Governor Scott has signed into law House Bill 1013, which creates a new Section 553.835 of Florida Statutes, entitled “Implied Warranties.” The new Statutory section expressly limits the application of what is termed the doctrine or theory of implied warranty of fitness and merchantability or habitability for certain improvements in the community, as they are associated with the construction and sale of a new home. This doctrine or theory essentially requires the seller to warrant that the product being purchased is capable of being used by the buyer for the exact reason it was purchased and fit for the purpose for which it is sold. The implied warranty of merchantability is that the house conforms to all ordinary standards of care and is capable of occupancy, which was being extended to the common facilities in the community. The implied warranty of fitness for a particular purpose is intended to hold the developer responsible for defects based upon the higher level of skill, knowledge and expertise that the developer has regarding the construction.
The Statute defines the term “offsite improvement” and states 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 implied warranty of fitness and merchantability or habitability for damages to offsite improvements. It further is indicated that other claims for defective construction remain available.
Under the Statute, Offsite Improvements mean: 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 term is also to include such improvements that are located on or under the lot but does not immediately and directly support the fitness and merchantability or habitability of the home itself. However, if improvements are shared by and part of the overall structure of two or more separately owned homes that are adjoined or attached so that the improvements affect the fitness and merchantability or habitability of one or more of the other adjoining structures, it will not be considered part of this defined term and limited from making such a claim.
The concern raised by this new law is that the homeowners association will no longer have a claim against a developer to fix the roads, swale, sidewalks, drainage systems or other items considered “offsite improvements” under the implied warranty theories, which some considered to be an easier standard to meet than the common law claims of negligence or breach of contract, both of which remain available to the association against the developer. Condominium associations continue to have the warranty provisions set forth in Chapter 718 of Florida Statutes.
The new law is effective July 1, 2012, but is to be applied retroactively, which means that it shall affect all homeowner association communities, whether issues have already come up (and are in litigation), or whether they come up after the July 1, 2012 date.