Florida Supreme Court rules that Implied Warranty of Habitability applies to “essential services” improvements in common areas in residential subdivisions.
Maronda Homes, Inc. v. Lakeview Reserve Home Owners Assn. 2013 WL 3466814 (Fla. July 11, 2013)
The Lakeview Reserve HOA sued Maronda Homes, Inc., developer of the Lakeview Reserve residential subdivision in Orange County, due to drainage systems that failed to operate properly causing flooding, erosion, road failures, and other related problems with the common area infrastructure. The trial court granted summary judgment in favor of the developer. The 5thDCA reversed, and the developer appealed to the Florida Supreme Court citing a conflict with a 4th DCA case.
Recently the Florida Supreme Court upheld the 5th DCA decision that the implied warranties of fitness, habitability and merchantability apply not only to the individual home itself, but also to common area infrastructure improvements that provide “essential services for the habitability of the homes” (regardless of whether they are physically attached to the home itself). The Court listed roads, drainage, retention ponds and underground pipes as examples, while distinguishing those services that provide merely convenience or aesthetics (like landscaping, sprinklers, recreation facilities and security systems). The simple test enunciated by the 5th DCA was to determine whether “in the absence of the service, is the home inhabitable, that is, is it an improvement providing a service essential to the habitability of the home?”
Further, the Court found that the Lakeview Reserve HOA had standing to raise these issues on behalf of the individual homeowners and that the owners did not need to do so themselves.
Finally, last year the Legislature addressed this issue in adopting Florida Statutes Section 553.835 which provided that there is no cause of action for a home purchaser or HOA for implied warranties of fitness, merchantability or habitability for damages to offsite improvements. The developer in the Maronda case argued that FS 553.835 applies retroactively to divest the HOA of its right to sue. The Florida Supreme Court disagreed, finding that such an interpretation would remove a vested right for those causes of action accruing before the effective date of that section of F.S. 553 (July 1, 2012). However, the Court went on to say (apparently in dicta, according to the dissenters), that this new section also violates the right of access to courts by abolishing the common law cause of action for breach of those implied warranties, telegraphing the likely result if the right challenge to that section makes it to the Florida Supreme Court in the future.
This certainly raises a host of serious questions for builders and developers (and design consultants advising them) going forward about the wisdom of seeking certain deviations to standard drainage and road construction design requirements, as well as about employing designs that might in the future leave them open to challenge from HOAs or individual purchasers.
A note to the reader: This article is intended to provide general information and is not intended to be a substitute for competent legal advice. Competent legal counsel should be consulted if you have questions regarding compliance with the law.
Questions regarding this article may be e-mailed to Steve Hartsell at SteveHartsell@PaveseLaw.com. Mr. Hartsell is a partner with Pavese Law Firm, 1833 Hendry Street, Fort Myers, FL 33901; Telephone: (239) 336-6244; Telecopier: (239) 332-2243.