Recent MN Supreme Court Decision Affects Construction Defect Claims for Condominiums

January 17, 2020
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In a decision that is likely to have far-reaching impact in Minnesota construction law, the Minnesota Supreme Court issued a decision this week that fundamentally changes how to calculate certain warranty periods and statutes of repose for construction defect claims.

 

In Village Lofts of St. Anthony Falls Association v. Housing Partners III-Lofts, LLC (No. A18-0256), the Court held that in the case of a condominium building and the new construction statutory warranties set forth in Minn. Stat. Ch. 327A, there is a single warranty date for the condominium building, rather than separate warranty dates for each condominium unit.  The implication of this holding is that the warranty period for any and all units in the building begins to run as soon as the earlier of when the first condominium unit owner in the building takes title to or occupancy of the unit.  The Court acknowledged that one consequence of this holding is that some unit owners may never receive the benefit of the one- or two-year warranties because by the time those owners take title to the property (which might be a year or two after the initial unit owner triggered the running of the building’s warranty period), the warranty period has already expired.

 

The Supreme Court also held that in the case of a condominium with multiple buildings that each meet the Court’s test for constituting an “improvement to real property,” the ten year statute of repose set forth in Minn. Stat. §541.051 is measured separately as to each building, and begins to run when the individual building is sufficiently complete so that it can be turned over to the owner for its intended purpose.

 

This summary is provided by the construction law attorneys of TTLO Law.  Please reach out to us if you have any questions about how this new decision could affect you or your business.