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No more implied warranties for neighborhood improvements for homeowner association owners
by: Rob Samouce
It appears the developer lobby persuaded the Florida Legislature and the governor to do a bypass around the Florida Supreme Court this last legislative session when House Bill 1013 passed and was signed into law by the governor and becomes effective today.

In December of 2011, the Supreme Court of Florida had oral arguments in the case of Lakeview Reserve Homeowners et. al. v. Maronda Homes Inc., et. al., a case that was appealed from the 5th District Court of Appeals.

In Maronda, the appellate court stated that homeowners had implied warranties of fitness and merchantability or habitability for new homes to the construction of roads, drainage systems, retention ponds and underground pipes located off the home lots in the common areas of the community which the court described as essential services supporting the new homes. The Supreme Court has yet to rule on this appeal.

In the meantime, developers did not like the Maronda ruling from the 5th DCA because they could continue to be on the hook, like they still are in condominium projects, to make sure the off-site infrastructure on the common areas are built in a first class manner. So they lobbied the Legislature in the rush of end of session to pass House Bill 1013 to legislatively overturn the court ruling in Maronda.

House Bill 1013 adds Section 553.835 to the Florida Statutes to say that "There is no cause of action in law or equity available to a purchaser of a home or to a homeowners' association based upon the doctrine or theory of implied warranty of fitness and merchantability or habitability for damages to off-site improvements." The off-site improvements are defined as: "The street, road, driveway, sidewalk, drainage, utilities, or any other improvement or structure that is not located on or under the lot on which a new home is constructed ... "

The bill goes on to say that it does not alter or limit the existing right of purchasers of homes or homeowners' associations to pursue any other cause of action arising from defects in off-site improvements based upon contract, tort, or statute ..."

The problem is that there are no statutory warrant rights in homeowner associations of fitness and merchantability or habitability like there is for condominium associations (so sooner or later the Legislature will probably have to pass such a statute once new homeowners start screaming and yelling to them about their shoddy infrastructure for which they have no legal remedy). Any possible contract remedies will not work for subsequent purchasers of homes and are subject to short statute of limitations and torts would only apply in rare injury type cases.

Hidden defects in the off-site improvements can take years to be discovered in long build out neighborhoods and can be very expensive to fix. When the defects are finally discovered, there will be no remedy to the unfortunate homeowners.

Although, there may still be a remedy to homeowners for any building code violations, many times these common area improvements may be built to code but barely meet code and not up to the standard that the homeowners' paid for. A Yugo and a Cadillac might both be built to code but an owner who paid for a Cadillac neighborhood may get stuck with a Yugo neighborhood with no legal recourse now because of House Bill 1013.

Last, this bill says that it applies to "all cases accruing before, pending on, or filed after July 1, 2012. This means that any claims currently existing in homeowners' associations for construction defects for off-site (not on the homeowner's lot) infrastructure and improvements are now out the window. Sorry Charlie.
Rob Samouce, a principal attorney in the Naples law firm of Samouce, Murrell, & Gal, P.A., concentrates his practice in the areas of community associations including condominium, cooperative and homeowners' associations, real estate transactions, closings and related mortgage law, general business law, estate planning, construction defect litigation and general civil litigation. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time. Those persons interested in specific legal advice on topics discussed in this column should consult competent legal counsel.