Lawrence E. Gursten ( Civil Law )
Arkansas Code § 16-56-112 cuts off liability for construction defects five years after substantial completion of the project. Property damage, breach of warranty, negligence, contract, does not matter what the claim is called. Five years from the day the work was substantially done and the right to sue disappears, even if the defect has not shown up yet, even if no one could have found it.
Personal injury or wrongful death from a construction defect gets four years instead of five. And if the injury happens in the third year after completion, there is a one-year extension, but the absolute ceiling is still five years.
Two states in the country have no statute of repose at all. New York and Vermont. Arkansas is not one of them.
A Student Housing Project in Fayetteville, a $13.5 Million Loss, and a Clock That Ran Out
Thompson Thrift Construction v. Modus Studio, 2025 Ark. App. 193.
West Center Partners owned a student housing project in Fayetteville. Construction defects turned up after the building was finished. They sued the general contractor, Thompson Thrift, in July 2019. Thompson Thrift turned around and filed third-party claims against Modus Studio, the architect, and several subcontractors.
Then the case got tangled.
The third-party complaint against Modus was dismissed without prejudice in December 2020. Thompson Thrift did not appeal. An arbitration proceeded between West Center Partners and Thompson Thrift alone, and the arbitrator came back with a $13,529,726 award against Thompson Thrift. Thompson Thrift paid it.
So now Thompson Thrift is sitting on a $13.5 million loss and needs to recover from the architect and subs who actually did the work. They refiled, 364 days after the dismissal, well within the one-year savings statute under § 16-56-126.
One problem.
More than seven years had passed since the project was substantially completed. The five-year repose period under § 16-56-112 was long gone.
The question the court had to answer
Can the savings statute rescue a claim that was originally filed on time but refiled after the repose period has expired?
The circuit court said no. Repose kills it. The savings statute does not override the absolute cutoff.
The Court of Appeals reversed. Judge Brandon Harrison wrote the opinion and opened it by pointing out that the Pantheon in Rome has been standing for more than 1,900 years and if it collapsed tomorrow the statute of limitations would give an injured person three additional years to sue the builders. He noted that his panel “would take the defense side of that case.”
The actual holding: the savings statute does allow refiling even after the repose window closes, as long as the original action was filed within the repose period and the refiling happens within one year of the dismissal. The statute of repose is an absolute bar to initiating a new action. Refiling a timely-commenced action under the savings statute is not the same thing as initiating a new one.
That distinction saved a $13.5 million claim.
What “Substantial Completion” Means and Why Getting It Wrong Costs You the Case
The five-year clock does not start when the last nail goes in or when the final inspection passes. It starts at “substantial completion,” and Arkansas courts have treated that as a factual question depending on the circumstances.
Is it when the owner takes possession? Sometimes. Is it when the certificate of occupancy issues? Sometimes. Is it when the contractor considers the work done? Sometimes but not always, because the contractor’s opinion of when they finished is not dispositive if punch list items are still outstanding or if the owner has not accepted the work.
The vagueness matters because a dispute over when substantial completion occurred can mean the difference between a live claim and a dead one. If the contractor argues substantial completion happened in March 2020 and the owner argues it was September 2020, that six-month gap determines whether a lawsuit filed in June 2025 is inside or outside the five-year window.
In Thompson Thrift the substantial completion date was not contested, which kept the focus on the repose-versus-savings-statute question. But in cases where it is contested, the fight over the start date can be just as important as the fight over the defect itself. Construction contracts that define substantial completion clearly, with a specific milestone or certification requirement, give both sides something concrete to point to. Contracts that leave it vague hand the issue to a judge.
The Fraudulent Concealment Exception
Arkansas § 16-56-112 does not apply when the defect was fraudulently concealed.
That exception is narrow and courts have kept it narrow. The owner has to prove the builder or design professional knew about the defect and actively hid it, not just that they were negligent or that they should have caught it. Negligent failure to discover a defect is not concealment. Deliberately covering a cracked foundation with drywall before the final walkthrough is.
The burden falls on the plaintiff to prove both the concealment and the intent behind it, which in practice means you need something like internal communications, testimony from a worker who saw the cover-up, or physical evidence showing the defect was addressed cosmetically but not structurally.
Does this come up often?
