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Statute of Repose Bill Signed Into Law - April 18, 2017

Statute of Repose Bill (SF413)

What Does the New Statute of Repose Law Mean for Me?

On April 13, 2017, the Governor signed SF413 into law, which is a law reducing the Statute of Repose applicable to construction claims. This is great news for the Iowa construction industry.

 

As noted in a prior alert, this law will reduce Iowa's current 15-year Statute of Repose for all claims arising out of a defective or unsafe condition of an improvement to real property to 8 years for commercial construction and 10 years for residential construction. Please note that the law has the following exceptions:

  1. claims regarding nuclear power plants, interstate pipelines, and fraud/intentional misconduct claims will maintain a 15-year repose period, and
  2. if the unsafe or defective condition was discovered within one year of the expiration of the new statute of repose period, then the repose period would be extended for one additional year.

When Does the New Statute of Repose Law Take Effect?

The new statute of repose law will take effect on July 1, 2017. The law does not have any retroactive effect. In addition, the law contains an express provision regarding applicability:

 

Sec. 2. APPLICABILITY. This Act does not apply to an improvement to real property in existence prior to the effective date of this Act or to an improvement to real property, whether construction has begun or not, that is the subject of a binding agreement as of the effective date of this Act.

 

This means that, if the construction project has not begun as of July 1, 2017 and if your company's construction or design agreement has not yet been executed as of July 1, 2017, then the new, shorter statute of repose will apply to your company.

 

Conversely, the old 15-year statute of repose applies if either the "improvement to real property" is already "in existence" as of July 1, 2017, or your company has already signed "a binding agreement" regarding the construction project as of July 1, 2017 regardless of whether construction on the project has begun.

 

Please contact attorney Jodie McDougal should you have any questions regarding this bill.