Does the ten year period of repose begin after a certificate of occupancy is issued?

Does the ten year period of repose begin after a certificate of occupancy is issued? This question was answered in the negative by Fairview Heights Condominium Association, Inc. v R.L. Investors, Superior Court of New Jersey, Appellate Division (Docket No. A-3128-11T3).

In that case, construction of a condominium building owned by defendant was completed in 1988. Plaintiff filed a complaint against defendant two years after purchasing the condominium building from defendant in 2001. The lawsuit alleged that plaintiff had suffered damage from hazardous construction defects.

Defendants moved for summary judgment, which was granted. Although the Court found that the condominium building was in an unsafe condition due to defective construction by defendants, it determined that the claim was barred since

“the statute of repose bars any action whether grounded in contract or torn arising out of the defective design or construction of an improvement to real property or arising out of the defective and unsafe condition of an improvement to real property.”

Fairview Heights I, supra, No. A-0225-10 (slip op. at 15-16).

Plaintiff appealed, and the Appellate Division affirmed the lower Court ruling.  

In its determination, the Appellate Division cited the Supreme Court of New Jersey’s decision in Russo Farms v. Vineland Board of Education 144 N.J. 84 (1996). In that case, the Supreme Court held that the test for determining when the statute of repose would begin to run would be the point at which the construction had reached a stage of substantial completion.

The Appellate Division noted that this was in keeping with the trend among the majority of states. It determined that

“…the triggering point is tied to substantial completion of the construction project itself, rather than other factors such as obtaining a certificate of occupancy or, as plaintiffs would urge here, relinquishment of control…”

Id. 12

Is sum, the Appellate Division held that the claim was barred by the statute of repose because it would be unfair to permit the claims against defendant that are made more than ten years after substantial completion of the condominium building. 
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