WHO NEEDS WARRANTIES?

By Eric Glazer, Esq.

Published May 7, 2012

As most of you know by now, Governor Scott signed a bill last week that overturned a decision of the 5th District Court of Appeals that required developers to give warranties to Homeowner Associations regarding driveways, roads, sidewalks, utilities and drainage.  The Florida Legislature actually states in the new law:

"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." 

In sum, The Florida Legislature took the position that by providing less consumer protection to buyers of new homes, we would somehow be improving the state's fragile real estate and construction industry.  At first, I was bewildered by the logic.  Wouldn't the lack of warranties lead to shoddy construction work and make the real estate market even more fragile?  Then I realized, that The Florida Legislature may be on to something.  Maybe the people who live in these new homes, and all the attorneys that practice community association law and all the Board members of HOA's simply are not as smart as the members of our House and Senate and we should be more open to their way of thinking about this problem.

            In fact, there are so many "fragile" industries in Florida and throughout the United States , that perhaps we should expand The Florida Legislature's concept of removing consumer protections as a means of removing "uncertainty" in our already "fragile" industries.  For example, the auto industry is certainly as fragile as any other industry.  Let's help them out too and pass a law that says auto companies can build cars without providing any warranties either.  So what if your brakes don't work and your transmission malfunctions with your kids in the car.  Remember, no warranties for auto makers means "stability" in the auto market says The Florida Legislature.  Detroit would be selling cars in the millions.

            But why stop with cars?  The lack of new home sales created uncertainty for manufacturers of home appliances.  Let's pass a law that says home appliance manufacturers don't give warranties either.  Big deal if your micro wave explodes, your stove burns down the kitchen, your food processor likes to remove fingers and your washing machine floods the house.  When we let it be known that manufacturers of these products no longer have to provide warranties I'm sure any "fragility" in the home appliance market will be gone in an instant and these wonderful appliances will just be flying off the shelves.  The sales should be enormous.

            I can't think of an industry more devastated than the airline industry.  I mean if any industry is uncertain and fragile, it starts with them.  So let's take The Florida Legislature's lead and give a company like Boeing the same break that our legislature gives to home developers.  Let's let Boeing not have to warranty the airplanes they build.  Sure, we may lose a couple of hundred airplanes and tens of thousands of passengers in high speed crashes at 30,000 feet over the next few years, but you must agree that we would be removing uncertainty in a fragile airline industry and The Florida Legislature is on the money.

            In all their infinite wisdom though, The Florida Legislature really missed an absolutely wonderful and incredible opportunity to really fix our fragile condominium market once and for all.  With all of the excitement about taking away warranties from homeowner associations, our esteemed legislators forgot that The Florida Condominium statutes still require developers to provide warranties to condominiums.  The condo market is certainly more fragile and uncertain than the HOA market is.  If we really want to get buyers from out of the state interested in living in good old Florida , certainly it would make as much sense if not more, to amend the law to now remove developer warranties in condominiums.  Just think, if they get around to passing that kind of legislation, we should be out of this real estate mess in no time.