Good News for the Apartment Industry from the Ninth Circuit Court of Appeals

A panel decision affirmed two lower court rulings that the two-year statute of limitations for civil actions alleging defective design and/or construction under the Fair Housing Act begins to run when the property is first occupied, and not when the alleged violation is discovered. The cases at issue involved apartment communities in the Las Vegas area and in Idaho. The court said that a failure to design or construct properly is not a "continuing violation", but is a discrete act, which is over with at the end of the design and construction stage (as a practical matter, this would mean at the end of the construction stage).

If this opinion stands up on appeal, it will be very good for the apartment industry. It will limit litigation in states covered by the Ninth Circuit (California, Oregon, Washington, Arizona, Montana, Idaho, Nevada, Alaska and Hawaii). Both plaintiffs have filed petitions for panel rehearing and rehearing en banc (Garcia on October 4, 2007 and Thompson on November 6, 2007)

The case is Garcia v. Brockway, 503 F.3d1092 (9th Cir.2007)

(This entry published by Karen Estelle Carey, A member of the Real Estate Development group)

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