Florida Community Association Construction Law Blog : Sarasota Construction Lawyer & Attorney : Tannenbaum Scro Law Firm : Florida, Tampa Bay

A warranty period in the context of condominium and homeowner association construction warranties is the finite period of time that the quality of a particular building component is guaranteed by a developer, general contractor, etc.  A statute of limitations in the context of a warranty claim is the period of time during which a claim on the warranty must be filed in court to preserve the warranty claim.  These time periods are often confused.   Hopefully, this post will help clarify the matter.

Florida Condominium Warranties

 a.  Warranty Expiration

For new condominiums, per Florida Statute 718.203, statutory warranties extend from the developer, contractor, sub-contractors, material suppliers and manufacturers to original and subsequent purchasers for the stated periods of time in the statute.  For conversions, per Florida Statute 718.618, assuming lack of adequate reserve funding, warranties extend solely from the developer to original and subsequent purchasers for the stated period of time in the statute.  Express warranties (warranties created by contract) extend for the period of time stated in the contract. Common law implied warranties  (warranties created by court decision), to the extent they are not disclaimed, extend from the developer to original purchasers for up to ten years.  Most developers effectively disclaim implied warranties in their contracts.  In order for a defect to be covered under a statutory or express warranty, it must be discovered during the warranty period.

b.  Statute of Limitations Expiration

Ordinarily, the statute of limitations for pursuing a warranty claim in court would be four years from date of discovery.  However, Florida Statute 718.124 provides that no cause of action on behalf of a condominium association accrues until transition of the Association to unit owner control (turnover).  Consequently, the statute of limitations for a condominium association pursuing a warranty claim is four years from discovery or four years from transition, whichever is latest, but in no case more than 10 years from issuance of the certificate of occupancy.  Express warranty claims can be pursued only by original purchasers and must be pursued within four years of date of discovery but in no case more than 10 years from the issuance of the certificate of occupancy.  A claim is preserved by filing suit, although placing a party on notice of a claim pursuant to Chapter 558, Florida Statutes has the effect of extending statutes of limitation for a finite period as defined in the statute.  A Chapter 558 notice, however, does not extend the limitations period for a building whose certificate of occupancy issuance is approaching its ten-year anniversary.

Florida Homeowner Association Warranties

a.  Warranty Expiration

There are no statutory warranties applicable to homeowner associations.  There is also no equivalent of Florida Statute 718.124 applicable to homeowner associations.  Thus, only common law and express warranties apply to homeowner associations.   Express warranties extend for the period of time stated in the contract. Common law implied warranties, to the extent they are not disclaimed, extend from the developer to original purchasers for up to ten years from the date of issuance of the certificate of occupancy.  Most developers effectively disclaim implied warranties in their contracts.  In order for a defect to be covered under an express warranty, it must be discovered during the warranty period.

b.  Statute of Limitations Expiration

The statute of limitations for pursuing a warranty claim in court is four years from date of discovery, but in no case more than ten years after the issuance of the certificate of occupancy.  A claim is preserved by filing suit, although placing a party on notice of a claim pursuant to Chapter 558, Florida Statutes has the effect of extending statutes of limitation for a finite period as defined in the statute,   A Chapter 558 notice, however, does not extend the limitations period for a building whose certificate of occupancy issuance is approaching its ten-year anniversary.

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The Florida Supreme Court on April 20th agreed to hear the case of Maronda Homes, Inc. v. Lakeview Reserve Homeowners Association, Inc., an appeal from an October, 2010 decision of the Fifth District Court of Appeal.  In the decision under appeal (48 So.3d 902), the Fifth District determined that Lakeview Reserve could pursue the project developer, Maronda Homes, under an implied warranty theory for defects and deficiencies in the roads, drainage systems, retention ponds and underground piping of the subdivision.  At issue was the interpretation of the Supreme Court's decision in Conklin v. Hurley, 428 So.2d 654 (1983) in which the Supreme Court determined that implied warranties extended only to the construction of a residence and "improvements immediately supporting the residence" such as water wells and septic tanks.  The Fourth District Court of Appeal, in 1985, interpreted Conklin as precluding recovery by a homeowner's association under an implied warranty theory for defects in subdivision roads and drainage improvements.  Port Seawall Harbor and Tennis Club Owners Ass'n., Inc. v. First Federal Savings and Loan Association of Martin County, 463 So.2d 530.

Acknowledging its disagreement with the Fourth District, the Fifth District determined that when the Supreme Court used the phrase "improvements immediately supporting the residence," it did not intend the definition to be literal.  Consequently, the Fifth District developed a  new test for which improvements qualify as "supportive of the residence."  The new test is whether the improvement is providing a service essential to the habitability of the home.  The Fifth District reasoned that when the Supreme Court utilized water wells and septic tanks as examples, it did not intend these "services" to be the sole ones that would qualify.  The conclusion reached by the Fifth District Court on the applicability of implied warranties to the roads, drainage systems, retention ponds and underground piping of the Lakeview Reserve subdivision:  Since the services provided by these improvements are essential to the habitability of the homes, they do "support the residences" and thus carry implied warranties under Conklin.

The Florida Supreme Court will now decide whether the Fourth District (no implied warranties for site improvements)  or the Fifth District (implied warranties for site improvements) is the law in the State of Florida for homeowner's associations.  The other issue to be decided by the Supreme Court is whether the Association itself has standing to pursue the claim or whether a class action on behalf of the homeowners is necessary.  The Fifth District ruled that the Association had standing to bring the action.

Note to owners of new condominiums: statutory warranties under Florida Statute 718.203 extend to the owners from the developer and contractors for site improvements, so the Maronda decision should not affect condominium warranties.

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