Less than you would expect. Most construction defect cases involve workmanship failures or design errors that nobody was deliberately hiding, the defects just did not surface until years later. The fraudulent concealment exception exists for the genuinely bad actors and courts have not expanded it beyond that.
The Three-Year Negligence Statute Still Runs Separately
Something worth clarifying because it trips people up. Arkansas has two clocks running at the same time in construction defect cases, and they interact in ways that are not immediately obvious.
The statute of limitations for negligence causing property damage is three years from when the owner discovers or reasonably should have discovered the defect. That is the discovery rule and it protects owners who could not have known about a hidden problem.
The statute of repose under § 16-56-112 is the outer wall. Five years from substantial completion regardless of discovery.
So if a roof defect shows up in year two after completion, the owner has three years from discovery to file, which means year five is the deadline. Both clocks line up and the owner makes it.
But if the same defect does not show up until year four, the three-year limitations clock would run to year seven. The repose clock says year five is the absolute cutoff. Repose wins. The owner has one year, not three.
And if the defect surfaces in year six, there is no claim at all. The repose period ended at year five and the discovery rule does not save it.
The interaction between these two clocks is where cases get lost. An owner who discovers a defect and assumes they have three years to act may not realize the repose deadline is closer than the limitations deadline. By the time they get around to filing, the five-year window has closed and the discovery rule cannot reopen it.
For property owners in Northwest Arkansas who suspect a construction defect, the practical question is not just “how long ago did the problem appear” but “how long ago was the construction finished.” Working with a construction defect litigation attorney in Rogers, AR who tracks both deadlines is how you avoid finding out about the repose clock after it has already expired.
What Types of Claims Fall Under the Repose Statute
Section 16-56-112 covers claims “caused by any deficiency in the design, planning, supervision, or observation of construction or the construction and repairing of any improvement to real property.” That language is broad enough to sweep in most construction-related claims but there are edges.
- Contract claims for breach of warranty: covered, five-year repose from substantial completion.
- Negligence claims for personal injury: covered, four-year repose.
- Products liability claims against a material manufacturer: may or may not be covered depending on whether the manufacturer is considered a person “performing or furnishing” construction. A lumber supplier who just delivered wood to the jobsite is different from a roofing manufacturer whose defective product was incorporated into the structure.
Claims against the property owner by a third party: not covered. The repose statute protects design and construction professionals. The property owner does not get to use it as a shield.
One wrinkle that came up in the Themis analysis of the Thompson Thrift decision: Arkansas’s repose statute is considered more rigid than its neighbors. Kentucky gives claimants seven years with a one-year extension. Mississippi gives six years. Tennessee gives four for property damage but ten for certain deficiencies. Arkansas gives five with no extension mechanism beyond the savings statute, and until Thompson Thrift it was not even clear the savings statute applied.
The Implied Warranty of Habitability Still Applies
Separate from the statute questions, Arkansas recognizes an implied warranty of habitability in new residential construction. The builder is expected to deliver a home fit for its intended use and free of significant defects regardless of what the contract says.
This warranty is not unlimited. It covers latent defects, problems that a reasonable inspection at the time of purchase would not have revealed. It does not cover defects the buyer knew about or should have caught during a standard inspection.
The warranty runs with the property in some circumstances, meaning a second buyer may be able to assert it against the original builder. But the repose statute still applies. If the implied warranty claim is filed more than five years after substantial completion, § 16-56-112 bars it the same way it bars any other construction defect claim.
What Thompson Thrift Changed Going Forward
Before this decision, the conventional reading of Arkansas law was that the statute of repose was a hard wall that nothing could breach. If five years passed and you had not filed, done. The savings statute was understood as a tool for refiling dismissed claims within the limitations period, not beyond the repose period.
The Court of Appeals split that apart. The repose statute bars new actions. The savings statute preserves already-commenced actions. A timely-filed claim that gets dismissed without prejudice is not a new action when it gets refiled within a year. It is a continuation of the original timely-filed action.
That distinction is technical but the practical impact on a $13.5 million claim was the difference between total loss and a live case. For any contractor, architect, engineer, or subcontractor in Arkansas who assumed repose was an absolute defense after year five, Thompson Thrift introduced a variable they need to account for.
And for property owners, it is a reminder that how a case gets managed procedurally, when it gets filed and what happens if it gets dismissed, can matter just as much as the underlying facts about the defect.
