This is part 16 of Randy Sawyer’s 16 Part series on UCIOA. You can read previous posts here.
Section 88, subsection (g)
88(g) – In the event that no settlement agreement and releases are executed with respect to any phase of completed common elements or improvements during the period of declarant control of the executive board of the association, any statutes of limitation or repose applicable to such phase shall be extended for a period of one year after the assumption of control of the executive board by unit owners other than the declarant. In addition, the declarant controlled board shall not be obligated to commence suit for any such claims during its period of control.
This provision of Section 88 seeks to limit the statute of limitations on construction defect claims to one year following the transition of control of the Association from the developer to the independent unit owners. Under current law, the independent unit owners get six years from the date of transition for statutes of limitations and ten years from the date of transition under the state statute of repose (at a minimum as to claims against the developer). This provision, therefore, severely limits current legal rights. There is no benefit here to anyone other than the developer. This provision would allow a developer to conceal the existence of defects during the entire time it controls the Association, which could be several years, then turn over control to the independent unit owners. Then, if the independent unit owners do not discover the defects or act upon them within one year of getting control, they could possibly lose the claim entirely.
This provision also completely eliminates the well settled fiduciary duty that board members appointed by the developer to the developer-controlled Association have to ferret out defects and deal with them, be it by lawsuit or otherwise. In other words, they have no liability whatsoever for burying their heads in the sand.