Summary: The Hewitts Landing Condominium in Hingham, Mass., is comprised of 28 separate buildings containing a total of 150 units, constructed between 2008 and 2015. In 2017 the condominium association filed a lawsuit, based primarily on tort claims, against the developer, the contractor, the construction manager, and others alleging design and construction defects in the common and limited-common areas. The alleged defects included problems with decks and columns, roofing and flashing, building envelopes, and the irrigation system.
Massachusetts has a hybrid statute of limitations/statute of repose (“Section 2B”) that provides in part that “in no event” shall tort actions arising from design or construction be commenced more than six years after the earlier of:
a. the opening of the improvement to use; or
b. substantial completion and taking possession for occupancy by owner.
In federal court, the defendants sought partial summary judgment, arguing that Section 2B barred the claims with respect to 6 of the 28 condominium buildings. The federal court requested that the Massachusetts Supreme Judicial Court provide a definitive answer to the following question (paraphrased):
When does the six-year repose period for tort claims start running when a condominium is built in a continuous construction project comprising multiple buildings?
Decision: The Massachusetts Judicial Supreme Court summarized the question as “whether the statute of repose was triggered only once [at completion of all buildings]…or whether the statute was triggered multiple times, as each individual building…met the statutory requirements [was completed or put into use].” The court concluded that as each of the 28 separate buildings was completed, a separate repose period began running for that building. The full formal answer:
We respond to the certified question as follows:
Where a condominium development is comprised of multiple buildings, regardless of how many phases of the development there may be or how many buildings are within each phase, each building constitutes a discrete “improvement” for purposes of Section 2B, such that the opening of each individual building to its intended use, or the substantial completion of the individual building and the taking of possession for occupancy by the owner or owners, triggers the statute of repose under Section 2B with respect to the common areas and the limited common areas of that building. In addition, where a particular improvement is integral to, and intended to serve, multiple buildings (or the condominium development as a whole), the statute of repose begins to run when that discrete improvement is substantially complete and open to its intended use.
The defendants had emphasized to the court that the local municipality had issued certificates of occupancy for each individual building—and after such a certificate was in place the buildings were in fact put into residential use. The plaintiffs countered that in the context of a continuous multi-building project it made more sense to view this as a single project with a single trigger date for the statute of repose, based on the clear completion of all construction.
The court’s decision in favor of the multiple repose periods was supported by reflection on the reasons for enactment of the statute of repose. The statute of repose was a conscious effort to strike a “reasonable balance” between claimants’ rights to a remedy and fairness to the construction industry. As a previous Massachusetts decision had established, without a statute of repose:
Contractors and design professionals would need to mount a defense when design documents had already been discarded;
Building codes may have changed;
Witnesses may be dead or impossible to locate.
Comment: Nothing is said in this decision about the design and construction contracts. In the Nebraska case on a similar issue (item 3 above), it was significant that there was a single scope of work, and a single price for the full scope, suggesting a single project and a single date of substantial completion. Here, we may speculate that there were multiple contracts and a separate price for each building, especially given the lengthy time during which construction occurred; but this information is not in the record, and the facts may have been otherwise.
In its decision the Massachusetts Supreme Judicial Court did acknowledge that there may be “some difficulty” for condo buyers when the developer has retained control, or partial control, over a substantial period of time. Flaws or defects may arise, but the developer’s incentive to address them may be low—the problems will soon pass to the condo association, and “developers are not likely to agree to sue themselves.” As a result, the window of time in which the buyers may take action may be short. The court concluded that this was a problem that was outside the court’s purview, and could be addressed only by the legislature:
If there are any inconveniences or hardships growing out of [application of the statute of repose], it is for the legislature…to apply the proper remedy.”