THE FLORIDA LEGISLATURE AGAIN PUTS HOA DEVELOPERS AHEAD OF HOA OWNERS
By Eric Glazer, Esq.
Published April 11, 2012

The Florida Condominium Act mandates that the developer provide warranties to the association regarding the common elements, even in those communities that are converted from rental housing to condominiums. The HOA statute however never provided similar protection to homeowner associations and the law was unclear as to whether or not a developer gave an implied warranty to the association regarding the construction and function of the common areas. The 5th District Court of Appeals though recently issued a decision stating that the HOA developer does in fact provide such an implied warranty to the association and can now be sued in a court of law for breach of that warranty. Instantly, it became panic time for the developers of HOA communities.

It should come as no surprise though that to the rescue of the developers now comes The Florida Legislature, who actually just passed legislation that is awaiting Governor Scott's signature, that would negate the decision by the 5th District Court of Appeals and would instantly specifically provide that a developer of an HOA does not provide an implied warranty of fitness for driveways, roads, sidewalks, utilities and drainage. In other words, it's apparently OK with these legislators if the developer sells you a community held together by sticks and chewing gum instead of bricks and mortar. It's OK if your roads crumble, your lights don't turn on, and the place floods up to your knees. Sorry. You have no warranty. Just leave the nice developer alone and let him escape Dodge with your money.

For veterans of Florida politics, it should come as no surprise that the Florida Legislature is again helping to bail out developers at the expense of Florida residents. That's just the way it is and has been. But what should strike you as less than credible is the bill's actual wording:

"Whereas, the Legislature finds, as a matter of public policy, that the decision of the 5th District Court of Appeals goes beyond the fundamental protections that are necessary for a purchaser of a new home and that form the basis for imposing an implied warranty of fitness and merchantability for a new home and creates uncertainty in the state's fragile real estate and construction industry. There is no cause of action in law or equity available to a purchaser of a new home or to a homeowner's association based upon the doctrine of implied warranty of fitness and merchantability or habitability for damages to "offsite improvements."

The Florida Legislature has the audacity to say that by passing this law it actually protects our fragile real estate market! Sorry…but I think this law makes our fragile real estate market even more fragile. Florida already is know for being developer friendly and the place where developers leave half built communities in bad shape and broke. Now, The Florida Legislature goes even further, and tells the developer that they can build a community and not have to worry if the drainage, the sidewalks, the streets or the roadways function as they should. We'll leave the homeowners to worry about that too ----- even though they already can't afford to upkeep the community because we won't make banks pay more to the association when they foreclose.

Suppose the reverse happened and the Florida Legislature said…..we're going to make developers provide very strict warranties and demand that they stick by the homes that they sell? If that means that the house will be a little more expensive, that's fine. Perhaps then only people that can truly afford to buy there will…………..and this would also likely cut down on the number of foreclosures. Isn't that stance more likely to protect the already fragile real estate market than taking away warranties from innocent purchasers?

All of you should be doing two things at this point. First, you should be hitting Governor Scott's Office with telephone calls, letters, e-mails and faxes demanding that he not sign House Bill 1013. Second, you should be taking notes and keeping in the back of your minds which Legislators just voted to take away warranties, so that you can make it clear to them in November that their job doesn't come with a warranty either.