Statute of Repose VS Statute of Limitation

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    Michael Ermann

    Chuanyangjie, The statute of limitations and statute of repose can both start at any time agreed upon in the contract (like at substantial completion). . . or absent a note about these in the contract, will default to whatever state laws establish. The difference is not so much about when the clock starts on a warrantee, as it is about when the window closes for an owner to file a claim. "Limitations" allows the owner to assert that the problem started before the warrantee ended, even if the problem was discovered after the warrantee ended. "Repose" more strictly limits the end of the warrantee: if the problem is found after the warantee ended, the owner is out of luck. To make matters murkier, there is often both a statute of limitations and a statute of repose for the same project!

    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

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    Rabeea Alkhazraji

    If you check out the definition in the back of AHPP which have the right definition for each statute law.

    Good luck,

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    Valerie Galchenko

    Statute of Repose is a claim based on negligence for design professionals or others, 3 to 10 years after substantial completion (each state has its own time limits) 

    Statute of Limitations sets time limits under which claims can be made, commencing when the alleged digression is discovered, normally 10 years (each state has its own time limits). 

    https://realestate.findlaw.com/construction-defects/construction-defect-laws-by-state.html

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    Giovanni Succi

    The information reported from FindLaw.com seems different with both Ballast and the AHPP definitions of these statutes:

    Michael,

    are you saying that the definitions from Ballast and the AHPP are not aligned with the AIA definitions?

    "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"

    If this paragraph is correct, why are the definitions on the AHPP and Ballast (both primary ARE preparation resources) instead focusing on the Statue of Repose where the clock begins at time of discovery?

    At test time, how are we supposed to answer, let alone understand, questions regarding these concepts?

    Thank you

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    Giovanni Succi

    Actually,

    as Rabeea noted above, the AHPP definitions at the Appendix "B", Glossary, gives the same definitions as FindLaw.com (and are thus inconsistent with its own definitions on p.175).

    Can we have confirmation that the following are the correct definitions?

    Statute of Limitation: (generally) from time of discovery

    Statue of Repose: (generally) from time of substantial completion

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    Giovanni Succi

    I have edited the Ballast definitions as follow: does it look correct?

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    Michael Ermann

    Yeah, AHPP has some conflicting information on this topic (and is wrong at least once). . . . a few months ago someone wrote on the ARE Facebook Group that--for that reason--the ARE has stopped testing on this topic. . . but I haven't confirmed that.

    You had asked "are you saying that the definitions from Ballast and the AHPP are not aligned with the AIA definitions?". . . I guess I'm saying that the definitions from Ballast and the AHPP are not aligned with THE definitions, and I'd (obviously) go with the correct definitions over the error. I suspect that AHPP made the error originally and Ballast ran with it. Neither publication is famous for having a single author who is accountable for fixing this kind of relatively common error, so errors tend to persist and echo through to later versions.

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    Giovanni Succi

    Thank you Michael,

    much more clear now.

    Regards

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    Caleb Sayers

    Thanks to everyone contributing here. I just got a practice test question wrong on something I thought I knew cold. The fact that something this important is wrong in the AHPP is pretty frustrating. Hopefully it's true that the ARE isn't asking about this-- if it hadn't been for that practice test-- there'd be no way for me to know I was wrong on this until I got sued. 

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    Ludovic Gabaron

    AIA Doc B101 - 2017
    Article 8 CLAIMS & DISPUTES

    8.1.1 [...] but in any case not more than 10 years after the date of Substantial Completion of the Work [...]          

    8.3.1.1 [...] but in no event shall it be made after the date when the institution of legal or equitable proceedings based on the claim, dispute or other matter in question would be barred by the applicable Statute of Limitations.[...]

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    Siobhan Schramm

    Here is a link that I found super helpful for additional clarification. It discusses how the two relate to each other, and where in the AIA contracts (A101, B101, and A201) it is referenced.

    https://www.passtheare.com/statute-of-repose-vs-statute-of-limitations/ 

     

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