Until a certain period, contractors and builders may be liable for construction claims related to their projects or work. This is the policy in many states—implied warranties attach to construction projects or work for a certain period to impose liability on contractors and builders and to protect the buyer, purchaser, owner or successive owner from defects that may not be immediately detected. In a recent Florida case, the Florida Supreme Court considered whether certain implied warranties could be applied to improvements that provide services to make homes habitable, such as drainage systems.
Builders and developers of a subdivision were sued by residents of the newly formed homeowners associations for defectively designing and constructing the subdivision’s infrastructure, breaching the implied warranties of habitability and causing damage to the entire subdivision. The association alleged that the community’s drainage systems caused water runoffs into driveways and rendered the driveways unusable during rain. It also complained of standing water in residents’ lawns and flooding retention ponds, buckling and splitting of pavements, and soil erosion and land depression from leaking storm-water pipes. In court, the builders and developers together asserted that the claims against them could not be sustained because the construction and design of the infrastructure were not subject to implied warranties. The trial court agreed with the builders and developers and awarded judgment in their favor. The homeowners association appealed the ruling, and the case was eventually brought to Florida’s highest court.
The Florida Supreme Court found that recent cases across Florida had come to different conclusions on whether implied warranties could apply to the infrastructure of subdivisions, also referred to as improvements to the land that provide “essential services” to the homes. The court found that mass development of homes were different in that construction plans had to have been contemplated, designed and installed according to certain building and zoning requirements. The Florida Supreme Court found that builders or developers that failed to satisfy the building and zoning requirements would risk the safety and sanitation of the residential project. Therefore, the court found that implied warranties of habitability extended to the improvements that provide “essential services” to the homes, which were the drainage systems, private driveways, storm water pipes and retention ponds.
The Florida Supreme Court also sought to resolve an issue with regard to the association’s right to bring these claims against the builders and developers, because the Florida legislature had recently enacted a law to limit implied warranties of habitability in these cases. The Florida legislature intended that the newly enacted law apply to all past claims if the claims were based on damages to offsite improvements to homes. However, the court found that the new law could not apply to limit claims before the date the law was enacted.
Builders and developers with subdivision projects should meet all building code and zoning requirements to avoid future liability. Though not all states have made a determination as to whether improvements like drainage systems carry the same implied warranties as apply to the construction of houses, this decision from Florida may be instructive on how planned developments may highlight particular and new issues in the eyes of the law and policymakers.
Maronda Homes, Inc. of Fla. v. Lakeview Reserve Homeowners Assoc., Inc., Nos. SC10-2292, SC10-2336 (July 11, 2013).