DISTINGUISHING WARRANTY EXPIRATION FROM STATUTE OF LIMITATIONS' EXPIRATION FOR FLORIDA CONDOMINIUM AND HOMEOWNER ASSOCIATION CONSTRUCTION DEFECT CLAIMS
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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Until 2008, Florida condominium associations had a distinct advantage over Florida homeowner associations as far as pursuing construction defect and financial claims on a class action basis. Basically, Florida condominium associations by court rule since 1977 had automatic standing to represent their owners as a class on matters of common interest. Florida homeowner associations, on the other hand, had no standing to represent their members as a class. Members of homeowner associations were relegated to bringing a traditional class action with individual members acting as class representatives on behalf of the members. The procedure for attaining class action status in a homeowner association context was cumbersome and time consuming.