If you’re a construction professional in Texas you’ve probably heard the term SOL or “Statute of Limitation”. For those that have not, Statutes of limitation are laws creating time limits for plaintiffs to bring suit against defendants for various reasons. The statutes generally differ depending on cause of action forming the basis for the suit. For example, generally injury claims must be brought within two years of the discovery of the injury while breach of contract claims are allowed within four years of the breach.
However, what is less commonly mentioned in the construction space is the statute of repose. Tex. Civ. Prac. & Rem. Code Ann. §§ 16.008 and 16.009 bar actions against persons who either design or make improvements to real property, unless brought within 10 years. The sections apply to suits for injury, damage, or loss to real property and to suits for personal injury.
Why is any of this important? Well, with a statute of repose, the time period begins running when the improvement is substantially completed rather than when a cause of action accrues. See Tumminello v. U.S. Home Corp., 801 S.W.2d 186, 187-88 (Tex. App.–Houston [1st Dist.] 1990, writ denied). Therefore, a statute of repose can cut off a right of action before an injured party discovers or reasonably should have discovered the defect or injury. Johnson v. City of Fort Worth, 774 S.W.2d 653, 654 n.1 (Tex. 1989) (per curiam). What this means is that even though a potential party’s statute of limitation has not expired because they have not discovered their injury, if the work causing the injury has been completed for 10 or more years, the claim is likely to be barred.
This is why it is important to accurately document the work being completed on every project. Documentation of each individual subcontractor’s substantial completion of their work can offer protection against a later suit. It is good practice for every contractor to keep these records and store them as they could great evidence to prevent future problems.
Nothing here is to be considered legal advice. If you are in the midst of a construction dispute you may want to consider giving us a call at 832-930-0529 or visiting www.StephensBell.com