Yesterday Gary Poliakoff blogged briefly on a pending bill, that is of vital importance to homeowners. His short treatment of this issue belies its significance. I agree with Gary that this is far more important than HB 319.
This Legislature is proposing to take away homeowners and HOA?s remedy against a developer who builds unsafe road and substandard retention ponds, underground pipes in a residential subdivision. If the Legislature passes this ill-conceived bill, it will leave homeowners all over Florida at the mercy of developers who construct these roads, retention ponds and underground pipes. The Legislature is going out of its way to protect developers and builders, at the expense of all Floridians. With this bill, the Legislature?s answer to the homeowners who are victims of such shoddy construction is ?tough luck?.
This legislation would legislatively overrule a sound 5th DCA (appellate) decision Lakeview Reserve Homeowners v Maronda Homes, Inc. 48 So.3d 902 (Fla 5th DCA 2010). There, the court held that Floridians buying new homes should not have to rely on caveat emptor. Caveat emptor is otherwise known as ?buyer beware? ? meaning the buyer assumes the risk and has no recourse should a problem exist, even if that problem is not something the buyer could reasonably have discovered or observed.
The Maronda court first noted that the trend over the decades was to reject caveat emptor in relation to the sale of new homes. By 1983, thirty-three jurisdictions had extended the implied warranty to real property. The trend was moving away from the harsh rule of caveat emptor, especially to residential homebuyers who lacked the expertise or ability to determine if complex structures were properly built. The rationale was that the burden of proving that new homes were safe should be on the developer/builder ? not the buyer.
Maronda quoted a 1970 Arkansas case, that pinpointed the absurdity of not extending warranties of habitability (a guarantee) to new homes:
The contrast between the rules of law applicable to the sale of personal property and those applicable to the sale of real property was so great as to be indefensible. One who bought a chattel as simple as a walking stick or a kitchen mop was entitled to get his money back if the article was not of merchantable quality. But the purchaser of a $ 50,000 home ordinarily had no remedy even if the foundation proved to be so defective that the structure collapsed into a heap of rubble.
Later, the Court in Conklin v. Hurley, 428 So.2d 654 (Fla. 1983) echoed that rationale:
The rationale of the cases which relax or abandon the doctrine of caveat emptor is that the purchaser is not in an equal bargaining position with the builder-vendor of a new dwelling, and the purchaser is forced to rely on the skill and knowledge of the builder-developer with respect to the materials and workmanship of an adequately constructed dwelling house. . . . Common threads running through all the decisions extending implied warranties to purchasers of new homes are the inability of the ordinarily prudent homebuyer to detect flaws in the construction of modern houses and the chattel.
However, the Conklin Court then addressed the specific facts of that case, holding that implied warranties of fitness and merchantability did not extend to improvements to land, other than the construction of a home and other improvements ?immediately supporting the residence thereon, such as water wells and septic tanks.? The rationale was that other improvements, like the seawall at issue, was readily observable by the buyer. In addition, the Court reasoned that the investors in that case were on a more equal footing with the developer, and not in need of consumer protection of implied warranties.
The Conklin Court further opined that the that warranty of fitness or merchantability (guaranteeing minimal suitability for the purpose for which the item was constructed) should includes structures in common areas of a subdivision that immediately support the home in the form of essential services. In expanding the warranty of habitability to include these services and rejecting the doctrine of caveat emptor, the court noted that the typical residential purchaser does not have an equal bargaining position with the builder of the new dwelling and has no choice but to rely on the developer to handle the project competently.
After Conklin, then, the standard was to determine whether or not the improvement at issue was a ?Structure in the common areas of a subdivision that immediately support the home in the form of essential services.? Private roads are essential services. So are retaining ponds and underground pipes. A homeowner cannot reasonalby ascertain if these are ?safe?.
The Maronda court eloquently described the history and trend and rationale ? so much so that it makes perfect sense. It does not promote a ?nanny state? but recognizes that some services are not readily observed or not readily able to be determined safe by the typical home buyer. The Maronda court distinguished the investors in Conklin, deciding that homebuyers clearly deserved consumer protection. Unlike Conklin, the improvement in Maronda were complex improvements put in to enable the developer to market move-in ready homes.. The construction of these (not to mention planning, permitting, site work) requires far expertise far beyond the average home buyer. When construction is completed, the defects are not readily discernable to the average homebuyer, even with diligent inspection.
This Legislature would reject Conklin, and common sense, to pander to the developers. I agree with Gary Poliakoff that if homeowner are going to get up in arms about something , this is it. It is a bad bill and is sadly reflective of this Legislature?s priorities.
These legislators should rethink their positions on this. Their consituents are the homeowners that live in HOAs. Their blatant pandering to special intrest groups should alarm evey Floridian. Now is the time to make your views known. Do you want to move into a house where you have no recourse if the developer or builder takes shortcuts jeopardizing your family?s safety?
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