In a win for developers, Supreme Judicial Court says six-year clock for design and construction defect claims runs separately for each building within condominium development.
On November 3, the Supreme Judicial Court (SJC) made it harder for condominium owners to bring design or construction defect claims against developers. The case, D’Allessandro v. Lennar Hingham Holdings, LLC, concerns a Massachusetts “statute of repose” that requires claims challenging the “design, planning, construction or general administration of an improvement to real property” to be raised within six years of “the opening of the improvement to use” or “substantial completion of the improvement.” The SJC addressed how the term “improvement” applied to a multi-building condominium development and held that a separate six-year clock starts ticking as each building is completed, irrespective of when the overall project is finished.
Though originally filed in Massachusetts Superior Court, the case is now before the U.S. District Court for the District of Massachusetts. It involves a 150-unit, twenty-eight building condominium development constructed over the course of twenty-four phases in Hingham, Massachusetts. The condominium trust sued the contractor of the project, claiming there were design and construction defects in common areas. The contractor argued that because six of the buildings in the development were completed more than six years before the lawsuit was filed, the statute of repose required all claims related to those buildings be thrown out. In October 2019, the District Court disagreed, reasoning that “improvement” referred to the entire condominium project and plaintiffs therefore had six years from the project’s completion to bring their claims. Yet because the SJC had never addressed this precise question of state law, the District Court certified the issue to that court.
The SJC came to the opposite conclusion, reasoning that the legislature intended the statute of repose to limit the liability of contractors and other design and construction professionals. Accordingly, the SJC held that each building in a multi-building condominium development qualifies as an “improvement” for purposes of the statute of repose. Going forward, potential plaintiffs should be sure to file suit within six years of the completion or opening of the particular building at issue, even if it took longer for the entire project to be completed. And, as the SJC itself recognized, this case’s holding creates a problem where developers retain control of the condominium association–and, by extension, the right to bring claims related to common areas–until the entire project is completed. The significant limitations imposed by the SJC’s ruling may prompt the state legislature to fast-track ongoing efforts to clarify the statute of repose, which has not been amended since 1984.