What Triggers the Statute of Repose on Multi-Phase Project?

It’s a controversial decision on a controversial topic, but a federal court judge has held that the statute of repose on a multi-phase project was triggered by the last phase, and not sooner.

In Massachusetts, the six-year statute of repose clock starts to run at substantial completion. At the end of six years, all tort claims against contractors, designers and others involved with the project are cut off. The statute of repose does not affect contract claims. But for property owners who did not contract directly with the original builder or designer, a tort claim may be the only viable cause of action. Thus the importance of the six-year period and exactly when it starts (and ends).

The project at issue had 150 condo units in 28 buildings, built, sold and occupied over a span of years. At the time the condo association filed suit, five or six of the buildings had been substantially complete for more than six years.

The developer moved to dismiss some of the claims, arguing that the statute of repose should be applied to each component or building that had been substantially complete beyond the repose period. The condo association countered with the argument that “substantial completion” should be applied to the project as a whole, and not to individual buildings. Thus, the condo association argued that the common areas were not substantially complete until the entire project was substantially complete. Each side pointed to prior court decisions claimed to support its position.

The court acknowledged that an individual unit or building can be an “improvement to real property” triggering the repose clock. But the court went on to say: “The question, instead, is whether the construction of a portion of a project can constitute completion of an improvement for triggering the repose period even while the overall project remains underway.” Posed in that manner, for this project, the court held that the repose period did not start until the entire project had been built, and claims concerning the early buildings would not be dismissed.

The case is D’Allessandro v. Lennar Hingham Holdings, LLC, 2019 U.S. Dist. LEXIS 185874 (Oct. 28, 2019) (subscription required).