SB 1196 Goes to Governor Scott’s Desk: Will He Veto New Law That Ends Implied Warranty of Developers and Puts Burden on Homeowners’ Associations and Individual Florida Home Buyers?

Posted By on March 15, 2012

The Florida Legislature has passed SB 1196 and it’s setting on the Governor’s desk, awaiting his decision on whether to veto the darn thing or sign it into effective Florida law.   Here is the full text of the law:

Section 553.835, Florida Statutes

Implied warranties.—

(1) The Legislature finds that the courts have reached different conclusions concerning the scope and extent of the common law doctrine of implied warranty of fitness and merchantability or habitability for improvements immediately supporting the structure of a new home, which creates 62 uncertainty in the state’s fragile real estate and construction industry.

(2) It is the intent of the Legislature to affirm the limitations to the doctrine of implied warranty of fitness and merchantability or habitability associated with the construction and sale of a new home.

(3) As used in this section, the term “offsite improvement” means a street, road, driveway, sidewalk, drainage, utilities, or any other improvement or structure that:

(a) Is not located on or under the lot on which a new home is constructed, excluding the improvements that are shared by and are part of the overall structure of two or more separately owned homes that are adjoined or attached whereby the improvements affect the fitness and merchantability or habitability of one or more of the other adjoining structures;

(b) Is located on or under the lot but does not immediately and directly support the fitness and merchantability or habitability of the new home itself.

(4) There is no cause of action in law or equity available to a purchaser of a home or to a homeowners’ association based upon the doctrine or theory of implied warranty of fitness and merchantability or habitability for damages to offsite improvements. However, this section does not alter or limit the existing rights of purchasers of homes or homeowners’ associations to pursue any other cause of action arising from defects in offsite improvements based upon contract, tort, or statute, including, but not limited to, ss. 718.203 and 719.203.

Section 2. If any provision of the act or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the act which can be given effect without the invalid provision or application, and to this end the provisions of this act are severable.

Section 3. This act shall take effect July 1, 2012, and applies to all cases accruing before, pending on, or filed after that date.

What Does SB 1196 Do to Florida Homeowners?

If this law gets okayed by Governor Scott, then any Florida Homeowners’ Association owner with a big problem with defects in improvements like sidewalks, driveways, drainage areas, or other improvements  that aren’t setting smack dab within the property lines of an owner’s lot or directly contributing to that home’s habitability will not have the legal right to pursue a claim against the developer who planned and built the stuff in the first place.

So what happens?  Someone else has to pay to fix the problem.  Not the developer.

Which means that anyone buying a home in a Homeowners’ Association in the State of Florida, assuming this law becomes effective, is going to need to be very careful… because they will be purchasing their home along with the duty to fork over their share of the costs to fix this stuff.  Even if the need for a fix isn’t obvious or known at the time.

Larry’s Tip: What SB 1196 is doing is changing Florida warranty law, so that future home buyer will have no argument of a warranty, expressed or implied, regarding improvements in the common areas of a Homeowners’ Association community.   The developers of these communities, in the past, would be responsible for repairing things like drainage problems or sewer leaks under implied warranty laws (habitability; fitness and merchantability).  Either the individual home owner or the Homeowners’ Association could pursue a claim against the developer for these damages.  No more.

The Florida Legislature has erased that right.  Now, seriously expensive things like drainage and streets, etc., are no longer the developer’s problem.  They are the financial problem of those who live in the community.

One thing.  It’s not over till someone sings, as the old saying goes, so if you don’t want this to become Florida law, then hurry up and contact Florida Governor Rick Scott and ask him to veto it.  Contact the Governor online at rick.scott@eog.myflorida.com.

Don’t forget to mention “SB1196.”

And if you are considering purchasing property in Florida, take heed: you may need to inspect a lot more than just the home itself in order to really know what financial responsibilities you’re taking on with that purchase.

If you have questions or comments, please feel free to Chat with Larry in the comments below, at info@hallandalelaw.com or (954) 458-8655.

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