No action to recover damages for any injury to property, real or personal, or for injury to the person, or for bodily injury or wrongful death, arising out of the defective or unsafe condition of a physical improvement to real property, nor any action for contribution or indemnity for damages so sustained, against any person performing or furnishing the construction or the design, planning, supervision, inspection or administration of construction of such improvement to real property, and on account of such activity, shall be brought after ten years from the date of substantial completion of such improvement; provided this limitation shall not apply to any action based on a contract, warranty or guarantee which contains express terms inconsistent herewith. The date of substantial completion shall mean the date when construction is sufficiently completed so that the owner can occupy or use the improvement for the purpose for which it was intended, or the date on which the owner does so occupy or use the improvement, or the date established by the contractor as the date of substantial completion, whichever date occurs last.

History: 1953 Comp., § 23-1-26, enacted by Laws 1967, ch. 193, § 1.

Continuing ownership. — Section 37-1-27 NMSA 1978 does not extend to owners who design and construct an improvement to real property and continue to own it after the ten-year period provided in the statute for bringing claims arising out of construction projects. Jacobo v. City of Albuquerque, 2005-NMCA-105, 138 N.M. 194, 118 P.3d 189, cert. quashed, 2006-NMCERT-005.

Triggering event is the date of substantial completion of a physical improvement to property. — Where plaintiff homeowners brought a lawsuit against their subdivision development company, claiming that their home was exhibiting signs of structural failure, the district court did not err in granting the development company's motion for summary judgment, because the triggering event for the ten-year statute of repose, under 37-1-27 NMSA 1978, is the date of substantial completion of a physical improvement to real property, and the evidence established that infrastructure improvements to the real estate were substantially completed by the development company more than ten years prior to plaintiffs' cause of action. Damon v. Vista del Norte Dev., LLC, 2016-NMCA-083.

Constitutionality. — The abrogation effect of this section on claims which accrue after the 10-year period does not violate the constitution. Terry v. N.M. State Hwy. Comm'n, 1982-NMSC-047, 98 N.M. 119, 645 P.2d 1375.

Rational basis scrutiny, rather than intermediate scrutiny, applies to assess the constitutionality of this section. Applying rational basis scrutiny, this section is constitutional. Coleman v. United Eng'rs & Constructors, Inc., 1994-NMSC-074, 118 N.M. 47, 878 P.2d 996.

Due process. — Where plaintiff was injured at site of a building that was completed more than 10 years previously, his claim that he had no cause of action at the time of the injury and that due process was violated because this section deprived him of a cause of action was without merit, since plaintiff had no right to damages when this section was enacted, and since the constitution did not forbid the abolition of old rights recognized by the common law, to attain a permissible legislative object. Howell v. Burk, 1977-NMCA-077, 90 N.M. 688, 568 P.2d 214, cert. denied, 91 N.M. 3, 569 P.2d 413.

Fundamental considerations of due process require that the 10-year limitation of this section not be applied to actions accruing within but close to the end of the 10-year period. Terry v. New Mexico State Hwy. Comm'n, 1982-NMSC-047, 98 N.M. 119, 645 P.2d 1375.

Reasonable basis for classification. — This section does not violate equal protection and is not special legislation under N.M. Const., art. IV, § 24, since there is a reasonable basis for distinguishing between those covered by the section and owners, tenants and materialmen. Howell v. Burk, 1977-NMCA-077, 90 N.M. 688, 568 P.2d 214, cert. denied, 91 N.M. 3, 569 P.2d 413.

Title adequate. — Reference in the title to "limitation on actions" logically and naturally connects with the no action provision of this section, and as the title provides reasonable notice of the subject matter, it does not violate N.M. Const., art. IV, § 16. Howell v. Burk, 1977-NMCA-077, 90 N.M. 688, 568 P.2d 214, cert. denied, 91 N.M. 3, 569 P.2d 413.

Application to unlicensed contractors. — Section 37-1-27 NMSA 1978 does not apply to unlicensed contractors. Little v. Jacobs, 2014-NMCA-105.

Where defendant constructed a deck for the property owner; defendant was not a licensed contractor when defendant built the deck; plaintiff, who rented the property, was injured when plaintiff fell off of the deck into a ditch; more than ten years after the substantial completion of the deck, plaintiff sued defendant; and defendant claimed that the action was time barred by 37-1-27 NMSA 1978, 37-1-27 NMSA 1978 did not apply to defendant because defendant was an unlicensed contractor when defendant built the deck. Little v. Jacobs, 2014-NMCA-105.

Purpose. — This section was designed to provide a reasonable measure of protection against the increased hazards of builders. Howell v. Burk, 1977-NMCA-077, 90 N.M. 688, 568 P.2d 214, cert. denied, 91 N.M. 3, 569 P.2d 413.

Scope. — The "no action" of this section does not distinguish between types of negligence, nor does it exclude strict liability claims, although it does refer to warranty claims. Howell v. Burk, 1977-NMCA-077, 90 N.M. 688, 568 P.2d 214, cert. denied, 91 N.M. 3, 569 P.2d 413.

Joint tortfeasors. — Plaintiff's suit against school district for wrongful death stemming from a faulty lighting system on school property was not barred even though the independent contractors who constructed the system were immune under this provision. There is no reason not to impose full responsibility on a joint tortfeasor subject to strict liability for breach of a nondelegable duty despite the fact that plaintiff's suit against other tortfeasors is barred. Saiz v. Belen Sch. Dist., 1992-NMSC-018, 113 N.M. 387, 827 P.2d 102.

