Legislative Meddling Could Have Dire Consequences for Florida HOAs and Condominiums
February 18, 2015
Two troubling bills have been introduced this legislative session that could have very dire consequences for Florida community associations.
The first bill, introduced by Rep. Jay Fant, would shorten the Statute of Repose in Florida from the current ten (10) years, all the way down to seven (7) years. You may be asking, “What exactly is the Statute of Repose?” It is the statute that operates as an absolute bar to any construction defect claim, despite the fact that the statute of limitations on a claim may not have already expired.
As an example, let’s take a community that received a certificate of completion for its roads and drainage system in October of 2005. The community “turns over” to the non-developer owners in 2014, the HOA conducts an engineering study that reveals latent defects in and to the roads and drainage areas, and the HOA sues the developer and contractor for those defects in February of 2015. Under the current Statute of Repose, the Association would have filed its lawsuit within both the statute of limitations and the Statute of Repose, and could continue on with its claim.
However, under the proposed changes, and even while the statute of limitations would not have run on the Association’s claim, the Association’s ability to sue for construction defects would have expired prior to even turning over from the developer! You can guess who is behind this legislation.
Also, considering homebuilders were able to get the Statute of Repose just recently shortened from fifteen (15) years down to the current ten (10), this seems to be an especially greedy bill.
The second bill that is unfair for community associations is being introduced by Rep. Kathleen Passidomo to make changes to Chapter 558, Florida Statutes. Chapter 558 was created by the legislature a few years back to facilitate the settlement of construction defect matters without resorting to litigation. It has worked wonderfully. Many developers and community associations have used the processes established by Chapter 558 to come to a settlement agreement and avoid costly legal fees.
However, Rep. Passidomo’s bill proposes to change Chapter 558 from a facilitator of compromise into a weapon that may be used by developers to intimidate community associations.
First, the bill requires that anyone making a claim against an architect or engineer cite to specific code provisions and building plans showing a deviation. This would essentially require that every HOA or condominium with a defect, no matter how minor, to have that defect reviewed by an engineer. This would be very expensive, and cause association’s with smaller claims to forego bringing those claims. Further, many construction defects are departures from good building or trade practices, and there is no code or portion of the plans to reference. These proposed changes to Chapter 558 do not take this into account.
Secondly, the proposed changes would include “sanctions” for making mistakes in the filing of a claim, and open up every claim to a subjective determination of whether the claim is “frivolous.” Such sanctions are not found in the construction lien law or other similar laws benefitting developers and builders, and there is no reason for them here.
In sum, the changes proposed by Rep. Passidomo take a good law and make it unfair.
This article was prepared by Patrick C. Howell, Esq. of Becker & Poliakoff. The information contained herein should not be acted upon without professional legal advice. The opinions expressed herein are as of the date hereof, and this law firm undertakes no obligation to advise of subsequent changes in the law.