When Does the Statute of Repose Begin to Run in Phased Development Projects?

Christopher Sweeney | Conn Kavanaugh

The Massachusetts Statute of Repose requires litigants to assert within six years all tort claims arising out of the design, construction, or administration of improvements to real property. The Statute begins to run upon the earlier of: (1) the opening of the improvement to use; and (2) substantial completion and the owner’s taking of possession. It acts as an absolute bar to tort claims filed more than six years after the earlier of these two milestones. These principles are well-accepted.

But what happens when a project involves phased development – where, for example, a developer constructs condominium buildings over a series of years? Does the Statute of Repose begin to run only upon substantial completion of the entire project? Or is each phase considered a distinct improvement for purposes of triggering the Statute?

Last month, a Massachusetts federal judge asked the Supreme Judicial Court for guidance on this issue. In that case, the trustees of a 28-unit condo association brought suit against the condo’s developer for negligent construction of the condo’s common areas. The developer moved for partial summary judgment, arguing that it substantially completed six of the condo units more than six years before the trustees brought suit, and that the Statute of Repose therefore barred claims as to those units. The court rejected that argument, and held that the condo project constituted a single improvement – as opposed to a series of distinct improvements – under the Statute of Repose. But, noting a total lack of appellate authority on the issue, the Court granted the developer’s motion to certify the question to the SJC.

The SJC’s ruling on this issue will have significant implications for landowners and construction-industry professionals. If the court adopts the developer’s view of the Statute of Repose, condo owners will need to move more quickly to preserve their rights. On the other hand, if the condo trustees prevail, developers and other construction professionals will need to be prepared to defend latent claims that could be a decade or more old by the time they are filed.

The SJC is soliciting amicus briefs on this issue. A decision is expected sometime this summer.

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