Wade Clark Mulcahy LLP

The Pennsylvania Statute of Repose, 42 Pa.C.S. § 5536, provides a defense in construction defect cases by barring those lawsuits against builders or design professionals performing lawful improvements to real property which are filed more than 12 years after the date construction is completed. The Superior Court of Pennsylvania recently clarified the point at which the statute begins to run and what is considered “lawful” construction.    

In Aloia v. Diament Building Corp., a certificate of occupancy for a newly built home was issued on March 30, 2006. Another certificate of occupancy for additional work on the basement was issued on February 20, 2007. In 2016, plaintiffs considered purchasing the property and contacted defendant Diamet Building Corp., which performed work on the initial construction. Diamet attested to the quality of the work on the property, so plaintiffs completed the purchase.

In October 2018, the home experienced water infiltration which plaintiffs’ engineer found to be caused by defects in the initial construction, specifically the exterior building envelope system. Plaintiffs did not file suit until March 2021, and Diamet successfully moved to dismiss on the basis that the lawsuit violated Pennsylvania’s Statute of Repose for construction defects.

On appeal, plaintiffs argued that the statute did not apply because the construction was not “lawful” since Diamet allegedly violated an applicable construction code. Relying on its earlier holding in Johnson v. Toll Bros., 302 A.3d 1231 (Pa. Super. 2023), the Superior Court disagreed and held that regardless of possible violations of local, state and federal construction rules, the construction is deemed complete and “lawful” for purposes of the statute of repose once a certificate of occupancy is issued by the appropriate authority. Thus, Pennsylvania’s 12-year time period under the statute begins upon the issuance of the certificate of occupancy.

The Court recognized that the initial certificate of occupancy was completed in March 2006 while the certificate of occupancy for the basement work was issued in February 2007. Since the lawsuit was filed more than 12 years after the issuance of the 2007 certificate of occupancy, the Court found that the statute bars plaintiffs’ claims against Diament as a matter of law. The Court also rejected plaintiffs’ argument that the statute does not apply because the construction was not actually completed at the time the certificates of occupancy were issued, finding that such allegations do not circumvent the issuance of a certificate of occupancy as the “triggering event” that initiates the statute of repose.

The Alioa decision confirms that the issuance of a certificate of occupancy is the key event that triggers the statute of repose for construction defect claims and provides the basis for proving that the construction at issue was “lawful” for an application of the statute. Whether a defendant violated a certain code or standard is not relevant in determining whether the statute applies.