upon the type of legal action.
Statute of repose: A statute limiting the time within which an action may be brought, without relation to whether injury has yet occurred or been discovered. The time begins when a specific event occurs, such as substantial completion of a project, and the statute of repose may extinguish the remedy even before a cause of action has accrued.
In regard to statute of repose starting point It further defines: "Unlike a statute of limitations, a statute of repose begins to run at the end of construction or whenever services were last provided." which in my view is at the final completion.
On the other hand, in 'Professional Practice: A Guide to Turning Design into Buildings' Paul Segal states that "statute of repose provides a time limit on the right of a plaintiff to bring an action. The beginning of the time limit, or trigger date, may be either substantial completion or when the potential problem was observed (vague and hence undesirable)."
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Jennifer is right, the key word here is "repose" which means to lay dormant, undisturbed.
LIMITATIONS: The clock doesn't start ticking until you find the construction flaw. You then get a limited time to report the flaw.
REPOSE: Clock starts ticking when the work is done. If you don't find the flaw in time, you eventually miss your chance at holding someone liable for it.
Another key thing is that a Statute of Repose can nullify/cap a Statute of Limitations.
A simplified example:
Statute of Limitations = 4 years
Statute of Repose = 4 years
You contract someone to replace your window. They replace the window in May of 2010, and the work is signed off.
In May of 2013, you notice a bad construction detail causes the window to leak.
Although the Statute of Limitations gives you 4 years worth of time now that you found the flaw (up until May 2018) you really only have 1 year left to file a claim because the Statute of Repose cuts you off in May 2014 (4 years from the date of completion in May 2010).
This is the rationale behind Ballast's practice exam question regarding how long you should keep project records. Once the Statute of Repose is up, you're in the clear regardless of the Statute of Limitations.
That's how I understand it, anyway. I too learned this the wrong way initially from AHPP chapter 5.1 and have since spent a day unraveling it.
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This video helped me: https://www.youtube.com/watch?v=c0S_LHMAMMo
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Statute of Repose vs Statute of Limitations
Statute of Repose: a hard deadline on the time window, in which an owner can sue the architect. Imagine a statute of repose of 10 years from substantial completion. If a leaky roof slowly rots the rafters, and the leak started before the 10-year mark, but the discovery of the rotten rafters occurred after the 10-year window, the owner waives the right to take the architect to court.
Statute of Limitations: a more flexible deadline. Imagine instead there is a 10-year statute of limitations from substantial completion. Now the judge has the flexibility to rule that because the leak started before the time limit, the suit can proceed even though the discovery of the rotten wood occurred after the 10 year time limit.
Most states have both statutes of limitations and statutes of repose automatically written into law. So there may be a six year statute of limitations (leak arrived within six years but rotten wood not discovered until seven years: okay to sue) with an nine-year statute of repose (hard deadline after 9 years: even if the leak occurred within six years, no liability after nine). Some states--I’m talking to you New York and Vermont-- have no limit on the length of time that the architect is exposed to a lawsuit.
Most states respect the “private law” of the contract. In other words, if an architect and owner agree on a different deadline in advance, the contract deadline will supersede the state’s default time windows. The AIA agreement spells out that the statute of repose stop-watch for litigation begins at substantial completion and extends to either
The state’s default statute of repose or
Ten years
Whichever is shorter.
As you may imagine, the architecture profession generally advocates for the certainty associated with statutes of repose that begin upon substantial completion, while the owners often advocate for the flexibility of statutes of limitations, or write their own contracts where the clock begins ticking upon the discovery of the defect, rather than at substantial completion. If the owner or other third party can theoretically sue forever, when can the architect cease carrying liability insurance after retirement? How can a firm that purchases another firm assess the risk that some long-ago error, perpetuated by the purchased firm, might resurface?
In both types of statutes, the clock can begin ticking either when an event occurs (i.e. substantial completion) or when the harm is discovered (i.e. rotten wood discovered). In the AIA contracts, and therefore in the ARE, we focus on the statutes of repose where the clock starts at substantial completion --Michael Ermann, Amber Book creator
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