FLORIDA SUPREME COURT SIDES WITH HOMEOWNER's ASSOCIATION

By Jan Bergemann
President, Cyber Citizens For Justice, Inc.

Published July 13, 2013

During the 2012 Legislative Session the Florida Legislature tried to protect developers by enacting House Bill 1013 (See CS/HB 1013/Enrolled) This bill was specifically aimed at deciding the long-running lawsuit between LAKEVIEW RESERVE HOMEOWNERS ASSOCIATION, INC. vs. MARONDA HOMES, INC. OF FLORIDA and T.D. THOMSON CONSTRUCTION COMPANY in favor of the developers. The bill even carried specific language: Section 3. This act shall take effect July 1, 2012, and applies to all cases accruing before, pending on, or filed after that date.

But in its ruling the Florida Supreme Court (No. SC10-2292) clearly rejected this retroactive attempt of the Legislature to interfere in a pending lawsuit and used the Florida Constitution to make its point: "Constitutional due process rights protect individuals from the retroactive application of a substantive law that adversely affects or destroys a vested right; imposes or creates a new obligation or duty in connection with a previous transaction or consideration; or imposes new penalties."

Obviously Maronda Homes didn't expect this ruling, considering that they filed last year a brief to the Supreme Court saying: "The Legislature has now spoken, (The new law) makes clear that offsite improvements such as roads and drainage are not subject to any implied warranty. The Legislature's resolution of this public policy question resolves this case."

According to the ruling the majority of the Supreme Court judges surely didn't agree with this statement and said more or less that the Legislature went too far when enacting this bill.

This lawsuit is all about "IMPLIED WARRANTIES." Over the years this lawsuits made lots of headlines in the media -- first when the lawsuit moved through the courts [Court to consider who has to pay for fixes to roads, drainage: HOA or developer? (12/2011)] and then when the Florida Legislature tried to intervene in a pending lawsuit [Home builders push legislation that frees them from street repairs (03-2012)].

In a 42-page ruling the Florida Supreme Court came to this

Conclusion

We agree with the decision below [Lakeview Reserve Homeowners et. al. v. Maronda Homes, Inc., et. al., 48 So.3d 902 (Fla. 5th DCA, 2010)] and hold that the implied warranties of fitness and merchantability apply to the improvements that provide essential services to the Lakeview Reserve Homeowners Association. We remand this case to the trial court for further proceedings and factual determinations as may be required, all to be pursuant to and in accordance with this opinion. Further, section 553.835 does not apply to any causes of action that accrued before the effective date of this section. Therefore, we approve the decision below and disapprove the Fourth District’s decision in Port Sewall [Port Sewall Harbor & Tennis Club Owners Ass’n v.First Fed. S. & L. Ass’n., 463 So.2d 530 (Fla. 4th DCA 1985)], to the extent that it is inconsistent with this opinion.
It is so ordered.

This is a great victory for the LAKEVIEW RESERVE HOMEOWNERS ASSOCIATION, INC. and for homeowners' associations in general. It clearly shows that the discussion about IMPLIED WARRANTIES TO REAL PROPERTIES is far from over -- as the developers and homebuilders had hoped -- and it seems pretty obvious that we will see bills filed in the Florida legislature trying to reverse the provisions that were enacted in House Bill 1013 in 2012.

Make no mistake: Anybody who purchases a home in a homeowners association pays as well for all the amenities, roads, drainage systems etc. -- making these services and common areas part of the property purchased.

The 5th DCA clearly stated in its ruling that services “essential to the habitability of the residence” include roads for ingress and egress, drainage systems to divert flooding, retention ponds to correct water flow damage, and underground pipes (whether they be storm water or sanitary sewer pipes) which are necessary for living accommodations" should be covered under implied warranties.

I think that says it all!

CHALK UP A BIG VICTORY FOR HOMEOWNERS' ASSOCIATIONS AND THE OWNERS LIVING IN THESE COMMUNITIES!