Meaning of "improvement". — The word "improvement," as used in the context of this section, means the enhancement or augmentation of value or quality: a permanent addition to or betterment of real property that enhances its capital value and that involves the expenditure of labor or money and is designed to make the property more useful or valuable as distinguished from ordinary repairs. Mora-San Miguel Elec. Coop. v. Hicks & Ragland Consulting & Eng'g Co., 1979-NMCA-082, 93 N.M. 175, 598 P.2d 218.

Physical improvement to real property. — A gas line replacement and relocation constitutes a "physical improvement to real property" within the meaning of this section. Delgadillo v. City of Socorro, 1986-NMSC-054, 104 N.M. 476, 723 P.2d 245).

Duty of reasonable care remains. — This section does not eliminate the duty to exercise reasonable care in the design, construction, planning, or inspection of an improvement in the first place; it merely forecloses suit for redress after ten years have passed since the substantial completion of an improvement. Coleman v. United Eng'rs & Constructors, Inc., 1994-NMSC-074, 118 N.M. 47, 878 P.2d 996.

Time of negligence immaterial. — This section is not worded in terms of when negligence occurred; it does not matter if the alleged negligence occurred before there was substantial completion, during the 10 years after substantial completion or more than 10 years after substantial completion. Howell v. Burk, 1977-NMCA-077, 90 N.M. 688, 568 P.2d 214, cert. denied, 91 N.M. 3, 569 P.2d 413.

Negligent maintenance or failure to warn. — Claims of negligent maintenance and negligent failure to warn asserted against a general contractor and an architect, which arose out of defective or unsafe conditions of improvements designed and supervised by the architect and constructed by the general contractor, should not have been exempted from the summary judgments granted those persons. Howell v. Burk, 1977-NMCA-077, 90 N.M. 688, 568 P.2d 214, cert. denied, 91 N.M. 3, 569 P.2d 413.

Material manufacture and supply. — This section does not apply to a materialman who does no more than manufacture or supply materials. Howell v. Burk, 1977-NMCA-077, 90 N.M. 688, 568 P.2d 214, cert. denied, 91 N.M. 3, 569 P.2d 413.

Design and installation. — To the extent that defendant, who manufactured, designed, sold and installed glass at the site, was sued as manufacturer or seller of the glass, this section was not applicable, but it was applicable to the extent that defendant was sued as designer or installer of the glass. Howell v. Burk, 1977-NMCA-077, 90 N.M. 688, 568 P.2d 214, cert. denied, 91 N.M. 3, 569 P.2d 413.

Installation of power lines deemed "improvement". — Since a given parcel of land which has electrical service available is more valuable than a comparable parcel without such service, the installation of a power line is a physical improvement which comes within the intent and design of this section. Mora-San Miguel Elec. Coop. v. Hicks & Ragland Consulting & Eng'g Co., 1979-NMCA-082, 93 N.M. 175, 598 P.2d 218.

When independent contractor not liable to third parties. — Although, generally, an independent contractor may be liable to third parties who may have been foreseeably endangered by the contractor's negligence, even after the owner has accepted the work, this rule is subject to two limitations: (1) the independent contractor should not be liable if he merely carefully carried out the plans, specifications and directions given him, at least where the plans are not so obviously dangerous that no reasonable man would follow them; and (2) if the owner discovers the danger, or it is obvious to him, his responsibility may supersede that of the contractor. Terry v. N.M. State Hwy. Comm'n, 1982-NMSC-047, 98 N.M. 119, 645 P.2d 1375.

Inconsistent warranty terms. — Where plaintiff did not demonstrate on appeal that the warranties alleged contained express terms inconsistent with this section, as was his obligation, summary judgment for defendants was proper. Howell v. Burk, 1977-NMCA-077, 90 N.M. 688, 568 P.2d 214, cert. denied, 91 N.M. 3, 569 P.2d 413.

Extensions for disability inapplicable. — The extension of 37-1-10 NMSA 1978 does not apply to a suit brought by minor against a builder covered under the provisions of this section. Howell v. Burk, 1977-NMCA-077, 90 N.M. 688, 568 P.2d 214, cert. denied, 91 N.M. 3, 569 P.2d 413.

Law reviews. — For annual survey of civil procedure in New Mexico, see 18 N.M.L. Rev. 287 (1988).

For survey of construction law in New Mexico, see 18 N.M.L. Rev. 331 (1988).

For note, "Tort Law - New Mexico Imposes Strict Liability on a Private Employer of an Independent Contractor for Harm From Dangerous Work, but Bestows Immunity on a Government Employer: Saiz v. Belen School District," see 23 N.M.L. Rev. 399 (1993).

Am. Jur. 2d, A.L.R. and C.J.S. references. — Liability of contracter and contractor inter se with respect to injuries sustained while the stipulated work is in course of performance, 44 A.L.R. 891.

Estoppel against defense of limitation in tort actions, 77 A.L.R. 1044.

Estoppel to rely on statute of limitations, 130 A.L.R. 8, 24 A.L.R.2d 1413.

Validity and construction, as to claim alleging design defects, of statute imposing time limitations upon action against architect, 93 A.L.R.3d 1242.

Recovery for mental anguish or emotional distress, absent independent physical injury, consequent upon breach of contract or warranty in connection with construction of home or other building, 7 A.L.R.4th 1178.

54 C.J.S. Limitations of Actions § 167.